USEC is working to extend the operation of the Paducah Gaseous Diffusion Plant beyond May 2012 and expects to reach a decision during the first half of 2011.
USEC will base its decision to extend operations upon economic considerations and the ability of the plant to operate profitably. Because the plant is a large consumer of electricity, power prices are a significant factor in the cost of operations and future planning for Paducah. The Company is actively negotiating with the Tennessee Valley Authority (TVA) and others for power to operate Paducah beyond mid-2012 when USEC’s current power agreement with TVA expires.
To support extended operations, USEC is also examining the potential of enriching a portion of the Department of Energy’s (DOE) depleted uranium stockpile. Depleted uranium is a by-product generated during enrichment. Given the current price of uranium, the federal government could generate substantial revenue by re-enriching portions of the depleted uranium at Paducah to the level of natural uranium.
Enriching the depleted uranium at Paducah would reduce DOE’s costs of ultimately disposing of the depleted uranium and would create a valuable asset, natural uranium, that could help fund DOE’s Environmental Management cleanup program, which includes the gaseous diffusion plants in Paducah, Ky., and Piketon, Ohio. The amount of natural uranium that would be sold annually under such a program represents less than 2.5 percent of global uranium demand and, as has been demonstrated over the past year, sales of surplus DOE uranium can be implemented without an adverse material impact on the domestic uranium industry.
“DOE has a unique opportunity while the plant is still operating that would be a win-win for everyone,” said Steve Penrod, Paducah plant general manager and USEC vice president. “Re-enrichment would reduce DOE’s decontamination and decommissioning costs while generating revenue for the federal government and maintaining 1,200 good, local jobs.
USEC recently announced that it has reached a new labour agreement with the United Steel Workers Local 550. The contract, which runs through July of 2016, will ensure a well- qualified workforce is in place to support the efficient operation of the Paducah plant.
The plant produces low enriched uranium used as fuel in commercial nuclear power plants in the United States and around the world and currently provides approximately half of USEC’s annual supply of low enriched uranium.
