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Obama Administration Announces Major Step Forward for the American Centrifuge Plant

June 13, 2012 - 9:36am

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WASHINGTON – U.S. Energy Secretary Steven Chu announced today that the Obama Administration reached a major milestone in its efforts to secure an advanced domestic uranium enrichment capability for national security purposes.  The Energy Department, USEC Inc. and American Centrifuge Demonstration, LLC, have signed a set of agreements that will enable the research, development and demonstration (RD&D) project at the American Centrifuge Plant (ACP) in Piketon, Ohio, to move forward while providing significant taxpayer protections. The RD&D at ACP will be managed under a new enhanced governance structure that strengthens the roles of other project partners such as Babcock and Wilcox (B&W) and Toshiba Corporation, which will provide additional project management support and personnel for the program.

“Today, after months of hard work, I am pleased to announce that the Obama Administration has reached a major milestone in our efforts to advance the technology at the American Centrifuge Plant and strengthen U.S. national security,” said Secretary Chu.  “Under the new agreement, we will be able to move forward with this critical research, development and demonstration effort while ensuring strong protections for the American taxpayers.”

Under the cost-shared cooperative agreement with strengthened management structures, the participants will work to build out and test the first cascade and plant support systems at ACP.  ACP is currently the only national initiative to establish an advanced domestic enrichment capability based on U.S.-origin technology, which is necessary to support defense program needs, including supporting tritium production requirements for the U.S. nuclear stockpile.  This latest step builds on the tireless work by the Energy Department and the Obama Administration over several years to advance this important technology.  

As part of the program, the Energy Department, USEC and American Centrifuge Demonstration, LLC (ACD) will work to reduce the technical and financial risks of the ACP project.  The RD&D project will integrate all aspects of the technology, including centrifuge manufacturing, operations and reliability, to demonstrate how the centrifuges and support systems operate as a whole at commercial scale.

USEC recently formed ACD to carry out the program and has agreed to put in place a governance structure for ACD to provide enhanced program management and execution for the performance of the RD&D program, subject to USEC’s requirements under its license from the Nuclear Regulatory Commission. This structure is expected to include an ACD board of managers that will not be controlled by USEC, including the participation of Toshiba Corporation and B&W. Additional third parties may participate in ACD as well, providing project management support and personnel to enhance the execution of the RD&D program.

The cooperative agreement provides a framework for a cost-shared multiyear RD&D effort to build out and test the first cascade and plant systems at ACP.  DOE will provide approximately $88 million under the initial phase by taking title to and disposal responsibility for a quantity of depleted uranium tails from USEC.  The project participants will provide an additional $22 million in the first phase of the project, representing a 20 percent cost share.  This arrangement will fund work through the beginning of December. Later phases of the RD&D program will be supported by appropriated funds, if available, for a maximum Energy Department investment in the RD&D program for up to $280 million. The Administration will continue to work with Congress to secure additional funding to complete the RD&D program.

The agreements the Department of Energy has signed with ACD and USEC include significant taxpayer protections, including ownership of the centrifuges and other equipment, rights to intellectual property (IP) and technical data, and step-in rights for the Department to take over the program if necessary, should the private sector be unable or unwilling to commercialize the ACP technology.  

The Department will immediately take ownership of the systems, equipment, and IP and will lease the equipment to USEC for the purposes of the RD&D program.  Under the agreement, if ACP is commercialized, DOE will transfer title of the equipment back to the ACP participants.  The Department has also put in place a series of technical milestones and performance metrics that will enable the Department to monitor progress and effectively oversee the project.

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