American Centrifuge Program Passes “Station Blackout” Test
The USEC Inc. (NYSE:USU) American Centrifuge program in Piketon, Ohio, has successfully passed an unannounced “station blackout” test that is part of a program to prove the uranium enrichment technology’s technical readiness. Technicians, without warning, interrupted the external power supply to the commercial demonstration cascade facilities in order to test the responsiveness of equipment, backup systems and personnel at the uranium enrichment plant to a total loss of outside power. This test is part of the cost-shared research, development and demonstration (RD&D) program with the Department of Energy (DOE), designed to demonstrate the technical readiness of the American Centrifuge to meet national security needs.
“I am pleased to report that all of our personnel on duty and all of the plant equipment, including the 120 centrifuges that were running with full inventory of uranium hexafluoride gas, responded safely and within expected parameters, with no unusual events or issues related to the total loss of power,” said Paul Sullivan, vice president, American Centrifuge and chief engineer. “This was a litmus test for us, and our people and technology came through it with flying colors.”
Representatives from DOE and the Nuclear Regulatory Commission observed the test, which took place December 18.
The successful loss of power test and the recently announced achievement of key milestones for centrifuge reliability, cascade performance and centrifuge manufacturing quality as part of the RD&D program are crucial to demonstrating that the American Centrifuge, as America’s only indigenous uranium enrichment technology, can effectively serve the national and energy security needs of the United States. The recent achievements included reaching 20 machine-years of operations at the production-scale cascade of centrifuge machines. The formal test results for the three recent milestones and the loss of power test will be reviewed and certified by DOE. Previously, six other technical milestones were successfully achieved as part of a June 2012 cooperative agreement between USEC and DOE.
As previously disclosed, USEC and DOE are in discussions regarding extension of the American Centrifuge RD&D program beyond January 15, 2014, subject to Congressional appropriations. USEC is currently working with stakeholders, including DOE and Congress, to achieve an extension of the RD&D program and to identify the best path forward for deployment of the centrifuge technology.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 - that is, statements related to future events. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For USEC, particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include, but are not limited to: uncertainty regarding the economics of and continued funding for the American Centrifuge project and the potential for a demobilization or termination of the project; our ability to reach an agreement with DOE and funding for a potential extension of the current research, development and demonstration (“RD&D”) program and the potential for demobilization or termination of the American Centrifuge project; our ability to satisfy the conditions to the announced restructuring plan support agreement with certain of our noteholders and complete the proposed restructuring, including our ability to reach a mutually acceptable agreement with the Babcock & Wilcox Investment Company and Toshiba Corporation regarding the treatment of their investment and their willingness to make additional investments in the American Centrifuge project, and the potential for termination of the restructuring plan support agreement including as a result of a failure to reach an agreement with DOE regarding a sufficient extension of the RD&D program; the impact of a potential de-listing of our common stock on the NYSE; the impact of enrichment market conditions, increased project costs and other factors on the economic viability of the American Centrifuge project without additional government support and on our ability to finance the project and the potential for a demobilization or termination of the project; limitations on our ability to provide any required cost sharing under the RD&D program; uncertainty concerning the ultimate success of our efforts to obtain a loan guarantee from DOE and other financing for the American Centrifuge project or additional government support for the project and the timing and terms thereof; potential changes in our anticipated ownership of or role in the American Centrifuge project, including as a result of the need to raise additional capital to finance the project; the impact of actions we have taken or may take to reduce spending on the American Centrifuge project, including the potential loss of key suppliers and employees, and impacts to cost and schedule; the potential for DOE to seek to terminate or exercise its remedies under the RD&D cooperative agreement or June 2002 DOE-USEC agreement; changes in U.S. government priorities and the availability of government funding, and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements except as required by law.
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