The American Centrifuge Technology Manufacturing Center in south Oak Ridge is pictured above. (Photos courtesy USEC)
Oak Ridge National Laboratory has exercised an option to extend the American Centrifuge demonstration program into 2015, USEC announced Wednesday.
The announcement was included in a report on second quarter results, when the uranium enrichment company had a net loss of $28 million. USEC, which has operations in Oak Ridge, is undergoing a Chapter 11 bankruptcy and is turning over its gaseous diffusion plant in Paducah, Kentucky, to the U.S. Department of Energy.
Funding for the next-generation American Centrifuge activities was previously provided under a cooperative agreement with the U.S. Department of Energy. Under that cost-sharing agreement, DOE provided 80 percent of the funding, and USEC provided 20 percent for research, development, and demonstration work performed from June 1, 2012, through April 30, 2014, when the agreement expired.
On May 1, USEC signed a new agreement with UT-Battelle, which manages and operates ORNL for DOE. The agreement was called the American Centrifuge Technology Demonstration and Operations, or ACTDO, agreement, and it allows for continued cascade operations and the continuation of core American Centrifuge research and technology activities and the furnishing of related reports to ORNL, USEC said in its quarterly report.
On July 31, ORNL exercised its option to extend the period of performance for the ACTDO Agreement by an additional six months to March 31, 2015. The agreement also provides ORNL with one additional option to extend the agreement by six months to September 30, 2015.
But the scope of the overall work under the ACTDO agreement is reduced from the scope of work that was being conducted by USEC under the cooperative agreement with DOE, and there have been layoffs. A USEC spokesman previously said the scope of work under the new contract is about 60 percent, on a dollar basis per month, of the scope of work previously funded by the cooperative agreement between the company and DOE.
The work on the advanced uranium enrichment project has been deemed important for national security and possible commercial use. USEC supplies enriched uranium fuel for commercial nuclear power plants.
USEC Inc., the parent company, announced a Chapter 11 bankruptcy filing and financial restructuring plan in March. The American Centrifuge program had successfully completed all 10 of its technical milestones, but the commercial market has been troubled by a drop in demand for enriched uranium after the 2011 meltdown of three reactors in Fukushima, Japan, caused by a tsunami. USEC has previously said there are now 50 reactors not operating in Germany and Japan, as well as a glut of natural gas on the market.
The new agreement with UT-Battelle, which manages Oak Ridge National Laboratory, was signed May 1. The first five-month term ends Sept. 30. The new agreement includes options for two six-month extensions valued at about $41.7 million each. The total price of the contract with the options is roughly $117 million.
In May, USEC Communications Manager Jeremy Derryberry said the company has more than 150 workers involved in the American Centrifuge project in Oak Ridge and more than 390 companywide.
He said the new fixed-price contract with UT-Battelle—the ACTDO Agreement—builds on the success of the previous centrifuge demonstration program, preserves a reliable and economic domestic uranium enrichment capability for national security, and promotes future private sector deployment.
The continued work includes operations at USEC’s demonstration plant in Piketon, Ohio; continue operations at a test facility in Oak Ridge at Building K-1600; and continued core technical work on American Centrifuge technology at the former Boeing building in south Oak Ridge.
