ORNL to extend contract for uranium centrifuge work, but at reduced level; could require layoffs

 

Oak Ridge National Laboratory intends to extend its contract with Centrus Energy Corporation for research on uranium enrichment centrifuges, but at a reduced level, with funding cut by about 60 percent, the company said Friday. Layoffs could be required, Centrus said in a press release.

The contract extension continues technology development activities at Oak Ridge facilities for advanced uranium enrichment centrifuges, but revenues won’t be used for operations in Piketon, Ohio, the press release said.

The new contract will cover a one-year period from October 1, 2015, to September 30, 2016, with the possibility for additional extensions, the release said.

It said the U.S. Department of Energy’s decision to provide reduced funding will support continued developments of the company’s American Centrifuge technology—which has long-term importance for national and energy security.

The new contract excludes continued operations of America’s only operating cascade of advanced uranium enrichment centrifuges in Piketon, Ohio. Funding will be reduced by approximately 60 percent to $35 million per year, and the scope of activities will be limited to development activities in Oak Ridge, Tennessee.

In January, UT-Battelle, the contractor that operates Oak Ridge National Laboratory, added another six months to the agreement being used to develop the new uranium-enrichment technology through the operations in Oak Ridge and Piketon. That extension of the American Centrifuge Technology Demonstration and Operations Agreement, or ACTDO Agreement, was for the six-month period from March 31 to September 30, 2015.

ORNL had previously exercised an option to extend the agreement through March 31, 2015. The agreement allowed the continued demonstration and operation of the only uranium enrichment technology in the United States, Centrus said at the time.

Centrus, formerly known as USEC, said then that it has invested more than $2.5 billion to develop the only U.S.-origin uranium enrichment technology available for national and energy security purposes. It now acts as a subcontractor to ORNL through its wholly owned subsidiary American Centrifuge Operating LLC.

“While obviously we are disappointed by the decision to significantly downsize America’s advanced centrifuge program, we appreciate the laboratory’s recognition that the technology has been effectively demonstrated over the last two years of hard work at Piketon,” Centrus Vice President Steve Penrod said in the press release Friday. Penrod oversees the American Centrifuge program for the company.

“We will work with the laboratory and with Congress to protect as much of the core capabilities of the program as possible so that the technology will remain ready for deployment when the U.S. government calls upon it for national security purposes,” he said.

“In the coming weeks, we will explore options to protect the technology and our workers in Ohio, whose expertise, creativity, and dedication represent an invaluable asset for the nation,” said Daniel B. Poneman, president and chief executive officer of Centrus and a former DOE deputy secretary. “Cuts to our workforce would impose hardship on families and communities, while jeopardizing future progress. We will do all that we can to ease transitions while preserving as much of our scientific, technical, and industrial expertise as we can with the available funding.”

Centrus anticipates that it will incur costs, which are being evaluated, associated with the reduction in workforce and the further demobilization of the program, the release said.

“Should closure of the Piketon, Ohio, facility be required, Centrus would incur still further costs associated with that closure and return of the facility in compliance with U.S. Nuclear Regulatory Commission requirements and pursuant to its lease with DOE,” the release said.

Centrus supplies enriched uranium fuel for commercial nuclear power plants in the United States and around the world.

Here is more information provided by Centrus:

A fact sheet describing the national security importance of preserving U.S. leadership in uranium enrichment technology is available here.

A fact sheet detailing the existing advanced centrifuge program and the impact of the funding reductions is available here.

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