Centrus Energy Corp., of Bethesda, Md., is stretching out decommissioning and decontamination of the American Centrifuge Project site in Pike County, Ohio, by more than a year, cutting staff and slowing the pace of work there, the company’s chief executive said in a Thursday conference call.
“The schedule of that work has changed after some delays we have experienced in getting regulatory and administrative approval,” said CEO Daniel Poneman. “As a result, we have changed our workplace so that we will complete the work with a smaller workforce over a longer period of time. The delay has increased cost, but we believe the new schedule will reduce the risk of further delays and cost increases.”
The total cost of D&D at the American Centrifuge facility, an industrial-scale uranium enrichment technology demonstration, will be roughly $40 million to $50 million through 2018, Poneman said Thursday. That is separate from $15 million of D&D expenses already racked up in the first nine months of 2016.
There were fewer than 150 employees in Piketon as recently as August, down from about 300 last year. A protracted campaign to keep the facility open, championed in Congress by Sen. Rob Portman (R-Ohio), ultimately failed to prevent DOE defunding the plant, and the American Centrifuge Project shut down in Ohio in October 2015. As recently as August, Centrus thought it would complete D&D in early 2017.
Centrus had planned to dispose of Piketon waste at DOE’s Nevada National Security Site, according to a company filing this summer with the Nuclear Regulatory Commission (NRC). In a 10-Q filing with the U.S. Securities and Exchange Commission this week, the company said it is “working to finalize contractual and regulatory arrangements for the disposition of materials.”
Centrus spokesman Jeremy Derryberry did not reply to requests for comment about staffing levels at the American Centrifuge Project for the remainder of D&D work, or the particulars of the regulatory and administrative approvals the company needs.
Centrus is the former quasi-governmental United States Enrichment Corp. Now led by Obama-era Deputy Energy Secretary Poneman, the company reinvented itself as a uranium fuel broker for commercial nuclear power plants after a 2014 bankruptcy reorganization. The American Centrifuge Project is part of the company’s contract services segment, which focuses on U.S. government work.
This summer, Centrus was working with the Nuclear Regulatory Commission (NRC), which licenses the American Centrifuge Project, on changes to the D&D plan. The final plan, which was due to the NRC on Sept. 30, will contain a detailed cost and schedule estimate for decommissioning and decontamination. Only a summary of that plan, presented to the regulator on Sept. 20, had been made public at press time for Weapons Complex Monitor.
Earlier this year, Centrus aimed to file its full Piketon D&D plan with the NRC by July, but that did not happen.
Meanwhile, Centrus still holds a one-year, $25-million contract with UT-Battelle, operator of the Energy Department’s Oak Ridge National Laboratory, to continue limited American Centrifuge technology development. The pact expires Sept. 30, 2017.
Company-wide, Centrus remains on track to meet its 2016 revenue goal of $275 million to $300 million, Poneman said.
The company’s core uranium business is subject to some lumpiness because of the timing of orders, which, consistent with management’s expectations, made the third quarter of the year a weak one for Centrus.
Centrus trimmed its third-quarter loss to $41.3 million, or $4.54 per share, from a net loss of $55.1 million, or $6.05 a share, in the year-ago quarter. Revenue for the three months ended Sept. 30 dropped to just over $20 million from almost $30 million in the corresponding 2015 quarter.
“With a large percentage of customer deliveries occurring in the fourth quarter, we expected a slow quarter in the fuel segment, but we are on track to meet our sales volume and revenue guidance for 2016,” Poneman said.
Revenue for the nine-months ended Sept. 30 was about $260 million, according to the company’s third-quarter earnings press release.