Todd Jacobson
NS&D Monitor
8/1/2014

USEC’s contract with Oak Ridge National Laboratory to continue work on the American Centrifuge Project has been formally extended through March of next year as the lab this week exercised a $41.6 million six-month option to fund the program. The extension, revealed in a July 31 filing with the Securities and Exchange Commission, increases the total price of ORNL’s contract with USEC to $75.3 million, and the contract provides for monthly payments of $6.7 million through Sept. 30 and approximately $6.9 million in ensuing months. The contract, which took effect May 1, provides for continued cascade operations, the extension of core ACP research and technology activities, and requires USEC to provide related reports to ORNL.

In May, the NNSA undertook two internal reprogrammings to help fund the program: $5 million in FY 2014 weapons activities funds and $2 million from Defense Nuclear Nonproliferation funds. A separate $33 million reprogramming request that was recently approved by Congress will keep the program afloat until mid-February 2015.  The ORNL-led effort includes two six-month option periods that would extend the contract through the end of Fiscal Year 2015 for a total value of $118 million. The second of the two options has not yet been exercised. To help fund the program through the reprogramming, the NNSA shifted about $30 million in funds from the NNSA’s Weapons Activities account—mostly from unearned contract award fees—and $2.9 million from the Defense Nuclear Nonproliferation account.

USEC RD&D Effort Wrapped Up in May

USEC concluded a two-year research, development and deployment cost-share program with the Department of Energy in May. Though that program was successful in meeting milestones to prove the viability of the American Centrifuge technology, given current market conditions USEC is not able to commercialize the plant and has filed for Chapter 11 bankruptcy. Under the terms of the program, DOE was able to take over management of the technology and launch the new program under ORNL management.

The Department has previously said in that given the recent shutdown of the Paducah Gaseous Diffusion Plant, the American Centrifuge technology is the only choice for building a domestic enrichment capacity that could be used for national security purposes such as tritium production. “The Department has approved a short-term path forward for Domestic Enrichment Activities to preserve the [American Centrifuge Enrichment] technology and the ability to meet national security tritium and enriched uranium demand over the coming decade,” DOE said in a June reprogramming letter to Congress. “In addition, necessary capabilities will be established to ensure these nuclear materials can be produced, when needed, to support DOE/NNSA missions while an Interagency Policy Committee explores long-term needs for unencumbered low enriched uranium and the options available to meet those requirements going forward.”