What does the USEC announcement mean?
By early spring, USEC will apply for a Nuclear Regulatory Commission license to build a 50-job plant at Piketon, Ohio, to test up to 240 machines using gas centrifuge to enrich uranium.
Assuming NRC approval, construction is scheduled to begin in 2004 and operation in late 2005.
What is the significance for Paducah?
The plant will test the financial and operating onal viability of a 500-job commercial plant expected to eventually replace the Paducah Gaseous Diffusion Plant. In 2004, USEC will name Piketon or Paducah as site of the commercial plant. Construction is forecast to begin in 2007.
When will the Paducah plant close?
The gas centrifuge plant would be operational & ready by 2010 if in Piketon or 2011 if in Paducah. USEC says it will run the Paducah plant until 2010 to 2012 but is seeking ways to diversify the use of the sprawling west McCracken County facility. Some industry observers expect the plant to run until about 2015. After that, the government must decide whether to keep the plant on standby or close it entirely. Closure Shutdown could mean hundreds or even more than 1,000 environmental and maintenance jobs for years to come.
What hurdles does USEC face?
Financial — USEC annual profits have dropped from $78.4 million in 2001 to an expected $9 million to $12 million this year. During the next five years, besides spending $150 million out of its profits for research and building the test plant, USEC will have to keep paying on $500 million in debts from its 1998 privatization. It will also have to borrow and find financial backing for $1.5 billion for the commercial plant. Some industry experts say USEC won't find the private support and will ultimately have to ask the federal government for help.
Operational — USEC has never commercially operated centrifuge machines.
Although the machines are much more cost-efficient than 17 years ago when the Department of Energy abandoned their use at Piketon as far too costly, USEC must still prove the machines can enrich uranium at a cost customers will pay. USEC's newer contracts afford a much narrower profit margin.
Competitive — USEC is racing with Louisiana Energy Services to build a
centrifuge plant. L.E.S. is a consortium led by USEC's chief competitor, Urenco, and includes the nation's top three nuclear power firms, which all buy enriched uranium from USEC. Urenco, a foreign enrichment firm, has used
centrifuge for decades in Europe. The power companies think USEC controls too much of the domestic market. L.E.S. plans to have its plant on line a few years earlier than USEC but is facing stiff community opposition at its chosen site near Nashville, Tenn. Regulatory — The Nuclear Regulatory Commission, which focuses on public health and safety, will have to approve licenses before USEC and L.E.S. can operate centrifuge plants. That process is complex and can lead to delays.
Also, there are serious federal policy questions regarding whether the nation needs and can support two private enrichment operations.