-
Centrifuge research, engineering and testing work will continue in Oak
Ridge, Tenn.
-
Ohio centrifuge cascade to be demobilized after successful three-year
demonstration
-
First stage of Ohio workforce reductions begin week of February 29
-
Centrus preserving NRC license and options for future use of Ohio
facility
BETHESDA, Md.--(BUSINESS WIRE)--Feb. 19, 2016--
Centrus Energy Corp. (NYSE MKT: LEU) announced today that it has
completed operations of its demonstration cascade of American Centrifuge
machines at its facility in Piketon, Ohio, but plans to maintain its
construction and operating license from the U.S. Nuclear Regulatory
Commission (NRC) for a commercial plant to preserve options for the
future use of the facility. In addition, with ongoing funding from the
U.S. Department of Energy’s (DOE) Oak Ridge National Laboratory (ORNL),
Centrus plans to continue advancing the technology for national security
and energy security purposes at the Company’s state-of-the-art research
and testing facilities in Oak Ridge, Tennessee.
DOE announced in September 2015 that it would not fund additional
demonstration at Piketon after September 30, 2015, because the cascade
had successfully delivered the necessary operational data. Since that
time, Centrus has funded ongoing operations while exploring other
potential uses for the facility and its unique workforce. Centrus will
demobilize the demonstration cascade and reduce its workforce at Piketon
starting with the layoff of approximately 60 employees during the week
of February 29. In the coming weeks, the Company will begin
decontamination and decommissioning (D&D) activities of the
demonstration cascade in accordance with its NRC license for the
demonstration facility. The Company plans to maintain its core technical
capabilities and preserve its ability to support future nuclear projects
at the Piketon site.
“We believe that the United States must remain a global leader in
uranium enrichment technology, and the work of our team at Piketon has
made enormous contributions to that effort,” said Daniel B. Poneman,
Centrus president and chief executive officer. “This is a painful day
for our employees, families, friends, and colleagues, but all should be
proud of the great work of our Piketon team. They have met every
milestone in this project, which they completed on time and under
budget. We will do all that we can to facilitate their transition to new
opportunities.”
“We deeply appreciate the unwavering, long-standing support from the
community and Ohio’s elected officials for the great work that has been
done at Piketon,” Poneman added. “That remains an invaluable asset as we
develop other opportunities for the site and our workforce.”
DOE: American Centrifuge is “most technically advanced and
lowest risk option”
In an October 2015 report, DOE determined that the United States must
restore its uranium enrichment capability to meet long-term national
security needs and further determined that the American Centrifuge
technology is the “most technically advanced and lowest risk option” for
doing so.
ORNL informed Centrus in September 2015 that it intends to extend the
Company’s contract for ongoing research and testing activities in Oak
Ridge through September 2016. Centrus currently has more than 120
employees working at two dedicated facilities in the Oak Ridge area to
engineer, design, and test improvements in full-size machines operating
in individual test stands. The Company’s scientists and engineers will
continue to improve the reliability and manufacturability of centrifuge
machines for potential future applications. Centrus plans to maintain
its critical technological expertise in advanced gas centrifuge uranium
enrichment and to continue to develop that technology for national
security purposes and to evaluate how best to develop the technology for
long-term commercial use.
As a result of the decision to demobilize the demonstration facility,
Centrus will incur costs associated with the D&D in accordance with the
requirements of the NRC and DOE, as well as severance and other
demobilization costs. Centrus is required to provide financial assurance
to the NRC and DOE for D&D and lease turnover costs under a
regulatory-prescribed methodology that includes potential contingent
costs and reserves. Centrus has previously provided financial assurance
to the NRC and DOE in the form of surety bonds of $16.0 million and
$13.0 million, respectively, which are fully cash-collateralized by
Centrus. The Company expects to receive cash as the surety bonds are
cancelled following its performance of D&D or reduced based on our
satisfaction of lease conditions.
LEU Business Unaffected
The decision to cease demonstration activities will not affect Centrus’
commercial fuel business or its deliveries to utility customers. While
Centrus continues to be committed to supporting America’s national
security needs, the vast majority of the Company’s revenues are
generated through the sale of uranium and enriched uranium fuel to power
civilian nuclear power plants around the world – meeting customers’
needs through a large, diverse base of supply sources.
About Centrus Energy Corp.
Centrus Energy Corp. is a trusted supplier of enriched uranium fuel for
commercial nuclear power plants in the United States and around the
world. Our mission is to provide reliable and competitive fuel goods and
services to meet the needs of our customers, consistent with the highest
levels of integrity, safety, and security.
Forward-Looking Statements
This news release contains “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934 - that is,
statements related to future events. In this context, forward-looking
statements may address our expected future business and financial
performance, and often contain words such as “expects”, “anticipates”,
“intends”, “plans”, “believes”, “will ”, “should”, “could” or “may” and
other words of similar meaning. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain. For
Centrus, particular risks and uncertainties that could cause our actual
future results to differ materially from those expressed in our
forward-looking statements include, but are not limited to: risks
related to the ongoing transition of our business, including uncertainty
regarding the economics of and continued funding for the American
Centrifuge project and the potential for a demobilization or termination
of the project; the impact of enrichment market conditions, increased
project costs and other factors on the economics of the American
Centrifuge project and our ability to finance the project and the
potential for a demobilization or termination of the project; potential
changes in our anticipated ownership of or role in the American
Centrifuge project, including as a result of the need to raise
additional capital to finance the project; the impact of actions we have
taken or may take to reduce spending on the American Centrifuge project,
including the potential loss of key suppliers and employees, and impacts
to cost and schedule; risks relating to the decontamination and
decommissioning of activities at the Piketon facility, including costs
or expenses associated with decontamination and decommissioning and
financial assurances provided by us to the NRC and DOE in connection
with lease turnover costs; uncertainty regarding the potential for the
DOE to seek to terminate or exercise its remedies under the June 2002
DOE-USEC Agreement; potential for any changes to or termination of any
agreements with the U.S. government; changes in U.S. government
priorities and the availability of government funding, including loan
guarantees and ongoing funding for the ORNL; uncertainty regarding the
NRC’s willingness to renew our license to operate a commercial plant in
Piketon; the impact of government regulation by DOE and NRC; and other
risks and uncertainties discussed in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K and
quarterly reports on Form 10-Q, which are available on our website at www.centrusenergy.com.
We do not undertake to update our forward-looking statements except as
required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160219006001/en/
Source: Centrus Energy Corp.
Centrus Energy Corp.
Media:
Jeremy Derryberry, 301-564-3392
or
Investors:
Don
Hatcher, 301-564-3460
