July 2, 2013
BETHESDA, Md. – USEC Inc. (NYSE: USU) announced today that the Megatons to Megawatts program has completed downblending of 475 metric tons of weapons-grade uranium into fuel for commercial nuclear power plants and is on schedule to complete the program in 2013.
Megatons to Megawatts is a 20-year, commercially financed government-industry partnership in which 500 metric tons of Russian highly enriched uranium (HEU) is being downblended to low enriched uranium (LEU) for use as commercial reactor fuel. USEC, as executive agent for the U.S. government, and JSC “Techsnabexport” (TENEX), acting for the Russian State Atomic Energy Corporation (ROSATOM), implement the program.
“Since 1995, USEC has provided our utility customers with fuel from this truly innovative program that is making the world safer while fueling clean, reliable electricity from their nuclear power plants,” said Philip G. Sewell, senior vice president and chief development officer. “As we prepare for the end of the program this year, we look forward to continuing our long-term supply relationship with Russia through our transitional supply agreement that starts later this year. This transitional supply will help us meet customer needs as the company pursues deployment of our American Centrifuge uranium enrichment technology.”
USEC is scheduled to take delivery of the final material for the program in November 2013 when the equivalent of 20,000 nuclear warheads will have been downblended into commercial reactor fuel. To date, the low enriched uranium created by the downblending could generate electricity that would meet the demand for a city the size of Boston for approximately 730 years. In past years, up to 10 percent of the electricity generated in the United States came from nuclear power plants using this fuel.
Transitional Supply Contract
In 2011, USEC and TENEX entered into a multi-year contract for the supply of low enriched uranium that will build on USEC’s long-term relationship with TENEX. Under the terms of the agreement, the supply of low enriched uranium to USEC will begin in 2013 and ramp up until it reaches a level in 2015 that is approximately one-half the level currently supplied by TENEX to USEC under the Megatons to Megawatts program. The new contract includes a mutual option to increase the quantities up to 5.5 million SWU (separative work units), the same level as the Megatons to Megawatts program.
Unlike the Megatons to Megawatts program, the quantities supplied under the new contract will come from Russia’s commercial enrichment activities rather than from downblending of Russian weapons material. Deliveries under the agreement are expected to continue through 2022. USEC will purchase the SWU contained in the low enriched uranium and deliver natural uranium to TENEX for the uranium component of the low enriched uranium.