USEC Inc. (NYSE: USU) said it has entered into a multi-party arrangement with Energy Northwest, the Bonneville Power Administration (BPA), the Tennessee Valley Authority (TVA) and the U. S. Department of Energy (DOE) to extend uranium enrichment operations at the Paducah Gaseous Diffusion Plant in Paducah, Ky. The Paducah plant, owned by DOE and leased and operated by USEC, is the largest uranium enrichment plant in the United States, accounting for nearly all current U.S. enriched uranium production, and has operated for almost 60 years.
Under the agreements, DOE will provide high-assay depleted uranium hexafluoride, or tails, to Energy Northwest. Energy Northwest has contracted with USEC to re-enrich the tails into low enriched uranium. Energy Northwest will utilize a portion of the low enriched uranium for its 1,150 MW Columbia Nuclear Generating Station in Washington, and will sell the remainder of the U.S.-origin low enriched uranium to TVA for use in TVA’s reactors.TVA will supply the power for the re-enrichment under an agreement to extend the existing USEC-TVA power contract.
The DOE approved the transaction on May 15 following approvals by the USEC, TVA and Energy Northwest boards of directors. Both Energy Northwest and TVA plan to use the enriched uranium in their reactors over many years, so as to not have a material adverse impact on the markets.
The agreement calls for DOE to provide Energy Northwest with approximately 9,000 metric tons of high-assay depleted uranium. USEC will enrich the tails to make about 480 metric tons of low enriched uranium. The work, combined with other ongoing USEC commercial obligations, will require approximately five million separative work units (SWU), a standard measure of uranium enrichment that represents the effort that is required to increase the concentration of the U-235 isotope in the uranium.
The work will take about 12 months and supports a one-year extension of Paducah enrichment operations.
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