USEC Inc. (USU) and the U.S. Energy Department agreed to keep alive a troubled uranium enrichment project in Ohio while the company’s application for a $2 billion federal loan guarantee is put on hold.
The Energy Department and USEC of Bethesda, Maryland, will together work on a research and development demonstration program that will keep the project “on a path to commercialization,” USEC spokesman Paul Jacobson said today in a phone interview.
The deal will help USEC develop as many as 720 centrifuges, Damien LaVera, an Energy Department spokesman, said in an e- mail. Congress will be required to authorize the use of Energy Department funds, he said. U.S. spending would be limited to $300 million, USEC said in a statement. No schedule has been set for the project, Jacobson said.
USEC, which supplies enriched uranium fuel for nuclear power plants, rose as much as 13 percent after the close of regular trading in New York, and were up 7.5 percent to $2.01 at 6 p.m. The shares are down 69 percent this year.
Republicans, led by House Speaker John Boehner, and Ohio Democrats are pressing the department to approve the loan guarantee for the centrifuge project in Piketon, about 90 miles (145 kilometers) east of Cincinnati. The agency hasn’t made a final decision, LaVera said.
USEC applied for a loan guarantee in July 2008. The agency in May 2010 granted Paris-based Areva SA a conditional commitment for a $2 billion guarantee for a competing enrichment project.
Congressional Republicans are investigating federal financing after Solyndra LLC, a solar-panel manufacturer that won a $535 million guarantee in 2009, filed for bankruptcy Sept. 6.
USEC said in a Sept. 30 statement that layoffs are likely without a conditional commitment for a guarantee to support its American Centrifuge Plant before Nov. 1. Its “too early to say” whether the deal will prevent cuts in jobs, Jacobson said.
“This is the most significant step yet in realizing the thousands of jobs that would be created” by the centrifuge project, Senator Sherrod Brown, an Ohio Democrat, said in a statement today.
Boehner declined to comment, his spokesman Michael Steel said in an e-mail.
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