Enrichment Activities

The Energy Policy Act of 1992 (EPAct) created the United States Enrichment Corporation (USEC), a wholly owned Government corporation, to initiate the transfer of the uranium enrichment operation to the private sector. The act transferred the DOE uranium enrichment enterprise, primarily the Paducah and Portsmouth Gaseous Diffusion Plant (GDP) sites to USEC. It required USEC, within two years after the transition date, to prepare a strategic plan for transferring ownership of the corporation to private investors.

USEC began operations on July 1, 1993. On June 30, 1995, USEC presented President Clinton and Congress with their privatization plan. On April 26, 1996, the USEC Privatization Act (Public Law 104-134) was signed. On July 25, 1997, President Clinton approved initiation of USEC privatization. USEC completed privatization on July 28, 1998, through an initial public offering of stock and USEC officially changed its name to USEC Inc.

In 2000, USEC ceased enrichment operations at the Portsmouth GDP site, leaving the Paducah GDP site as the sole domestic supplier of enrichment services for nuclear power plants. As a matter of energy security policy, the Department in 2001 placed a portion of the Portsmouth GDP site on cold standby. On June 17, 2002, in a DOE-USEC Memorandum of Agreement, USEC committed to operate and maintain the long-term operability of the DOE-owned Paducah GDP site until USEC deploys new enrichment technology at the end of this decade.

In the June 2002 agreement, USEC committed to deploy advanced enrichment technology. USEC is conducting research and development on an enhanced version of centrifuge technology that had been developed by DOE in the 1980s. To demonstrate this centrifuge technology, a Cooperative Research and Development Agreement (CRADA) was signed between USEC and UT-Battelle LLC, the operator of the Department’s Oak Ridge National Laboratory, in September 2002. In March 2004, Nuclear Regulatory Commission (NRC) gave USEC a license to operate its American Centrifuge Demonstration Facility (known as the “Lead Cascade”) in Piketon, Ohio. In August 2004, USEC applied for an NRC license for the construction and operation of a full-scale commercial uranium enrichment plant, known as the American Centrifuge Plant. USEC plans to reach a production level of 3.5 million separative work units by 2010.

The Office of Nuclear Fuel Supply Security ensures implementation of the June 2002 Agreement with USEC:

• Monitor USEC Activities at the Paducah GDP site:
  DOE owns the Paducah GDP and leases the plant to USEC. The continued operation of the Paducah GDP is essential in assuring an adequate supply of nuclear fuel for the Nation’s electric utilities. Under the NE-60 program, the Department assures USEC is meeting its commitments under the DOE-USEC Agreement, dated June 17, 2002, and that the U.S. Government’s rights and options are being preserved.
  
  
• Lease Administration and Regulatory Oversight:
  Under the guidance of NE-60, the Oak Ridge Operations Office (ORO) administers leases between DOE and USEC at the Paducah and Portsmouth GDP sites. The EPAct directs NRC to regulate USEC's enrichment operations at the sites. NRC requested DOE to exercise oversight responsibilities until NRC promulgated USEC certification standards and trained staff to handle the new responsibilities. In March 1997, NRC assumed nuclear safety oversight responsibilities. ORO continues to provide regulatory oversight of the portions of the Paducah and Portsmouth GDP sites leased to USEC but not under NRC regulation. For USEC’s Lead Cascade centrifuge facilities, ORO provides regulatory oversight. NRC will accept this responsibility prior to the introduction of uranium hexafluoride gas into the Lead Cascade.