USEC Inc. (NYSE: USU) today released key findings from a study conducted
by NERA Economic Consulting of the enrichment market and the positive
effect of USEC’s American Centrifuge Plant. NERA’s study concluded that
without the American Centrifuge Plant, U.S. nuclear utilities will be
dependent on foreign-owned sources of low enriched uranium, and all
nuclear utilities will be at risk of losing purchasing power, facing
higher prices and being subject to anti-competitive behavior by foreign
enrichers.
“NERA’s report makes it clear that the entire nuclear industry has a
stake in the success of the American Centrifuge,” said John Welch, USEC
president and chief executive officer. “In the long term, the presence
of the American Centrifuge Plant will increase competition in the
enrichment industry and provide utilities with more competitive
enrichment prices and better contract terms.”
Key Findings
NERA analyzed multiple scenarios for future market concentration. It
determined that the current enrichment marketplace becomes very highly
concentrated in several scenarios without the American Centrifuge Plant.
NERA concluded that the American Centrifuge Plant will preserve and
increase competition in the enrichment industry and would provide
economic benefits to enrichment buyers through a range of scenarios.
NERA also concluded that without the American Centrifuge Plant the
enrichment market will be dominated by the remaining suppliers, and
utilities will face increased risk of higher enrichment prices.
NERA compared the loss of American Centrifuge Plant to a merger that
would similarly reduce the number of competitors in a market. NERA found
that the market concentration increase that would result from the loss
of the American Centrifuge Plant would be so high that world competition
authorities would likely conclude that a merger causing the same change
in concentration with no offsetting benefits would result in significant
harm to competition and should not be approved. The NERA report stated
that “without the American Centrifuge Plant, the enrichment market faces
a similar and equally unacceptable situation.”
USEC commissioned NERA to conduct the independent market analysis. NERA
is an industry leader who has performed similar analysis for numerous
companies and the U.S. Department of Energy. The full report can be
found at http://www.usec.com/nera.
Background
The American Centrifuge is an advanced U.S. gas centrifuge uranium
enrichment technology. Commercial deployment of the American Centrifuge
technology will provide a long-term, reliable and secure source of fuel
for commercial nuclear power plants in the United States and around the
world. American Centrifuge deployment will support U.S. manufacturing in
28 states, create thousands of U.S. jobs, and play a major role in
ensuring America’s energy and national security.
The value of the role that the American Centrifuge plant provides is
highlighted further by the fact that without its successful deployment
the United States will be without indigenous uranium enrichment
technology – critical to national security – for the first time in
nearly 60 years. The Center for Strategic and International Studies
recently warned in its report titled “Restoring
U.S. Leadership in Nuclear Energy” that “America’s nuclear energy
industry is in decline” and that the “nation is in danger of losing an
industry of unique strategic importance and unique promise for
addressing the environmental and energy security demands of the future.”
The national security oriented Lexington
Institute recently warned that the decline of the U.S. uranium
enrichment industry threatens the nation’s energy and security goals.
USEC Inc., a global energy company, is a leading supplier of enriched
uranium fuel for commercial nuclear power plants.
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” and other words of similar
meaning. Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. For USEC, 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 transition of the
Paducah gaseous diffusion plant and 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
and potential extended duration of the current supply/demand imbalance
in the market for low enriched uranium; 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; uncertainty regarding the timing, amount and availability of
additional funding for the cost-shared American Centrifuge technology
research, development and demonstration (RD&D) program with the U.S.
Department of Energy (DOE) and the dependency of government funding on
Congressional appropriations; restrictions in our credit facility on our
spending on the American Centrifuge project; limitations on our ability
to provide any required cost sharing under the RD&D program; uncertainty
concerning our ability through the RD&D program to demonstrate the
technical and financial readiness of the centrifuge technology for
commercialization; uncertainty concerning the ultimate success of our
efforts to obtain a loan guarantee from DOE and other financing for the
American Centrifuge project or additional government support for the
project and the timing and terms thereof and the potential for a
demobilization or termination of the project if financing or additional
government support is not in place at the end of the RD&D program;
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; the potential for DOE to seek to terminate or
exercise its remedies under the RD&D cooperative agreement or June 2002
DOE-USEC agreement; changes in U.S. government priorities and the
availability of government funding, including loan guarantees; 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 www.usec.com.
We do not undertake to update our forward-looking statements except
as required by law.
Copyright Business Wire 2013