October 7, 2013
BETHESDA, Md. –USEC Inc. (NYSE: USU) 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.”
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.
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.