Delaware
(State of incorporation) |
52-2107911
(I.R.S. Identification No.) |
Title of Each Class
Common Stock, par value $.10 per share Preferred Stock Purchase Rights |
Name of Exchange on Which Registered
New York Stock Exchange New York Stock Exchange |
Page | ||||
PART I
|
||||
Items 1 and 2.
|
Business and Properties | 3 | ||
Item 1A.
|
Risk Factors | 21 | ||
Item 1B.
|
Unresolved Staff Comments | 35 | ||
Item 3.
|
Legal Proceedings | 35 | ||
Item 4.
|
Submission of Matters to a Vote of Security Holders | 35 | ||
|
Executive Officers of the Company | 36 | ||
|
||||
PART II
|
||||
Item 5.
|
Market for Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities | 38 | ||
Item 6.
|
Selected Financial Data | 41 | ||
Item 7.
|
Managements Discussion and Analysis of Financial Condition and Results of Operations | 43 | ||
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk | 71 | ||
Item 8.
|
Consolidated Financial Statements and Supplementary Data | 71 | ||
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 71 | ||
Item 9A.
|
Controls and Procedures | 72 | ||
Item 9B.
|
Other Information | 73 | ||
|
||||
PART III
|
||||
Item 10.
|
Directors and Executive Officers of the Registrant | 73 | ||
Item 11.
|
Executive Compensation | 73 | ||
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 73 | ||
Item 13.
|
Certain Relationships and Related Transactions | 73 | ||
Item 14.
|
Principal Accountant Fees and Services | 73 | ||
|
||||
PART IV
|
||||
Item 15.
|
Exhibits and Financial Statement Schedules | 74 | ||
Signatures | 75 | |||
Consolidated Financial Statements | 76 114 | |||
Glossary | 115 | |||
Exhibit Index | 118 |
2
| supply LEU to both domestic and international utilities for use in about 150 nuclear reactors worldwide, | ||
| are the exclusive executive agent for the U.S. government for a nuclear nonproliferation program with Russia, known as Megatons to Megawatts, | ||
| are in the process of demonstrating, and expect to deploy, what we expect to be the worlds most efficient uranium enrichment technology, known as the American Centrifuge, | ||
| perform contract work for the U.S. Department of Energy (DOE) and DOE contractors at the Paducah and Portsmouth plants, and | ||
| provide transportation and storage systems for spent nuclear fuel and provide nuclear and energy consulting services, including nuclear materials tracking. |
3
| Mining and Milling Natural or unenriched uranium is removed from the earth in the form of ore and then crushed and concentrated. | ||
| Conversion Uranium concentrates are combined with fluorine gas to produce uranium hexafluoride, a powder at room temperature and a gas when heated. Uranium hexafluoride is shipped to an enrichment plant. | ||
| Enrichment Uranium hexafluoride is enriched in a process that increases the concentration of U 235 isotopes in the uranium hexafluoride from its natural state of 0.711% up to 5%, which is usable as a fuel for commercial nuclear power reactors. Depleted uranium is a by-product of the uranium enrichment process. USEC currently has the only commercial uranium enrichment plant operating in the United States. The standard measure of uranium enrichment is a separative work unit (SWU). A SWU represents the effort that is required to transform a given amount of natural uranium into two streams of uranium, one enriched in the U 235 isotope and the other depleted in the U 235 isotope. SWUs are measured using a standard formula derived from the physics of uranium enrichment. The amount of enrichment contained in LEU under this formula is commonly referred to as its SWU component. | ||
| Fuel Fabrication LEU is converted to uranium oxide and formed into small ceramic pellets by fabricators. The pellets are loaded into metal tubes that form fuel assemblies, which are shipped to nuclear power plants. | ||
| Nuclear Power Plant The fuel assemblies are loaded into nuclear reactors to create energy from a controlled chain reaction. Nuclear power plants generate about 16% of the worlds electricity. | ||
| Consumers Businesses and homeowners rely on the steady, baseload electricity supplied by nuclear power and value its clean air qualities. |
4
| sales of the SWU component of LEU, | ||
| sales of both the SWU and uranium components of LEU, and | ||
| sales of uranium. |
| maintaining the Portsmouth gaseous diffusion plant in a state of readiness or cold standby, | ||
| processing out-of-specification uranium, and | ||
| providing infrastructure support services. |
| design, fabrication and implementation of spent nuclear fuel technologies, | ||
| nuclear materials transportation, and | ||
| nuclear fuel cycle consulting services. |
Years Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
United States
|
$ | 1,109.5 | $ | 1,074.1 | $ | 918.2 | ||||||
Foreign:
|
||||||||||||
Japan
|
389.8 | 224.2 | 215.2 | |||||||||
Other
|
349.3 | 261.0 | 283.8 | |||||||||
|
||||||||||||
|
739.1 | 485.2 | 499.0 | |||||||||
|
||||||||||||
|
$ | 1,848.6 | $ | 1,559.3 | $ | 1,417.2 | ||||||
|
5
6
| except as provided in the DOE-USEC Agreement, we have the right to renew the lease at either plant indefinitely and can adjust the property under lease to meet our changing requirements; | ||
| we may leave the property in an as is condition at termination of the lease, but must remove wastes we generate and must place the plants in a safe shutdown condition; | ||
| the U.S. government is responsible for environmental liabilities associated with plant operations prior to July 28, 1998 except for liabilities relating to the disposal of some identified wastes generated by USEC and stored at the plants; | ||
| DOE is responsible for the costs of decontamination and decommissioning of the plants; | ||
| title to capital improvements not removed by USEC will transfer to DOE at the end of the lease term, and if removal of any of our capital improvements increases DOEs decontamination and decommissioning costs, we are required to pay the difference; | ||
| DOE must indemnify us for costs and expenses related to claims asserted against or incurred by us arising out of the U.S. governments operation, occupation, or use of the plants prior to July 28, 1998; and | ||
| DOE must indemnify us against claims for public liability from a nuclear incident or precautionary evacuation in connection with activities under the lease. Under the Price- Anderson Act, DOEs financial obligations under the indemnity are capped at $10 billion for each nuclear incident or precautionary evacuation occurring inside the United States. |
7
8
9
10
| terminate the DOE-USEC Agreement, including DOEs obligation to recommend against removal, in whole or in part, of USEC as Executive Agent under the Russian Contract, | ||
| require us to reimburse DOE for increased costs caused by DOE expediting decontamination and decommissioning of facilities used by us for the centrifuge technology, | ||
| require us to transfer our rights to the centrifuge technology and data in the field of uranium enrichment to DOE royalty-free, | ||
| require us to return any leased facilities where the centrifuge technology project was being or was intended to be constructed, and | ||
| except for plant facilities being operated, require us to waive our exclusive rights to lease the Paducah and Portsmouth plants. |
11
12
13
Milestones under DOE-USEC Agreement | Milestone Date | Achievement Date | ||
Begin refurbishment of K-1600
centrifuge testing facility in Oak Ridge,
Tennessee
|
December 2002 | December 2002 | ||
|
||||
Build and begin testing a centrifuge end cap
|
January 2003 | January 2003 | ||
|
||||
Submit license application for Lead Cascade
to NRC
|
April 2003 | February 2003 | ||
|
||||
NRC dockets Lead Cascade application
|
June 2003 | March 2003 | ||
|
||||
First rotor tube manufactured
|
November 2003 | September 2003 | ||
|
||||
Centrifuge testing begins
|
January 2005 | January 2005 | ||
|
||||
Submit license application for commercial
plant to NRC
|
March 2005 | August 2004 | ||
|
||||
NRC dockets commercial plant application
|
May 2005 | October 2004 | ||
|
||||
Begin Lead Cascade centrifuge manufacturing
|
June 2005 | April 2005 | ||
|
||||
Satisfactory reliability and performance
data obtained from Lead Cascade
|
October 2006 | Under Discussion | ||
|
||||
Financing commitment secured for a
1 million SWU centrifuge plant
|
January 2007 | Under Discussion | ||
|
||||
Begin commercial plant construction and
refurbishment
|
June 2007 | Under Discussion | ||
|
||||
Begin American Centrifuge commercial plant
operations at facility in Piketon, Ohio
|
January 2009 | Under Discussion | ||
|
||||
American Centrifuge Plant capacity at
one million SWU per year
|
March 2010 | Under Discussion | ||
|
||||
American Centrifuge Plant projected to have
an annual capacity of 3.5 million SWU
|
September 2011 | Under Discussion |
14
15
16
| USEC, | ||
| Urenco, a consortium of companies owned or controlled by the British and Dutch governments and by two private German utilities, | ||
| a multinational consortium controlled by AREVA, a company principally owned by the French government, and | ||
| the Russian Federal Agency for Atomic Energy, which sells LEU through TENEX, a Russian government-owned entity. |
17
| SWU contracts were sales of services, not merchandise, and thus were not subject to the U.S. antidumping law, and | ||
| a subsidy provided through government payments under SWU contracts at above-market prices is not subject to the countervailing duty law. |
| the countervailing duty investigation would result in a de minimis subsidy margin that would not support imposition of a countervailing duty order on imports of French LEU, and | ||
| the antidumping margin applicable to imports of French LEU is slightly higher than the margin found in the original investigation, but is applicable only to LEU sold for cash, and not to LEU supplied under SWU contracts in which the customer delivers uranium and pays cash for the SWU component of the LEU. |
18
| a continuation or recurrence of dumping of Russian uranium products (a determination made by the DOC), or | ||
| a continuation or recurrence of material injury to the U.S. uranium industry, including USEC (a determination made by the ITC). |
19
No. of Employees | ||||||||||
at December 31, | ||||||||||
Location | 2006 | 2005 | ||||||||
Paducah Plant
|
Paducah, KY | 1,147 | 1,170 | |||||||
|
||||||||||
Portsmouth Plant
|
Piketon, OH | 1,082 | 1,204 | |||||||
|
||||||||||
NAC
|
Primarily Atlanta, GA | 68 | 73 | |||||||
|
||||||||||
American Centrifuge
|
Primarily Oak Ridge, TN | |||||||||
|
and Piketon, OH | 295 | 230 | |||||||
|
||||||||||
Headquarters
|
Bethesda, MD | 85 | 85 | |||||||
|
||||||||||
|
||||||||||
|
Total Employees | 2,677 | 2,762 |
Number of | Contract | |||||||
Employees | Term | |||||||
Paducah plant:
|
||||||||
USW Local 5-550
|
530 | July 2011 | ||||||
SPFPA Local 111
|
86 | March 2007 | ||||||
|
||||||||
Portsmouth plant:
|
||||||||
USW Local 5-689
|
493 | May 2010 | ||||||
SPFPA Local 66
|
94 | August 2007 |
20
21
22
| the success of our demonstration of the American Centrifuge and the estimated costs, efficiency, timing and return on investment of the deployment of the American Centrifuge Plant; | ||
| consequences of a failure to reach an agreement with DOE regarding the October 2006 and January 2007 milestones and other milestones under the 2002 DOE-USEC Agreement; | ||
| our ability to get loan guarantees or other support from the U.S. government; | ||
| SWU prices; | ||
| our perceived competitive position; | ||
| our ability to secure long-term SWU purchase commitments from customers at adequate prices and for adequate duration; | ||
| projected costs for the disposal of depleted uranium and the decontamination and decommissioning of the American Centrifuge Plant, and the impact of related financial assurance requirements; | ||
| the impact of reductions or changes in trade restrictions on imports of Russian and other foreign LEU and related uncertainties; | ||
| additional downgrades in our credit rating; | ||
| market price and volatility of our common stock; | ||
| general economic and capital market conditions; | ||
| conditions in energy markets; | ||
| regulatory developments; | ||
| investor confidence in the industry and in us; | ||
| our reliance on LEU delivered to us under the Russian Contract; | ||
| the level of success of our current operations; and | ||
| restrictive covenants in the agreements governing our revolving credit facility and any future financing arrangements that limit our operating and financial flexibility. |
23
24
25
26
| equipment breakdowns, | ||
| interruptions of electric power, or an inability to purchase electric power at an acceptable price, | ||
| regulatory enforcement actions, | ||
| labor disruptions, | ||
| unavailability or inadequate supply of uranium feedstock or coolant, | ||
| natural or other disasters, including seismic activity in the vicinity of the Paducah plant, which is located near the New Madrid fault line, or | ||
| accidents or other incidents. |
| SWU and uranium production levels and costs in the industry, | ||
| supply and demand shifts, | ||
| actions taken by governments to regulate, protect or promote trade in nuclear material, including but not limited to the continuation of existing restrictions on unfairly priced imports, | ||
| actions of competitors, | ||
| exchange rates, | ||
| availability of alternate fuels, and | ||
| inflation. |
27
28
29
| accidents, terrorism or other incidents, at nuclear facilities or involving shipments of nuclear materials, | ||
| regulatory actions or changes in regulations by nuclear regulatory bodies, | ||
| disruptions in other areas of the nuclear fuel cycle, such as uranium supplies or conversion, | ||
| civic opposition to, or changes in government policies regarding, nuclear operations, | ||
| business decisions concerning reactors or reactor operations, | ||
| the need for generating capacity, or | ||
| consolidation within the electric power industry. |
| leases for the gaseous diffusion plants and American Centrifuge facilities, | ||
| the Executive Agent MOA under which we are designated the U.S. Executive Agent and purchase the SWU component of LEU under the Russian Contract, | ||
| the DOE-USEC Agreement and other agreements that address issues relating to the domestic uranium enrichment industry and centrifuge technology, | ||
| electric power purchase agreements with the Tennessee Valley Authority, and | ||
| contract work for DOE and DOE contractors at the Portsmouth and Paducah plants, including contracts for maintenance of the Portsmouth plant in cold standby or cold shutdown states, |
30
31
32
33
34
35
Name | Age | Position | ||||
John K. Welch
|
56 | President and Chief Executive Officer | ||||
John C. Barpoulis
|
42 | Senior Vice President and Chief Financial Officer | ||||
Timothy B. Hansen
|
43 | Senior Vice President, General Counsel and Secretary | ||||
Philip G. Sewell
|
60 | Senior Vice President, American Centrifuge and Russian HEU | ||||
Robert Van Namen
|
45 | Senior Vice President, Uranium Enrichment | ||||
W. Lance Wright
|
59 | Senior Vice President, Human Resources and Administration | ||||
John M.A. Donelson
|
42 | Vice President, Marketing and Sales | ||||
Stephen S. Greene
|
49 | Vice President and Treasurer | ||||
Victor N. Lopiano
|
56 | Vice President, American Centrifuge | ||||
J. Tracy Mey
|
46 | Controller and Chief Accounting Officer | ||||
E. John Neumann
|
59 | Vice President, Government Relations | ||||
Russell B. Starkey, Jr.
|
64 | Vice President, Operations |
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
2006
2005
High
Low
High
Low
$
15.84
$
11.08
$
18.69
$
9.39
14.65
9.74
16.95
11.94
12.18
9.19
16.25
9.79
13.52
9.35
12.95
9.05
Number of
securities to be
issued upon
Weighted-average
Number of securities
exercise of
exercise price of
remaining available
outstanding
outstanding
for future issuance
options, warrants
options, warrants
under equity
Plan category
and rights
and rights
compensation plans
1,212,000
$
9.45
7,690,000
(1)
1,212,000
7,690,000
(1)
Includes 7,543,000 shares available for issuance under the USEC Inc. 1999 Equity
Incentive Plan (net of awards which terminate or are cancelled without being exercised or
that are settled for cash) and 147,000 shares available for issuance under the Employee
Stock Purchase Plan.
(c) Total Number
(d) Maximum Number
(a) Total
(b)
of Shares (or Units)
(or Approximate Dollar
Number of
Average
Purchased as Part
Value) of Shares (or
Shares (or
Price Paid
of Publicly
Units) that May Yet Be
Units)
Per Share
Announced Plans
Purchased Under the
Period
Purchased(1)
(or Unit)
or Programs
Plans or Programs
1,631
$
10.52
1,839
$
12.97
3,470
$
11.82
(1)
These purchases were not made pursuant to a publicly announced repurchase plan or
program. Represents 3,470 shares of common stock surrendered to USEC to pay withholding
taxes in connection with the vesting of restricted stock under the 1999 Equity Incentive
Plan.
December 31,
December 31,
December 31,
December 31,
December 31,
December 31,
2001
2002
2003
2004
2005
2006
$
100.00
$
90.74
$
137.46
$
168.92
$
217.81
$
231.84
$
100.00
$
77.90
$
100.24
$
111.15
$
116.61
$
135.02
$
100.00
$
84.68
$
109.48
$
125.13
$
139.15
$
163.21
(1)
The Peer Group consists of: Air Products and
Chemicals, Inc., Albemarle Corporation, Alcoa Inc.,
Constellation Energy Group, Inc., Dominion Resources,
Inc., Duke Energy Corporation, Eastman Chemical
Company, Exelon Corporation, Georgia Gulf Corporation,
NL Industries, Inc., PPL Corporation, Praxair, Inc.,
Progress Energy, Inc., The Southern Company, and XCEL
Energy Inc. In accordance with SEC requirements, the
return for each issuer has been weighted according to
the respective issuers stock market capitalization at
the beginning of each year for which a return is
indicated.
Six-Month
Fiscal Year
Period Ended
Ended
Years Ended December 31,
December 31,
June 30,
2006
2005
2004
2003
2002
2002
2002
(Unaudited)
(millions, except per share data)
$
1,337.4
$
1,085.6
$
1,027.3
$
1,110.8
$
1,181.5
$
668.0
$
1,289.3
316.7
261.3
224.0
159.9
75.3
43.2
116.9
194.5
212.4
165.9
166.0
123.4
69.6
102.6
1,848.6
1,559.3
1,417.2
1,436.7
1,380.2
780.8
1,508.8
1,349.2
1,148.4
1,071.6
1,124.1
1,174.2
675.2
1,305.7
162.5
181.4
151.5
150.2
115.2
66.0
100.9
1,511.7
1,329.8
1,223.1
1,274.3
1,289.4
741.2
1,406.6
336.9
229.5
194.1
162.4
90.8
39.6
102.2
3.9
(1)
7.3
(2)
(6.7
)(3)
(6.7
)(3)
105.5
94.5
58.5
44.8
22.9
16.0
12.6
48.8
61.9
64.1
69.4
54.1
27.6
50.7
(1.0
)(4)
(1.7
)(5)
178.7
66.8
73.2
48.2
20.5
(4.0
)
45.6
14.5
40.0
40.5
38.4
36.5
18.6
36.3
(6.2
)
(10.5
)
(3.9
)
(5.4
)
(7.0
)
(3.2
)
(8.7
)
170.4
37.3
36.6
15.2
(9.0
)
(19.4
)
18.0
64.2
15.0
13.1
6.2
(5.0
)
(6.7
)
4.5
$
106.2
$
22.3
$
23.5
$
9.0
$
(4.0
)
$
(12.7
)
$
13.5
$
1.22
$
.26
$
.28
$
.11
$
(.05
)
$
(.16
)
$
.17
$
$
.55
$
.55
$
.55
$
.55
$
.275
$
.55
December 31,
June 30,
2006
2005
2004
2003
2002
2002
(millions)
$
171.4
$
259.1
$
174.8
$
249.1
$
171.1
$
279.2
900.0
974.3
1,009.4
883.2
862.1
889.7
24.2
71.4
156.2
266.1
390.2
415.5
1,861.4
2,080.8
2,003.4
2,134.8
2,108.4
2,228.2
288.8
150.0
150.0
475.0
500.0
500.0
500.0
300.3
270.2
244.4
256.0
265.0
263.2
986.0
907.6
918.7
923.6
953.5
986.4
(1)
Special charges of $3.9 million in 2006 include a $2.6 million impairment of an intangible
asset established in 2004 relating to the acquisition of NAC, $1.5 million related to
consolidation of office space in connection with the 2005 restructuring plan, and special
credits totaling $0.2 million representing changes in estimate of costs for termination
benefits charged in 2005.
(2)
The plan to restructure headquarters and field operations resulted in special charges of $7.3
million in 2005 related to termination benefits, principally consisting of severance benefits.
(3)
The special credit of $6.7 million in the fiscal year ended June 30, 2002, represented a
change in estimate of costs for consolidating plant operations originally accrued in the
fiscal year ended June 30, 2000.
(4)
Other income in 2005 includes $1.0 million from customs duties paid to USEC as a result of
trade actions.
(5)
Other income in 2004 includes income of $4.4 million from customs duties paid to USEC as a
result of trade actions, partly offset by an expense of $2.7 million for acquired-in-process
research and development expense relating to the acquisition of NAC.
supply LEU to both domestic and international utilities for use in about 150 nuclear
reactors worldwide,
are the exclusive executive agent for the U.S. government under a nuclear
nonproliferation program with Russia, known as Megatons to Megawatts,
are in the process of demonstrating, and expect to deploy, what we expect to be the
worlds most efficient uranium enrichment technology, known as the American Centrifuge,
perform contract work for the U.S. Department of Energy (DOE) and DOE contractors at
the Paducah and Portsmouth plants, and
provide transportation and storage systems for spent nuclear fuel and provide nuclear
and energy consulting services, including nuclear materials tracking.
sales of the SWU component of LEU,
sales of both the SWU and uranium components of LEU, and
sales of uranium.
December 31,
2006
2005
2004
$
136.00
$
113.00
$
107.00
199.00
106.00
63.00
192.54
106.06
75.32
Cumulative
as of
December
2006
2005
2004
31, 2006
$
144.5
$
108.7
$
64.2
$
370.7
$
103.3
$
92.7
$
58.1
$
307.4
$
41.2
$
16.0
$
6.1
$
63.3
(A)
Total expenditures are all American Centrifuge costs including demonstration facility, licensing activities, commercial
plant facility, program management, and interest related costs.
(B)
Cumulative capitalized costs include interest of $4.0 million at December 31, 2006,
$0.9 million at December 31, 2005, and $0.2 million at December 31, 2004.
SWU contracts were sales of services, not merchandise, and thus were not subject to
the U.S. antidumping law, and
a subsidy provided through government payments under SWU contracts at above-market
prices is not subject to the countervailing duty law.
a continuation or recurrence of dumping of Russian uranium products (a determination
made by the DOC), or
a continuation or recurrence of material injury to the U.S. uranium industry,
including USEC (a determination made by the ITC).
The expected return on plan assets was 8.0% for 2006 and is 8.0% for 2007. The expected
return is based on historical returns and expectations of future returns for the
composition of the plans equity and debt securities. A 0.5% change in the expected return
on plan assets would affect annual pension costs by $3.4 million and postretirement health
and life costs by $0.3 million.
A discount rate of 5.75% was used at December 31, 2006 to calculate the net present
value of benefit obligations. The rate is determined based on the investment yield of high
quality corporate bonds. A 0.5% reduction in the discount rate would affect the valuation
of pension benefit obligations by $47.9 million and postretirement health and life benefit
obligations by $9.8 million, and the resulting changes in the valuations would affect
annual pension costs by $4.3 million and postretirement health and life costs by $1.0 million.
The healthcare costs trend rates are 9% projected in 2007 reducing to 5% in 2011. The
healthcare costs trend rate represents our estimate of the annual rate of increase in the
gross cost of providing benefits. The trend rate is a reflection of health care inflation
assumptions, changes in healthcare utilization and delivery patterns, technological
advances, and changes in the health status of our plan participants. A 1% increase in the
healthcare cost trend rates would affect postretirement health benefit obligations by about
$10.1 million and would affect costs by about $1.2 million.
U.S. Government
LEU Segment
Contracts Segment
Total
$
1,654.1
$
194.5
$
1,848.6
1,349.2
162.5
1,511.7
$
304.9
$
32.0
$
336.9
$
1,346.9
$
212.4
$
1,559.3
1,148.4
181.4
1,329.8
$
198.5
$
31.0
$
229.5
$
1,251.3
$
165.9
$
1,417.2
1,071.6
151.5
1,223.1
$
179.7
$
14.4
$
194.1
Total
SWU Revenue
Uranium Revenue
LEU Revenue
$
1,337.4
$
316.7
$
1,654.1
1,085.6
261.3
1,346.9
$
251.8
$
55.4
$
307.2
23
%
21
%
23
%
$
1,085.6
$
261.3
$
1,346.9
1,027.3
224.0
1,251.3
$
58.3
$
37.3
$
95.6
6
%
17
%
8
%
Years Ended December 31,
2006
2005
2004
$
156.7
$
167.5
$
151.4
11.6
17.2
11.6
26.2
27.7
2.9
$
194.5
$
212.4
$
165.9
Years Ended December 31,
2006
2005
2004
$
336.9
$
229.5
$
194.1
3.9
7.3
105.5
94.5
58.5
48.8
61.9
64.1
(1.0
)
(1.7
)
178.7
66.8
73.2
14.5
40.0
40.5
(6.2
)
(10.5
)
(3.9
)
170.4
37.3
36.6
64.2
15.0
13.1
$
106.2
$
22.3
$
23.5
Years Ended December 31,
2006
2005
2004
$
1.3
$
7.3
$
2.6
$
3.9
$
7.3
$
The outcome of ongoing negotiations with TVA regarding the price of electricity
provided to USEC after June 1, 2007;
The timing of recognition of previously deferred revenue;
The timing of the decision to begin capitalizing most spending related to the
American Centrifuge. Any further delays could result in more spending allocated as
expense, which would have a direct negative impact on net income;
Movement and timing of customer orders; and
Additional uranium sales related to underfeeding the production process at Paducah.
Years Ended December 31,
2006
2005
2004
$
278.1
$
188.9
$
52.6
(79.6
)
(26.3
)
(34.3
)
(286.2
)
(78.3
)
(57.6
)
$
(87.7
)
$
84.3
$
(39.3
)
December 31,
2006
2005
(millions)
$
171.4
$
259.1
215.9
256.7
900.0
974.3
(288.8
)
(303.3
)
(338.6
)
$
984.0
$
862.7
December 31,
2006
2005
(millions)
$
$
35.8
25.0
346.2
375.0
the sum of (1) the greater of the JPMorgan Chase Bank prime rate and the federal funds
rate plus
1
/
2
of 1% plus (2) a margin ranging from 0.25% to 0.75% based upon collateral
availability, or
the sum of LIBOR plus a margin ranging from 2.0% to 2.5% based on collateral
availability.
Standard & Poors
Moodys
B-
B1
CCC
B3
Negative
Rating Under Review
2007
2008
2009
2010
2011
Thereafter
Total
$
$
$
150.0
$
$
$
$
150.0
10.1
10.1
5.1
25.3
10.1
10.1
155.1
175.3
187.8
187.8
29.7
29.7
9.1
7.4
6.6
5.7
5.1
67.8
101.7
15.1
15.1
5.0
6.8
39.5
218.8
300.3
241.7
22.5
11.6
12.5
44.6
286.6
619.5
536.3
586.2
626.0
681.4
703.6
1,402.6
4,536.1
$
788.1
$
618.8
$
792.7
$
693.9
$
748.2
$
1,689.2
$
5,330.9
(1)
The 6.750% senior notes amounting to $150.0 million are due January 20, 2009.
(2)
We purchase electric power for the Paducah plant under a power purchase agreement with TVA.
Capacity and prices are fixed through May 2007. We expect to contract for electric power for
the period subsequent to May 2007.
(3)
Purchase commitments are enforceable and legally binding and consist of purchase orders or
contracts issued to vendors and suppliers to procure materials and services.
(4)
Other long-term liabilities reported on the balance sheet
include pension benefit obligations and postretirement health and
life benefit obligations amounting to $148.9 million, accrued depleted uranium disposition
costs of $71.5 million, and the long-term portion of accrued lease turnover costs of $53.6
million.
(5)
Commitments to purchase SWU and uranium for resale include commitments to purchase SWU under
the Russian Contract and to purchase uranium from suppliers. We have agreed to purchase 5.5
million SWU each year for the remaining term of the Russian Contract through 2013. Over the
life of the 20-year Russian Contract, we expect to purchase 92 million SWU contained in LEU
derived from 500 metric tons of highly enriched uranium. Prices are determined using a
discount from an index of international and U.S. price points, including both long-term and
spot prices. A multi-year retrospective of the index is used to minimize the disruptive effect
of any short-term price swings. Actual amounts will vary based on changes in the price
points.
December 31,
2006
2005
$
71.5
$
47.0
$
24.1
$
24.1
130.6
67.3
$
154.7
$
91.4
$
8.8
$
$
$
8.8
$
8.8
$
$
11.7
$
0.9
3.6
2.3
$
15.3
$
3.2
$
35.8
$
25.0
143.0
69.6
$
178.8
$
94.6
$
60.8
$
24.6
commodity price risk for electric power requirements for the Paducah plant (refer to
Overview Cost of Sales and Results of Operations Cost of Sales),
commodity price risk for raw materials needed for construction of the American Centrifuge
Plant, that could affect the overall cost of the project (refer to Overview Our View of
the Business Today), and
interest rate risk relating to any outstanding borrowings at variable interest rates
under the $400.0 million revolving credit agreement (refer to Liquidity and Capital
Resources Capital Structure and Financial Resources).
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
USEC Inc.
/s/ John K. Welch
John K. Welch
President and Chief Executive Officer
Signature
Title
Date
President and Chief Executive Officer
(Principal Executive Officer) and Director
February 27, 2007
Senior Vice President and Chief Financial
Officer (Principal Financial Officer)
February 27, 2007
Controller and Chief Accounting Officer
(Principal Accounting Officer)
February 27, 2007
Chairman of the Board
February 27, 2007
Director
February 27, 2007
Director
February 27, 2007
Director
February 27, 2007
Director
February 27, 2007
Director
February 27, 2007
Director
February 27, 2007
Director
February 27, 2007
Page
77
79
80
81
82
83 - 114
McLean, Virginia
February 23, 2007
CONSOLIDATED BALANCE SHEETS
(millions, except share and per share data)
CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share data)
Years Ended December 31,
2006
2005
2004
$
1,337.4
$
1,085.6
$
1,027.3
316.7
261.3
224.0
194.5
212.4
165.9
1,848.6
1,559.3
1,417.2
1,349.2
1,148.4
1,071.6
162.5
181.4
151.5
1,511.7
1,329.8
1,223.1
336.9
229.5
194.1
3.9
7.3
105.5
94.5
58.5
48.8
61.9
64.1
(1.0
)
(1.7
)
178.7
66.8
73.2
14.5
40.0
40.5
(6.2
)
(10.5
)
(3.9
)
170.4
37.3
36.6
64.2
15.0
13.1
$
106.2
$
22.3
$
23.5
$
1.22
$
.26
$
.28
$
$
.55
$
.55
86.6
86.1
84.1
86.8
86.6
84.8
CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
Years Ended December 31,
2006
2005
2004
$
106.2
$
22.3
$
23.5
36.7
35.0
31.8
(13.4
)
(43.2
)
2.6
2.6
35.0
40.8
(18.2
)
16.0
176.1
76.3
(17.0
)
(6.3
)
21.9
(29.6
)
(33.2
)
(3.7
)
42.0
(12.1
)
24.5
19.8
(3.8
)
(82.1
)
26.2
36.9
(3.3
)
6.8
2.5
278.1
188.9
52.6
(44.8
)
(26.3
)
(20.2
)
(34.8
)
(8.1
)
(6.0
)
(79.6
)
(26.3
)
(34.3
)
133.8
4.7
116.2
(133.8
)
(4.7
)
(116.2
)
(47.3
)
(46.3
)
(288.8
)
(36.3
)
(25.6
)
0.4
(0.3
)
(3.5
)
2.5
8.8
14.3
(286.2
)
(78.3
)
(57.6
)
(87.7
)
84.3
(39.3
)
259.1
174.8
214.1
$
171.4
$
259.1
$
174.8
$
19.3
$
32.6
$
35.2
107.3
38.7
3.6
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(millions, except per share data)
Common
Accumulated
Stock,
Excess of
Other
Par Value
Capital
Deferred
Compre-
Total
Compre-
$.10 per
over
Retained
Treasury
Comp-
hensive
Stockholders
hensive
Share
Par Value
Earnings
Stock
ensation
Income (Loss)
Equity
Income (Loss)
$
10.0
$
1,009.0
$
32.8
$
(127.7
)
$
(0.5
)
$
$
923.6
$
0.5
12.5
13.0
0.7
6.0
(1.1
)
5.6
(46.3
)
(46.3
)
(0.7
)
(0.7
)
(0.7
)
23.5
23.5
23.5
10.0
963.9
56.3
(109.2
)
(1.6
)
(0.7
)
918.7
$
22.8
0.3
5.1
5.4
6.4
4.6
(1.1
)
9.9
(47.3
)
(47.3
)
(1.4
)
(1.4
)
(1.4
)
22.3
22.3
22.3
10.0
970.6
31.3
(99.5
)
(2.7
)
(2.1
)
907.6
$
20.9
2.1
2.1
2.7
1.9
4.6
(2.7
)
2.7
1.1
1.1
1.1
(35.6
)
(35.6
)
106.2
106.2
106.2
$
10.0
$
970.6
$
137.5
$
(95.5
)
$
$
(36.6
)
$
986.0
$
107.3
Capital
Transfers,
Capital
Transfers
December 31,
Expenditures
Retirements, and
December 31,
Expenditures
and
December 31,
2003
(Depreciation)
Other
2004
(Depreciation)
Retirements
2005
$
9.1
$
19.2
$
(15.0
)
$
13.3
$
28.0
$
(12.3
)
$
29.0
151.4
5.7
157.1
4.4
161.5
160.1
1.0
13.2
174.3
0.4
5.0
179.7
320.6
20.2
3.9
344.7
28.4
(2.9
)
370.2
(135.5
)
(31.8
)
0.6
(166.7
)
(34.7
)
2.4
(199.0
)
$
185.1
$
(11.6
)
$
4.5
$
178.0
$
(6.3
)
$
(0.5
)
$
171.2
Capital
Transfers
December 31,
Expenditures
and
December 31,
2005
(Depreciation)
Retirements
2006
$
29.0
$
53.9
$
(11.1
)
$
71.8
161.5
6.5
168.0
179.7
1.2
1.1
182.0
370.2
55.1
(3.5
)
421.8
(199.0
)
(36.3
)
3.4
(231.9
)
$
171.2
$
(18.8
)
$
(0.1
)
$
189.9
Years Ended December 31,
2006
2005
2004
(in millions)
86.6
86.1
84.1
.2
.5
.7
86.8
86.6
84.8
December 31,
2006
2005
$
6.8
$
7.5
0.6
3.6
$
7.4
$
11.1
Year Ended
Year Ended
December 31, 2006
December 31, 2005
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
Amount
Amortization
Net
Amount
Amortization
Net
$
1.3
$
(0.7
)
$
0.6
$
3.9
$
(0.3
)
$
3.6
December 31,
2006
2005
(millions)
$
176.3
$
207.0
1.5
176.3
208.5
19.8
33.6
19.8
14.6
39.6
48.2
$
215.9
$
256.7
$
78.4
$
55.7
19.4
13.0
$
97.8
$
68.7
$
68.6
$
86.9
5.2
13.5
7.4
37.4
47.9
79.6
$
129.1
$
217.4
(1)
Valuation and allowances for doubtful accounts were $14.4 million and $12.5 million
at December 31, 2006 and 2005, respectively.
(2)
Billings under government contracts are invoiced based on provisional billing rates
approved by DOE. Unbilled revenue represents the difference between actual costs
incurred and invoiced amounts. USEC expects to invoice and collect the unbilled amounts
as provisional billing rates are revised, submitted to and approved by DOE.
December 31,
2006
2005
(millions)
$
701.7
$
790.3
189.1
171.3
9.2
12.7
900.0
974.3
24.2
37.6
33.8
24.2
71.4
(56.9
)
(2.3
)
$
867.3
$
1,043.4
Years Ended December 31,
2006
2005
2004
$
70.4
$
51.7
$
8.8
7.2
6.5
1.7
77.6
58.2
10.5
(14.4
)
(42.4
)
2.9
1.0
(0.8
)
(0.3
)
(13.4
)
(43.2
)
2.6
$
64.2
$
15.0
$
13.1
December 31,
2006
2005
$
23.4
$
23.2
68.6
46.0
7.6
15.9
40.8
24.2
5.4
6.4
26.1
19.0
1.9
2.0
6.9
5.6
2.2
1.2
182.9
143.5
(1.4
)
(2.3
)
181.5
141.2
1.3
1.5
1.3
1.5
$
180.2
$
139.7
Years Ended December 31,
2006
2005
2004
35
%
35
%
35
%
2
2
3
(1
)
(1
)
(2
)
(6
)
(3
)
(1
)
(5
)
(4
)
3
1
2
3
2
12
1
1
38
%
40
%
36
%
December 31,
2006
2005
(millions)
$
$
288.8
150.0
150.0
$
150.0
$
438.8
the sum of (1) the greater of the JPMorgan Chase Bank prime rate and the federal funds
rate plus
1
/
2
of 1% plus (2) a margin ranging from .25% to .75% based upon collateral availability,
or
the sum of LIBOR plus a margin ranging from 2.0% to 2.5% based on collateral
availability.
December 31,
2006
2005
$
129.4
$
106.8
4.4
8.3
17.8
$
133.8
$
132.9
Paid
Balance
Special
Paid
Balance
Special
and
Dec. 31,
Charge
and
Dec. 31,
Charge
Utilized
2005
(Credit)
Utilized
2006
$
4.5
$
(2.7
)
$
1.8
$
$
(1.8
)
$
2.8
(1.5
)
1.3
(0.2
)
(1.1
)
1.5
(1.5
)
$
7.3
$
(4.2
)
$
3.1
$
1.3
$
(4.4
)
$
$
9.1
7.4
6.6
5.7
5.1
67.8
$
101.7
The initial term of the GCEP Lease expires June 30, 2009, but can be extended
under specified conditions by five years when an NRC license is issued for the American
Centrifuge Plant. After the first five-year extension, USEC has the option to extend the
lease term for additional five-year terms up to a date that is 36 years after the date the
NRC license is issued. Thereafter, USEC also has the right to extend the GCEP Lease for up
to an additional 20 years, through 2063, if it agrees to demolish the existing buildings
leased to USEC;
USEC has the option, with DOEs consent, to expand the leased property to
meet its needs until the earlier of September 30, 2013 or the expiration or termination of
the GDP Lease;
Rent is based on the cost of lease administration and regulatory oversight
and is initially estimated to be approximately $1.9 million per year, but is based on the
amount of administration and oversight needed;
USEC must maintain any NRC required financial assurance and must also
maintain financial assurance for DOE in an amount equal to a current estimate of costs to
comply with lease turnover requirements that are not covered by the NRC financial
assurance;
USEC may terminate the GCEP Lease upon three years notice. DOE may
terminate for default, including default under the Companys June 2002 agreement with DOE
(which includes milestones for demonstration and deployment of the American Centrifuge),
abandonment of the American Centrifuge project, and failure to operate at 1 million SWU per
year over a 2 year rolling average period (beginning the earlier of when the American
Centrifuge Plant reaches 3.5 million SWU capacity or four years after issuance of a license
from NRC for the American Centrifuge Plant);
USEC owns all capital improvements and, unless otherwise consented by DOE,
must remove them at lease turnover; and
DOE generally remains responsible for pre-existing conditions of the leased
facilities. USEC must return the leased facilities to DOE in a condition that meets NRC
requirements and is in the same condition as the facilities were in when they were leased
to United States Enrichment Corporation (other than due to normal wear and tear).
Pre-SFAS
Adoption
Post-SFAS
No. 158
Adjustments
No. 158
$
85.8
$
(72.0
)
$
13.8
1.1
(1.1
)
(0.3
)
(0.3
)
(13.0
)
(7.2
)
(20.2
)
(146.7
)
18.0
(128.7
)
0.8
26.9
27.7
1.0
35.6
36.6
Postretirement Health
Defined Benefit Pension Plans
and Life Benefit Plans
Years Ended
Years Ended
December 31,
December 31,
2006
2005
2006
2005
$
742.2
$
701.1
$
202.7
$
253.8
(16.9
)
29.7
(7.5
)
1.3
0.7
0.1
(66.4
)
(0.5
)
0.1
(10.5
)
18.3
16.7
4.7
7.2
40.7
39.7
11.0
14.4
(40.6
)
(34.1
)
(8.9
)
(7.7
)
N/A
N/A
0.2
744.4
742.2
202.2
202.7
684.7
657.4
69.6
64.5
77.5
52.9
7.1
4.7
16.1
8.5
5.7
8.1
(40.6
)
(34.1
)
(8.9
)
(7.7
)
737.7
684.7
73.5
69.6
(6.7
)
(57.5
)
(128.7
)
(133.1
)
N/A
11.9
N/A
(66.4
)
N/A
117.3
N/A
45.6
N/A
$
71.7
N/A
$
(153.9
)
$
13.8
$
86.2
$
$
(0.3
)
(17.9
)
(20.2
)
(128.7
)
(153.9
)
$
(6.7
)
$
68.3
$
(128.7
)
$
(153.9
)
N/A
$
3.4
N/A
N/A
$
71.3
N/A
$
33.9
N/A
11.0
N/A
(51.9
)
N/A
$
82.3
$
3.4
$
(18.0
)
N/A
5.75
%
5.50
%
5.75
%
5.50
%
4.00
3.75
4.00
3.75
Postretirement Health
Defined Benefit Pension Plans
and Life Benefit Plans
Years Ended December 31,
Years Ended December 31,
2006
2005
2004
2006
2005
2004
$
18.3
$
16.7
$
14.6
$
4.7
$
7.2
$
7.3
40.7
39.7
38.4
11.0
14.4
14.0
(53.8
)
(54.9
)
(50.9
)
(5.5
)
(5.5
)
(4.8
)
1.7
1.7
2.0
(14.5
)
(0.9
)
(2.4
)
5.3
3.2
1.8
2.6
1.5
1.4
(4.9
)
0.6
0.1
$
12.2
$
2.1
$
5.9
$
(1.7
)
$
16.8
$
15.5
5.50
%
5.75
%
6.00
%
5.50
%
5.75
%
6.00
%
8.00
8.50
8.50
8.00
8.50
8.50
3.75
3.75
4.00
3.75
3.75
4.00
Postretirement Health
Benefit Plans
December 31,
2006
2005
9
%
9
%
5
%
5
%
2011
2010
One Percentage Point
Increase
Decrease
$
10.1
$
(9.6
)
1.2
(1.1
)
Percentage of
Target
Plan Assets
Allocation
December 31,
Range
2006
2005
2006
64
%
66
%
50-70
%
36
34
30-50
100
%
100
%
68
%
66
%
55-75
%
32
34
25-45
100
%
100
%
Postretirement
Expected
Defined Benefit
Health and Life
Subsidies
Pension Plans
Benefit Plans
From Medicare
$
36.0
$
9.8
$
0.3
37.0
11.2
0.4
38.5
12.7
0.5
40.0
14.2
0.6
41.7
15.5
0.8
255.6
91.7
7.3
Weighted-Average
Stock
Weighted-
Remaining
Aggregate
Options
Average
Contractual
Intrinsic Value
(thousands)
Exercise Price
Term (years)
(millions)
1,355
8.97
288
12.28
(292
)
7.31
(139
)
15.10
1,212
$
9.45
4.3
$
4.3
822
$
8.40
4.4
$
3.9
Weighted Average
Remaining
Contractual Life in
Stock Exercise Price
Options Outstanding
Years
Options Exercisable
$3.63 to $6.97
163
4.1
163
7.00
107
6.6
107
7.02 to 7.13
187
5.1
187
8.05
104
2.2
69
8.50
142
4.6
142
10.44 to 11.88
103
3.7
36
12.09
262
4.3
12.19 to 14.28
57
3.9
31
16.90
87
3.3
87
1,212
4.3
822
Weighted-Average
Grant-Date
Shares
Fair Value
721
10.44
249
12.25
(117
)
14.13
(55
)
13.11
798
$
10.28
Years Ended December 31,
2005
2004
$
22.3
$
23.5
3.0
3.3
(6.0
)
(5.1
)
$
19.3
$
21.7
$
.26
$
.28
.22
.26
Shares
Treasury
Shares
Issued
Stock
Outstanding
100,320
(17,766
)
82,554
2,595
2,595
100,320
(15,171
)
85,149
1,422
1,422
100,320
(13,749
)
86,571
571
571
100,320
(13,178
)
87,142
Years Ended December 31,
2006
2005
2004
$
1,109.5
$
1,074.1
$
918.2
389.8
224.2
215.2
349.3
261.0
283.8
739.1
485.2
499.0
$
1,848.6
$
1,559.3
$
1,417.2
Years Ended December 31,
2006
2005
2004
(millions)
$
1,337.4
$
1,085.6
$
1,027.3
316.7
261.3
224.0
1,654.1
1,346.9
1,251.3
194.5
212.4
165.9
$
1,848.6
$
1,559.3
$
1,417.2
$
304.9
$
198.5
$
179.7
32.0
31.0
14.4
336.9
229.5
194.1
105.5
94.5
58.5
48.8
61.9
64.1
3.9
6.3
(1.7
)
178.7
66.8
73.2
8.3
29.5
36.6
$
170.4
$
37.3
$
36.6
December 31,
2006
2005
2004
(millions)
$
1,800.1
$
2,008.5
$
1,952.1
61.3
72.3
51.3
$
1,861.4
$
2,080.8
$
2,003.4
March 31,
June 30,
Sept. 30,
Dec. 31,
Year
2006
2006
2006
2006
2006
$
361.3
$
525.3
$
417.8
$
544.2
$
1,848.6
269.3
445.7
365.7
431.0
1,511.7
92.0
79.6
52.1
113.2
336.9
1.5
(1)
(0.1
)(1)
2.5
(1)
3.9
(1)
19.8
27.3
23.9
34.5
105.5
11.7
14.1
10.9
12.1
48.8
59.0
38.2
17.4
64.1
178.7
4.7
3.5
3.2
3.1
14.5
(1.8
)
(0.5
)
(1.7
)
(2.2
)
(6.2
)
21.5
13.6
6.0
23.1
64.2
$
34.6
$
21.6
$
9.9
$
40.1
$
106.2
$
.40
$
.25
$
.11
$
.46
$
1.22
86.3
86.6
86.7
86.8
86.6
86.6
86.9
86.9
87.0
86.8
March 31,
June 30,
Sept. 30,
Dec. 31,
Year
2005
2005
2005
2005
2005
$
311.2
$
277.4
$
421.0
$
549.7
$
1,559.3
263.5
235.2
384.5
446.6
1,329.8
47.7
42.2
36.5
103.1
229.5
4.5
(1)
2.8
(1)
7.3
(1)
22.7
23.9
20.5
27.4
94.5
15.2
14.0
12.3
20.4
61.9
(1.0
)(2)
(1.0
)(2)
9.8
4.3
(0.8
)
53.5
66.8
8.7
9.1
9.0
13.2
40.0
(1.9
)
(3.2
)
(2.3
)
(3.1
)
(10.5
)
2.1
1.4
(2.3
)
13.8
15.0
$
0.9
$
(3.0
)
$
(5.2
)
$
29.6
$
22.3
$
.01
$
(.03
)
$
(.06
)
$
.34
$
.26
85.5
86.2
86.3
86.5
86.1
86.0
86.2
86.3
86.9
86.6
(1)
In 2005, the plan to restructure headquarters and field operations resulted in special
charges of $7.3 million related to termination benefits. In 2006, special charges consisted of
a $1.5 million charge related to consolidation of office space in connection with the 2005
restructuring plan, credits of $0.2 million representing changes in estimate of costs for
termination benefits charged in 2005, and a $2.6 million impairment of an intangible asset
established in 2004 relating to the acquisition of NAC.
(2)
Other income in the three months and year ended December 31, 2005, includes $1.0 million from
customs duties paid to USEC as a result of trade actions.
(3)
No dilutive effect of stock compensation awards is recognized in those periods in which a net
loss has occurred.
uranium.
Exhibit No.
Description
Certificate of Incorporation of USEC Inc., incorporated by reference to Exhibit 3.1 of the
Registration Statement on Form S-1, filed June 29, 1998 (Commission file number 333-57955).
Amended and Restated Bylaws of USEC Inc., dated September 13, 2000, incorporated by
reference to Exhibit 3.3 of the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000 (Commission file number 1-14287).
Indenture, dated January 15, 1999, between USEC Inc. and First Union National Bank,
incorporated by reference to Exhibit 4.2 of the Annual Report on Form 10-K for the fiscal
year ended June 30, 1999 (Commission file number 1-14287).
Rights Agreement, dated April 24, 2001, between USEC Inc. and Fleet National Bank, as
Rights Agent, including the form of Certificate of Designation, Preferences and Rights as
Exhibit A, the form of Rights Certificates as Exhibit B and the Summary of Rights as
Exhibit C, incorporated by reference to Exhibit 4.3 of the Registration Statement on Form
8-A filed April 24, 2001 (Commission file number 1-14287).
Lease Agreement between the United States Department of Energy (DOE) and the United
States Enrichment Corporation, dated as of July 1, 1993, including notice of exercise of
option to renew, incorporated by reference to Exhibit 10.1 of the Registration Statement on
Form S-1, filed June 29, 1998 (Commission file number 333-57955).
Supplemental Agreement No. 1 to the Lease Agreement between DOE and the United States
Enrichment Corporation, dated as of December 7, 2006. (Certain information has been omitted
and filed separately pursuant to confidential treatment under Rule 24b-2). (a)
Contract between United States Enrichment Corporation, Executive Agent of the United States
of America, and AO Techsnabexport, Executive Agent of the Ministry of Atomic Energy,
Executive Agent of the Russian Federation, dated January 14, 1994, as amended (Russian
Contract) incorporated by reference to Exhibit 10.17 of the Registration Statement on Form
S-1, filed June 29, 1998 (Commission file number 333-57955).
Amendment No. 11, dated June 1998, to Russian Contract, incorporated by reference to
Exhibit 10.4 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Amendment No. 12, dated March 4, 1999, to Russian Contract, incorporated by reference to
Exhibit 10.36 of the Annual Report on Form 10-K for the fiscal year ended June 30, 1999
(Commission file number 1-14287).
Amendment No. 13, dated November 11, 1999, to Russian Contract, incorporated by reference
to Exhibit 10.6 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Amendment No. 14, dated October 27, 2000, to Russian Contract, incorporated by reference to
Exhibit 10.7 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Amendment No. 15, dated January 18, 2001, to Russian Contract, incorporated by reference to
Exhibit 10.8 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Memorandum of Agreement, dated April 6, 1998, between the Office of Management and Budget
and United States Enrichment Corporation relating to post-privatization liabilities,
incorporated by reference to Exhibit 10.18 of the Registration Statement on Form S-1, filed
June 29, 1998 (Commission file number 333-57955).
Memorandum of Agreement, dated April 20, 1998, between DOE and United States Enrichment
Corporation for transfer of natural uranium and highly enriched uranium and for blending
down of highly enriched uranium, incorporated by reference to Exhibit 10.20 of the
Registration Statement on Form S-1, filed June 29, 1998 (Commission file number 333-57955).
Exhibit No.
Description
Memorandum of Agreement entered into as of April 18, 1997, between the United States,
acting by and through the United States Department of State and the DOE, and United States
Enrichment Corporation for United States Enrichment Corporation to serve as the United
States Governments Executive Agent under the Agreement between the United States and the
Russian Federation concerning the disposal of highly enriched uranium extracted from
nuclear weapons, incorporated by reference to Exhibit 10.26 of the Registration Statement
on Form S-1/A, filed July 21, 1998 (Commission file number 333-57955).
Memorandum of Agreement, entered into as of June 30, 1998, between DOE and United States
Enrichment Corporation regarding certain worker benefits, incorporated by reference to
Exhibit 10.28 of the Registration Statement on Form S-1/A, filed July 21, 1998 (Commission
file number 333-57955).
Power Contract between Tennessee Valley Authority and United States Enrichment Corporation,
dated July 11, 2000 (TVA Power Contract), incorporated by reference to Exhibit 10.45 of
the Annual Report on Form 10-K for the fiscal year ended June 30, 2000 (Commission file
number 1-14287). (Certain information has been omitted and filed separately pursuant to
confidential treatment under Rule 24b-2).
Supplement No. 1 dated March 2, 2006 to TVA Power Contract, incorporated by reference to
Exhibit 10.2 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006
(Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to confidential treatment under Rule 24b-2).
Supplement No. 2 dated March 2, 2006 to TVA Power Contract, incorporated by reference to
Exhibit 10.3 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006
(Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to confidential treatment under Rule 24b-2).
Amendatory Agreement (Supplement No. 3) dated April 3, 2006 to TVA Power Contract,
incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006 (Commission file number 1-14287). (Certain information has
been omitted and filed separately pursuant to confidential treatment under Rule 24b-2).
Agreement, dated June 17, 2002, between DOE and USEC Inc., incorporated by reference to
Exhibit 10.54 of the current report on Form 8-K filed June 21, 2002 (Commission file number
1-14287).
Modification 1 to Agreement dated June 17, 2002 between DOE and USEC Inc., dated August 20,
2002, incorporated by reference to Exhibit 10.15 of the Annual Report on Form 10-K for the
year ended December 31, 2005 (Commission file number 1-14287).
Cooperative Research and Development Agreement, Development of an Economically Attractive
Gas Centrifuge Machine and Enrichment Process, by and between UT-Battelle, LLC, under its
DOE Contract, and USEC Inc., dated June 30, 2000, Amendment A, dated July 12, 2002, and
Amendment B, dated September 11, 2002, incorporated by reference to Exhibit 10.58 of the
Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (Commission file
number 1-14287).
Administrative Order on Consent for Removal Action in the Matter of Starmet CMI, dated
February 6, 2004, between the United States Environmental Protection Agency, United States
Enrichment Corporation, DOE and United States Department of the Army, incorporated by
reference to Exhibit 10.64 of the Annual Report on Form 10-K for the year ended December
31, 2003 (Commission file number 1-14287).
Stock Purchase Agreement, dated July 29, 2004, by and among Pinnacle West Capital
Corporation, El Dorado Investment Company and USEC Inc., incorporated by reference to
Exhibit 10.67 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004
(Commission file number 1-14287).
Amendment to the Stock Purchase Agreement, dated November 18, 2004, by and among USEC Inc.,
Pinnacle West Capital Corporation and El Dorado Investment Company, incorporated by
reference to Exhibit 10.74 of the current report on Form 8-K filed November 19, 2004
(Commission file number 1-14287).
Memorandum of Understanding between USEC Inc. and DOE, dated October 22, 2004, Effectuating
the Transfer of Natural Uranium Hexafluoride for Affected Inventory, incorporated by
reference to Exhibit 10.68 of the current report on Form 8-K filed October 28, 2004
(Commission file number 1-14287).
Exhibit No.
Description
Memorandum of Agreement between USEC Inc. and DOE, dated as of December 10, 2004, for the
Continued Operation of Portsmouth S&T Facilities for the Processing of Affected Inventory
in Fiscal Year 2005 and Thereafter, incorporated by reference to Exhibit 10.75 of the
current report on Form 8-K filed December 16, 2004 (Commission file number 1-14287).
Amendment No. 1 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated May 16, 2005, incorporated by reference to Exhibit 10.23 of the Annual Report on Form
10-K for the year ended December 31, 2005 (Commission file number 1-14287).
Amendment No. 2 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated February 9, 2006, incorporated by reference to Exhibit 10.1 of the Quarterly Report
on Form 10-Q for the quarter ended March 31, 2006 (Commission file number 1-14287).
Amendment No. 3 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated June 23, 2006, incorporated by reference to Exhibit 10.1 of the Quarterly Report on
Form 10-Q for the quarter ended June 30, 2006 (Commission file number 1-14287).
Amendment No. 4 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated September 18, 2006, incorporated by reference to Exhibit 10.1 of the Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006 (Commission file number 1-14287).
Amendment No. 5 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated November 30, 2006. (a)
Amended and Restated Revolving Credit Agreement dated as of August 18, 2005 among USEC
Inc., United States Enrichment Corporation, the lenders named therein, JPMorgan Chase Bank,
N.A., as administrative and collateral agent, J.P. Morgan Securities, Inc., Merrill Lynch
Capital and Goldman Sachs Credit Partners, L.P., as joint book managers and joint lead
arrangers, Merrill Lynch Capital and Goldman Sachs Credit Partners, L.P., as co-syndication
agents, GMAC Commercial Finance LLC and Wachovia Bank, National Association, as
co-documentation agents, and CIT Capital Securities, LLC, as co-agent, incorporated by
reference to Exhibit 10.83 of the Current Report on Form 8-K filed on August 23, 2005
(Commission file number 1-14287).
First Amendment to Amended and Restated Revolving Credit Agreement dated as of August 18,
2005 among USEC Inc., United States Enrichment Corporation, the lenders named therein,
JPMorgan Chase Bank, N.A., as administrative and collateral agent, and the other financial
institutions named therein, dated March 6, 2006, incorporated by reference to Exhibit 10.2
of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (Commission file
number 1-14287).
Second Amendment to Amended and Restated Revolving Credit Agreement among USEC Inc., United
States Enrichment Corporation, the lenders named therein, JPMorgan Chase Bank, N.A., as
administrative and collateral agent, and the other financial institutions named therein,
dated October 16, 2006, incorporated by reference to Exhibit 10.1 of the Current Report on
Form 8-K filed on October 19, 2006 (Commission file number 1-14287).
Amended and Restated Omnibus Pledge and Security agreement dated as of August 18, 2005 by
USEC Inc., United States Enrichment Corporation, NAC Holding Inc. and NAC International
Inc., in favor of JPMorgan Chase Bank, N.A., as administrative and collateral agent for the
lenders, incorporated by reference to Exhibit 10.84 of the Current Report on Form 8-K filed
on August 23, 2005 (Commission file number 1-14287).
License dated December 7, 2006 between the United States of America, as represented by DOE,
as licensor, and USEC Inc., as licensee. (a)
Form of Director and Officer Indemnification Agreement, incorporated by reference to
Exhibit 10.25 of the Registration Statement on Form S-1/A, filed July 21, 1998 (Commission
file number 333-57955). (b)
Form of Change in Control Agreement with executive officers, incorporated by reference to
Exhibit 10.40 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 1999
(Commission file number 1-14287). (b)
Exhibit No.
Description
Form of First Amendment to Change in Control Agreement with executive officers,
incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006 (Commission file number 1-14287). (b)
Form of Change in Control Agreement with senior executive officers, incorporated by
reference to Exhibit 10.82 to the quarterly report on Form 10-Q for the quarter ended June
30, 2005 (Commission file number 1-14287). (b)
Form of First Amendment to Change in Control Agreement with senior executive officers,
incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006 (Commission file number 1-14287). (b)
USEC Inc. 1999 Equity Incentive Plan, incorporated by reference to Exhibit 10.35 of the
Registration Statement on Form S-8, No. 333-71635, filed February 2, 1999. (b)
First Amendment to the USEC Inc. 1999 Equity Incentive Plan, incorporated by reference to
Annex B of Schedule 14A filed March 31, 2004, with respect to the 2004 annual meeting of
shareholders (Commission file number 1-14287). (b)
Form of Employee Nonqualified Stock Option Agreement, incorporated by reference to Exhibit
4.4 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2004
(Commission file number 1-14287). (b)
Form of Employee Nonqualified Stock Option Agreement in connection with an employment
agreement, incorporated by reference to Exhibit 4.5 of the Quarterly Report on Form 10-Q
for the quarter ended September 30, 2004 (Commission file number 1-14287). (b)
Form of Employee Restricted Stock Award Agreement (stock in lieu of annual incentive),
incorporated by reference to Exhibit 4.6 of the Annual Report on Form 10-K for the year
ended December 31, 2004 (Commission file number 1-14287). (b)
Form of Employee Restricted Stock Award Agreement (three year vesting), incorporated by
reference to Exhibit 4.7 of the Annual Report on Form 10-K for the year ended December 31,
2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Nonqualified Stock Option Agreement, incorporated by
reference to Exhibit 4.8 of the Annual Report on Form 10-K for the year ended December 31,
2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Award Agreement Founders Stock and
Incentive Stock, incorporated by reference to Exhibit 4.9 of the Annual Report on Form 10-K
for the year ended December 31, 2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Award Agreement Annual Retainers and
Meeting Fees, incorporated by reference to Exhibit 4.10 of the Annual Report on Form 10-K
for the year ended December 31, 2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Annual Retainers and
Meeting Fees), incorporated by reference to Exhibit 10.2 of the current report on Form 8-K
filed on April 28, 2006 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Incentive Awards),
incorporated by reference to Exhibit 10.3 of the current report on Form 8-K filed on April
28, 2006 (Commission file number 1-14287). (b)
USEC Inc. Pension Restoration Plan, dated September 1, 1999, incorporated by reference to
Exhibit 10.39 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 1999
(Commission file number 1-14287). (b)
USEC Inc. 401(k) Restoration Plan, incorporated by reference to Exhibits 10.41(a) through
(f) of the Quarterly Report on Form 10-Q for the quarter ended December 31, 1999
(Commission file number 1-14287). (b)
USEC Inc. Supplemental Executive Retirement Plan, dated April 7, 1999 and amended April 25,
2001, incorporated by reference to Exhibit 10.51 of the Annual Report on Form 10-K for the
fiscal year ended June 30, 2001 (Commission file number 1-14287). (b)
Exhibit No.
Description
Summary Sheet for 2005 Non-Employee Director Compensation, incorporated by reference to
Exhibit 10.77 to the Current Report on Form 8-K filed on April 27, 2005 (Commission file
number 1-14287). (b)
Summary Sheet for 2006 Non-Employee Director Compensation, incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed on December 18, 2006 (Commission file
number 1-14287). (b)
Summary Sheet for 2007 Non-Employee Director Compensation. (a)(b)
Summary of 2005 Annual Performance Objectives for Executive Officers, incorporated by
reference to Exhibit 10.81 to the Current Report on Form 8-K filed on June 20, 2005
(Commission file number 1-14287). (b)
Severance Agreement and General Release dated September 12, 2005 by and between the Company
and Lisa Gordon-Hagerty, incorporated by reference to Exhibit 10.89 of the Current Report
on Form 8-K filed on September 13, 2005 (Commission file number 1-14287). (b)
Summary of Compensation Arrangements for Certain Executive Officers, incorporated by
reference to Exhibit 10.90 of the Current Report on Form 8-K filed on September 16, 2005
(Commission file number 1-14287). (b)
Letter Agreement dated December 1, 2005, by and between USEC Inc. and James R. Mellor,
Chairman of the Board, incorporated by reference to Exhibit 10.91 of the Current Report on
Form 8-K filed on December 6, 2005 (Commission file number 1-14287). (b)
Summary of Compensation Arrangement with James R. Mellor. (a)(b)
Summary of 2006 Annual Performance Objectives for Executive Officers, incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 10, 2006
(Commission file number 1-14287). (b)
USEC Inc. 2006 Supplemental Executive Retirement Plan, effective April 24, 2006,
incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006 (Commission file number 1-14287). (b)
Executive Incentive Plan Summary Plan Description, incorporated by reference to Exhibit
10.1 of the current report on Form 8-K filed on April 28, 2006 (Commission file number
1-14287). (b)
Summary of Employment Arrangement for Chief Financial Officer, incorporated by reference to
Exhibit 10.1 of the Current Report on Form 8-K/A filed on September 11, 2006 (Commission
File Number 1-14287). (b)
Subsidiaries of USEC Inc. (a)
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. (a)
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). (a)
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). (a)
Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (a)
Letter from U.S. Department of State, dated August 23, 2002, in compliance with Rule 0-6 of
the Securities Exchange Act of 1934, incorporated by reference to Exhibit 99.4 of the
Annual Report on Form 10-K for the fiscal year ended June 30, 2002 (Commission file number
1-14287).
Annual CEO Certification dated May 25, 2006, as filed with the New York Stock Exchange. (a)
(a)
Filed herewith
(b)
Management contracts and compensatory plans and arrangements required to be filed as
exhibits pursuant to Item 15(b) of this report.
UNITED STATES DEPARTMENT OF ENERGY
|
||||
BY: | /s/ Samuel W. Bodman | |||
TITLE: Secretary of Energy | ||||
DATE: 12/7/06 | ||||
AND
UNITED STATES ENRICHMENT CORPORATION |
||||
BY: | /s/ John K. Welch | |||
TITLE: President & CEO | ||||
DATE: 12/1/06 | ||||
ARTICLE I DEFINITIONS | 2 | |||||
Section 1.1
|
Terms | 2 | ||||
Section 1.2
|
Headings | 5 | ||||
Section 1.3
|
Rules of Interpretation | 5 | ||||
|
||||||
ARTICLE II AUTHORITY OF THE PARTIES | 5 | |||||
Section 2.1
|
Corporation | 5 | ||||
Section 2.2
|
Department | 5 | ||||
Section 2.3
|
Corporation Board of Directors | 5 | ||||
|
||||||
ARTICLE III GRANT OF LEASE | 6 | |||||
Section 3.1
|
Lease of Real Property | 6 | ||||
Section 3.2
|
Lease of Personal Property | 6 | ||||
Section 3.3
|
Departments Personal Property on the Leased Premises | 6 | ||||
Section 3.4
|
Option to Expand or Reduce Leasehold | 7 | ||||
Section 3.5
|
Option Procedures | 8 | ||||
Section 3.6
|
Quiet Enjoyment | 8 | ||||
Section 3.7
|
Department Option | 8 | ||||
|
||||||
ARTICLE IV LEASED PREMISES AND LEASED PERSONALTY | 9 | |||||
Section 4.1
|
Use of Leased Premises and Leased Personalty | 9 | ||||
Section 4.2
|
Physical Condition of Leased Premises and Leased Personalty | 9 | ||||
Section 4.3
|
Return of Leased Premises and Leased Personalty | 10 | ||||
Section 4.4
|
Turnover Requirements | 10 | ||||
Section 4.5
|
Permissible Changes | 11 | ||||
Section 4.6
|
Decontamination and Decommissioning | 12 | ||||
Section 4.7
|
Permits | 13 | ||||
|
||||||
ARTICLE V ALLOCATION OF LIABILITIES | 13 | |||||
Section 5.1
|
13 | |||||
Section 5.2
|
15 | |||||
Section 5.3
|
15 | |||||
Section 5.4
|
15 | |||||
|
||||||
ARTICLE VI SUPPORT | 16 | |||||
Section 6.1
|
Electric Power Agreement | 16 | ||||
Section 6.2
|
Services Agreement | 16 |
i
|
||||||
ARTICLE VII TERM | 16 | |||||
Section 7.1
|
Initial Term | 16 | ||||
Section 7.2
|
Lease Renewal | 16 | ||||
|
||||||
ARTICLE VIII RENT | 16 | |||||
Section 8.1
|
Lease Payment | 16 | ||||
Section 8.2
|
Rent During Renewal Periods | 18 | ||||
|
||||||
ARTICLE IX INSURANCE AND DAMAGE | 18 | |||||
Section 9.1
|
Corporation Insurance | 18 | ||||
Section 9.2
|
Partial Casualty to the Leased Premises | 18 | ||||
Section 9.3
|
Total Destruction of Leased Premises | 18 | ||||
Section 9.4
|
Partial Casualty to Leased Personalty | 19 | ||||
Section 9.5
|
Total Loss of Leased Personalty | 19 | ||||
Section 9.6
|
Relationship to Indemnification | 20 | ||||
|
||||||
ARTICLE X PRICE-ANDERSON INDEMNIFICATION | 20 | |||||
Section 10.1
|
Price-Anderson Nuclear Hazards Indemnification by the Department | 20 | ||||
|
||||||
ARTICLE XI REPRESENTATIVES | 24 | |||||
Section 11.1
|
Site Representatives | 24 | ||||
|
||||||
ARTICLE XII TERMINATION | 25 | |||||
Section 12.1
|
Termination for Convenience | 25 | ||||
|
||||||
ARTICLE XIII MODIFICATIONS | 25 | |||||
Section 13.1
|
Lease Amendments | 25 | ||||
Section 13.2
|
Lease Modifications for Privatization | 26 | ||||
|
||||||
ARTICLE XIV ASSIGNMENTS AND SUBLEASES | 26 | |||||
Section 14.1
|
No Assignment; Substitution of Department | 26 | ||||
Section 14.2
|
No Assignment; Substitution of Corporation | 26 | ||||
Section 14.3
|
Subleases | 27 | ||||
|
||||||
ARTICLE XV MISCELLANEOUS | 27 | |||||
Section 15.1
|
Entire Lease | 27 | ||||
Section 15.2
|
Notices | 27 | ||||
Section 15.3
|
Severability | 28 | ||||
Section 15.4
|
No Waiver | 28 | ||||
Section 15.5
|
Applicable Law | 28 |
ii
iii
GCEP Lease Exhibits Continued | ||||||
|
||||||
Exhibit I
|
Condition Reports | |||||
Exhibit J
|
Estimate of Costs to Decontaminate and Decommission Commercial Plant | |||||
Exhibit K
|
Capital Improvements | |||||
Exhibit L
|
Shared Site Agreement | |||||
Exhibit M
|
Regulatory Oversight Agreement | |||||
Exhibit N
|
Activities Required by the Corporation for the Department to Achieve Targeted Turnover Dates in Exhibit A |
iv
1
2
3
4
UNITED STATES DEPARTMENT OF ENERGY | ||||||||
|
||||||||
BY: | /s/ Larry W. Clark | |||||||
|
TITLE: | Assistant Manager for Nuclear Fuel Supply | ||||||
DATE: 12/7/06 | ||||||||
|
||||||||
AND | ||||||||
|
||||||||
UNITED STATES ENRICHMENT CORPORATION | ||||||||
|
||||||||
BY: | /s/ Philip G. Sewell | |||||||
|
TITLE: | Senior Vice President | ||||||
DATE: December 1, 2006 |
5
6
1. | Maintenance At DOEs request, perform maintenance on DOE facilities and calibration on DOE systems and equipment. | |
2. | Janitorial Provide janitorial services for DOE facilities. | |
3. | Analytical Laboratories Manage the analytical laboratories and provide analytical services to DOE. | |
*4. | Fire Protection Manage the Fire Protection Program, including emergency medical services, and provide fire protection to DOE facilities. | |
*5. | Plant Protection and Security Program Administration Manage the Protective Forces and Security Program and provide services as requested to protect DOEs security interests. | |
*6. | Emergency Management Manage and provide the emergency management support systems, including emergency facilities and equipment, emergency response organization, emergency operations center, radiation/criticality accident alarm system, meteorological monitoring system, emergency communication systems, emergency notification system, and emergency notification and reporting. | |
*7. | Utilities Provide utility services, including water, steam, air, nitrogen, sewer, natural gas, and electricity/ power operations. | |
*8. | Nuclear Materials Control and Accountability Provide nuclear materials control and accountability functions required for the nuclear materials belonging to DOE that are stored, processed or handled at PAD and PORTS. All program elements shall be administered according to the appropriate DOE Orders. | |
*9. | Computer Services Manage and provide computing services | |
*10. | Telecommunications Provide telecommunications systems support and services. | |
11. | Cylinder Handling Provide inspection, testing, restacking and maintenance of DOE cylinders. | |
12. | Medical Provide medical services for employees. |
7
13. | Stores Maintenance and management of inventories. | |
14. | Environmental Base Air, water, and soil monitoring; studies, tests, and analyses. | |
15. | Safety and Health Health Physics Monitoring, Industrial Hygiene, Radiation Protection, and Safety and Health System. | |
*16. | Records Management Maintenance, processing, transferring, retrieval, and storage. |
17. | a. | Garage Provide repair and maintenance services on DOE vehicles. |
*b. | Garage Repair and maintenance service on radiologically contaminated vehicles/equipment or vehicles/equipment operating in classified or restricted areas/emergency is considered a Captive Service. |
18. | Quality Assurance | |
*19. | Respirator Services Respirator cleaning and fit testing. Service includes cleaning of contaminated and potentially contaminated respirators, including fit testing services in the on-site respirator facility. | |
*20. | Laundry Services | |
*21. | Radio Repair and Calibration Frequency synchronization, operation, and maintenance of radio repeaters and operation of radio relay network. | |
*22. | HEU Surveillance and Maintenance Performance of checks and record pressure on HEU cells, maintenance support of HEU cells; and Uranium Analytical Services for Buffered HEU Cells (Buffer gas sampling and analyses on shutdown HEU cells). | |
23. | Other services if and as agreed to by the Parties. |
8
ARTICLE I
|
DEFINITIONS | App.1-2 | ||
Section 1.1
|
Terms | App.1-2 | ||
Section 1.2
|
Headings | App.1-8 | ||
Section 1.3
|
Rules of Interpretation | App.1-8 | ||
Section 1.4
|
Relationships to Other Agreements | App.1-9 | ||
|
||||
ARTICLE II
|
AUTHORITY OF THE PARTIES | App.1-9 | ||
Section 2.1
|
Corporation | App.1-9 | ||
Section 2.2
|
Department | App.1-9 | ||
|
||||
ARTICLE III
|
GRANT OF LEASE | App.1-10 | ||
Section 3.1
|
Lease of Real Property | App.1-10 | ||
Section 3.2
|
Lease of Personal Property | App.1-11 | ||
Section 3.3
|
Departments Personal Property on the GCEP Leased Premises | App.1-12 | ||
Section 3.4
|
Departments Storage of Materials of Environmental Concern in the GCEP Storage Areas | App.1-14 | ||
Section 3.5
|
Planning for Site Reuse | App.1-16 | ||
Section 3.6
|
Option to Expand Leasehold and No Option to Reduce Leasehold | App.1-17 | ||
Section 3.7
|
Option Procedure | App.1-18 | ||
Section 3.8
|
Termination of Option to Expand | App.1-18 | ||
Section 3.9
|
Quiet Enjoyment | App.1-19 | ||
|
||||
ARTICLE IV
|
GCEP LEASED PREMISES AND GCEP LEASED PERSONALTY | App.1-19 | ||
Section 4.1
|
Use of GCEP Leased Premises and GCEP Leased Personalty | App.1-19 | ||
Section 4.2
|
Physical Condition of GCEP Leased Premises and GCEP Leased | |||
|
Personalty | App.1-19 | ||
Section 4.3
|
Return of GCEP Leased Premises and GCEP Leased Personalty | App.1-21 | ||
Section 4.4
|
Turnover Requirements | App.1-26 | ||
Section 4.5
|
Permissible Changes | App.1-29 | ||
Section 4.6
|
Decontamination and Decommissioning and Turnover Costs | App.1-32 | ||
Section 4.7
|
Permits | App.1-32 | ||
|
||||
ARTICLE V
|
ALLOCATION OF LIABILITIES (THIRD-PARTY CLAIMS) | App.1-33 | ||
Section 5.1
|
Department Disclaimer | App.1-33 | ||
Section 5.2
|
Indemnfication by the Corporation | App.1-33 | ||
Section 5.3
|
Responsibilities of the Department | App.1-34 | ||
Section 5.4
|
Notice and Disputes | App.1-34 | ||
|
||||
ARTICLE VI
|
SUPPORT | App.1-35 | ||
Section 6.1
|
Services Agreement | App.1-35 | ||
Section 6.2
|
Utilities | App.1-35 | ||
Section 6.3
|
Regulatory Oversight Agreement | App.1-35 |
-i-
ARTICLE VII
|
TERM | App.1-36 | ||
Section 7.1
|
Initial Term | App.1-36 | ||
Section 7.2
|
GCEP Lease Renewal | App.1-36 | ||
|
||||
ARTICLE VIII
|
RENT | App.1-38 | ||
Section 8.1
|
GCEP Lease Payment | App.1-38 | ||
Section 8.2
|
Rent During Renewal Periods | App.1-40 | ||
|
||||
ARTICLE IX
|
INSURANCE AND DAMAGE | App.1-40 | ||
Section 9.1
|
Corporation Insurance | App.1-40 | ||
Section 9.2
|
Partial Casualty to the GCEP Leased Premises | App.1-41 | ||
Section 9.3
|
Total Destruction of GCEP Leased Premises | App.1-41 | ||
Section 9.4
|
Repairable Casualty to GCEP Leased Personalty | App.1-42 | ||
Section 9.5
|
Lost or Destroyed GCEP Leased Personalty | App.1-42 | ||
Section 9.6
|
No Duty to Repair or Rebuild by the Department | App.1-43 | ||
|
||||
ARTICLE X
|
PRICE-ANDERSON INDEMNIFICATION | App.1-43 | ||
Section 10.1
|
Price-Anderson Nuclear Hazards Indemnification by the Department | App.1-43 | ||
|
||||
ARTICLE XI
|
REPRESENTATIVES | App.1-48 | ||
Section 11.1
|
Authorized Representatives | App.1-48 | ||
|
||||
ARTICLE XII
|
TERMINATION | App.1-48 | ||
Section 12.1
|
Termination for Convenience | App.1-48 | ||
Section 12.2
|
Termination by the Department | App.1-48 | ||
Section 12.3
|
Action Upon Termination | App.1-50 | ||
Section 12.4
|
Force Majeure | App.1-50 | ||
|
||||
ARTICLE XIII
|
MODIFICATIONS | App.1-52 | ||
Section 13.1
|
GCEP Lease Amendments | App.1-52 | ||
|
||||
ARTICLE XIV
|
ASSIGNMENTS AND SUBLEASES | App.1-52 | ||
Section 14.1
|
No Assignment; Substitution of Department | App.1-52 | ||
Section 14.2
|
No Assignment; Substitution of Corporation | App.1-52 | ||
Section 14.3
|
Subleases | App.1-55 | ||
|
||||
ARTICLE XV
|
MISCELLANEOUS | App.1-56 | ||
Section 15.1
|
Entire GCEP Lease | App.1-56 | ||
Section 15.2
|
Notices | App.1-56 | ||
Section 15.3
|
Severability | App.1-57 | ||
Section 15.4
|
No Waiver | App.1-57 | ||
Section 15.5
|
Applicable Law | App.1-58 | ||
Section 15.6
|
Binding Nature of GCEP Lease | App.1-58 | ||
Section 15.7
|
GCEP Lease Not Joint Venture | App.1-58 |
-ii-
Section 15.8
|
Further Assistance | App.1-58 | ||
Section 15.9
|
Property Records and Other Information | App.1-58 | ||
Section 15.10
|
Survival | App.1-59 | ||
Section 15.11
|
No Rights in Others | App.1-59 | ||
Section 15.12
|
Departments Payment Obligations | App.1-60 | ||
Section 15.13
|
Corporations Payment Obligation | App.1-60 | ||
Section15. 14
|
Environment | App.1-60 | ||
Section 15.15
|
Disputes | App.1-61 | ||
Section 15.16
|
Transfer of Title to the Corporation | App.1-61 | ||
Section 15.17
|
Conditions of Privileges Granted by the Department | App.1-61 | ||
Section 15.18
|
Hazardous and/or Radiological Material of Environmental Concern | App.1-61 | ||
Section 15.19
|
Cultural Items | App.1-62 | ||
Section 15.20
|
Laws, Ordinances, Regulations | App.1-63 | ||
Section 15.21
|
Security | App.1-63 | ||
Section 15.22
|
Classification | App.1-65 | ||
Section 15.23
|
Unclassified Controlled Nuclear Information/Export Controlled
Information |
App.1-66 | ||
Section 15.24
|
Regulatory Oversight of Sections 15.23 15.25 | App.1-66 | ||
Section 15.25
|
Environmental Impact Statement | App.1-66 | ||
Section 15.26
|
Notice of Hazardous Substances | App.1-67 | ||
Section 15.27
|
Continuation After Termination of the GDP Lease | App.1-67 | ||
|
||||
LIST OF EXHIBITS | ||||
Exhibit A
|
GCEP Leased Premises | |||
Exhibit B
|
GCEP Leased Personalty | |||
Exhibit C
|
June 17 th Agreement | |||
Exhibit D
|
Nonexclusive Easements and Rights-of-Way | |||
Exhibit E-1
|
Map of Departments Personal Property | |||
Exhibit E-2
|
Listing of Departments Personal Property | |||
Exhibit F
|
Released Facilities and Equipment List | |||
Exhibit G
|
Notice of Hazardous Substances | |||
Exhibit H
|
GCEP Leased Facilities | |||
Exhibit I
|
Condition Reports | |||
Exhibit J
|
Estimate of Costs to Decontaminate and Decommission Commercial Plant | |||
Exhibit K
|
Capital Improvements | |||
Exhibit L
|
Shared Site Agreement | |||
Exhibit M
|
Regulatory Oversight Agreement | |||
Exhibit N
|
Activities Required by the Corporation for the Department to Achieve | |||
|
Targeted Turnover Dates in Exhibit A |
-iii-
App. 1-1
App. 1-2
App. 1-3
App. 1-4
App. 1-5
App. 1-6
App. 1-7
App. 1-8
App. 1-9
App. 1-10
App. 1-11
App. 1-12
App. 1-13
App. 1-14
App. 1-15
App. 1-16
App. 1-17
App. 1-18
App. 1-19
App. 1-20
App. 1-21
App. 1-22
App. 1-23
App. 1-24
App. 1-25
App. 1-26
App. 1-27
App. 1-28
App. 1-29
App. 1-30
App. 1-31
App. 1-32
App. 1-33
App. 1-34
App. 1-35
App. 1-36
App. 1-37
App. 1-38
App. 1-39
App. 1-40
App. 1-41
App. 1-42
1. | Negligence; | ||
2. | Contributory negligence; | ||
3. | Assumption of risk; or | ||
4. | Unforeseen intervening causes, whether involving the conduct of a third person or an act of God; |
App. 1-43
App. 1-44
App. 1-45
App. 1-46
App. 1-47
App. 1-48
App. 1-49
(i) | Lease, contract, and work authorization number and type; | ||
(ii) | Name and address of the Departments representative for each lease, contract, and work authorization; | ||
(iii) | Total dollar value, as amended; and | ||
(iv) | Approximate remaining unpaid balance |
App. 1-50
(1) | The Successor in Interest holds an appropriate Facility Clearance and a favorable Foreign Ownership, Control, or Influence Determination; | ||
(2) | The Successor in Interest assumes all the Corporations obligations under the GCEP Lease; |
App. 1-51
(3) | The Corporation waives all rights under the GCEP Lease against the Government; | ||
(4) | The Corporation guarantees performance of the GCEP Lease by the Successor in Interest; and | ||
(5) | Nothing in the novation agreement shall relieve the Corporation or Successor in Interest from compliance with any Laws and Regulations. |
App. 1-52
App. 1-53
For the Department: |
Mr. Larry Clark, Assistant Manager for Nuclear Fuel Supply
Department of Energy Oak Ridge Office P.O. Box 2001 Oak Ridge, TN 37831 Fax: (865) 241-4439 |
For the Corporation: |
Mr. Vic Lopiano, Vice-President American Centrifuge
USEC Inc. 6903 Rockledge Drive Bethesda, MD 20817 FAX: (301) 564-3205 |
App. 1-54
(a) | Lease number | ||
(b) | Asset type | ||
(c) | Description of item such as name, serial number, and other identifying information | ||
(d) |
Property control number, i.e., barcode number
|
||
(e) | Unit acquisition cost and unit of measure (estimate if actual is not available) | ||
(f) | Acquisition document reference and date (optional) | ||
(g) | Manufacturers name, model and serial number | ||
(h) | Quantity received or fabricated | ||
(i) | Location (site, building or area number) | ||
(j) | Custodial name and organization code or Corporation custodian |
App. 1-55
for the property (can be single point of contact) |
(k) |
Use status (active, storage, excess, etc.)
|
||
(l) | High risk designation (See, 41 CFR 109-1.53, Management of High Risk Personal Property) | ||
(m) | Disposition document |
App. 1-56
App. 1-57
App. 1-58
App. 1-59
App. 1-60
App. 1-61
App. 1-62
App. 1-63
App. 1-64
UNITED STATES DEPARTMENT OF ENERGY
|
||||
BY: | /s/ Samuel W. Bodman | |||
TITLE: Secretary of Energy | ||||
DATE: 12/7/06 | ||||
AND |
UNITED STATES ENRICHMENT CORPORATION | ||||
BY: | /s/ John K. Welch | |||
TITLE: President & CEO | ||||
DATE: 12/1/06 | ||||
App. 1-65
1 of 3
2 of 3
3 of 3
The following exhibit
contains export controlled or official use only information and has
been omitted pursuant to a request for confidential treatment.
The following exhibit
contains export controlled or official use only information and has
been omitted pursuant to a request for confidential treatment.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
1
2
3
4
The following exhibit
contains export controlled or official use only information and has
been omitted pursuant to a request for confidential treatment.
1
2
3
1 of 1
The following exhibit
contains export controlled or official use only information and has
been omitted pursuant to a request for confidential treatment.
1 of 5
2 of 5
3 of 5
4 of 5
5 of 5
-1-
-2-
-3-
-4-
-5-
-6-
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
2
3
4
1
2
3
GCEP
TARGETED
LEASE
LEASE
EFFECTIVE
FACILITY
DESCRIPTION
DATE*
DATE
Evacuation Public Address System
01/07
Power Public Address Systems
01/07
Public Warning Siren System
01/07
Cylinder Storage Yard
01/07
Cylinder Storage Yard
01/07
Security Access Control and Alarm System
01/07
Liquid Effluent System
01/07
Interconnecting Process Piping Area
01/07
Office Building
12/06
IAEA Trailer
05/05
GCEP
LEASE
EXECUTION
Process Building
04/04
GCEP
LEASE
EXECUTION
Process Building (South Half)
09/06
Process Building (North Half)
03/07
Process Support Building
05/04
GCEP
LEASE
EXECUTION
Feed and Customer Services Building
01/07
Feed and Product Shipping and Receiving Building
Area
01/07
Product and Tails Withdrawal Building Area
01/07
GCEP Cooling Tower Water Pump House
01/07
Cooling Tower
01/07
Valve House
01/07
Boiler System
03/07
Oil Storage Facility
03/07
Maintenance, Stores and Training Building
01/07
Container Wash, Container Dry, Rotor Balance,
4
th
Floor Control Room
01/05
GCEP
LEASE
EXECUTION
Buffer Storage and 5th Floor
11/04
GCEP
LEASE
EXECUTION
Part of 4
th
Floor
01/05
GCEP
LEASE
EXECUTION
THE CORPORATION
GCEP
TARGETED
LEASE
LEASE
EFFECTIVE
FACILITY
DESCRIPTION
DATE*
DATE
Portions of 2
nd
, 3
rd
, 4
th
Floors
01/05
GCEP
LEASE
EXECUTION
Recycle/Assembly Facility 2
nd
Floor Office Areas
10/05
GCEP
LEASE
EXECUTION
Recycle/Assembly Facility 3
rd
Floor Office Areas and
Fourth Floor Mechanical Room
02/06
GCEP
LEASE
EXECUTION
Recycle/Assembly Facility 1
st
, 2
nd
,
3
rd
, 4
th
, 5
th
Floors (Remainder
of Facility)
7/07
Waste Accountability Facility
12/06
Chemical Storage Building Area
01/07
Centrifuge Training and Test Facility (First Floor)
06/04
GCEP
LEASE
EXECUTION
Centrifuge Training and Test Facility 2
nd
Floor Office
Areas
01/05
GCEP
LEASE
EXECUTION
Centrifuge Training and Test Facility 3
rd
Floor Office
Areas
12/04
GCEP
LEASE
EXECUTION
Centrifuge Training and Test Facility (Remainder of Facility,
except for gas test stand area)
07/05
GCEP
LEASE
EXECUTION
Centrifuge Training and Test Facility Gas Test Stand Area
07/07
Interplant Transfer Corridor
04/04
GCEP
LEASE
EXECUTION
Recycle/Assembly Storage Yard
01/07
Area South of X-3001/X-3002
01/07
Cylinder Storage Yard Area
01/07
Cylinder Storage Yard Area
01/07
Cylinder Storage Yard Area
01/07
Cylinder Storage Yard Area
01/07
Rubb Bldg at X-7725
01/07
Rubb Bldg at X-3346
01/07
Triangular area about 3 acres Northwest of X-7721, West of
X-2207D, Southeast of Construction Road and West of Truck Access
Road
01/07
THE CORPORATION
GCEP
TARGETED
LEASE
LEASE
EFFECTIVE
FACILITY
DESCRIPTION
DATE*
DATE
Area North of X-2207E Parking Lot
01/07
Approximately 2.8 acres bounded by
construction by Construction Road, West by
Perimeter Road, North by drainage ditch
and area is directly South of X-6614E.
01/07
Grassy/Unimproved areas outlined on
drawing DX-CL-1222-A rev. 0, noted as
Common Areas
01/07
Grassy/Unimproved areas outlined on
drawing DX-CL-1222-A rev. 0, noted as
Common Areas
03/07
Roads as identified on drawing
DX-CL-1222-A rev 0., noted as Common Areas
01/07
Center Aisle Ways in X-3001, X-3002,
X-3012 and X-7725 as depicted on drawing
DX-LS-1214-A. (These areas will remain
Common Areas so long as the Department is
conducting activities in the X-7725 and
X-3002)
GCEP
Lease
Execution
*
Targeted Lease Date The Targeted Lease Date represents the parties best current estimate
of facility availability. The parties agree to seek establishment of an agreed upon date
within the month indicated when the facility, system, or area will be leased to the
Corporation, absent unforeseen intervening events and subject to the availability of funding
as described in Section 15.12, compliance with clearance requirements, and any additional
requirements indicated by a double, triple, or quadruple asterisk. In the event that either
Party determines that the Targeted Lease Date is not feasible for either Party, the Parties
agree, no later than 90 days prior to a Targeted Lease Date, to seek agreement upon a revised
Targeted Lease Date or an acceptable GCEP Lease Effective Date.
**
Lease of the X-3000 by 12/06 is contingent upon completion by the Corporation of the terms
set forth in Exhibit N.
***
Lease of the X-3002 is contingent upon completion by the Corporation of the terms set
forth in Exhibit N.
****
Lease of the RCRA permitted storage area in the X-7725 in 7/07 is contingent upon
sufficient appropriated funds being made available for such purpose (based upon the
Departments normal practices in fiscal administration and execution of appropriated budgets)
and the availability of the X-720. Since the Corporation has requested the Department to treat
the Corporations troublesome wastes, the Targeted Lease Date will be extended as necessary to
accommodate the treatment of the Corporations wastes.
LEASE MAP PER EXHIBIT A, REV. 0
[MAP CONTAINS EXPORT CONTROLLED INFORMATION,
PLEASE PROTECT APPROPRIATELY]
GCEP LEASED PERSONALTY
Revision 0
AGREEMENT BETWEEN
U.S. DEPARTMENT OF ENERGY (DOE) AND USEC INC. (USEC)
(June 17, 2002 Agreement)
THE U.S. DEPARTMENT OF ENERGY (DOE)
AND
USEC INC. (USEC)
Article 1
:
Ensure continued removal of Russian weapons-origin
highly-enriched uranium (HEU) under the US-Russia HEU Purchase
Agreement (US-Russia HEU Agreement).
Each year USEC remains the sole Executive Agent (EA) for the United States under the US-Russia HEU Agreement, USEC must order, and
take delivery of, if made available by the Russian Executive Agent, LEU derived from at least 30 metric tons per year
weapons-origin HEU, subject to instructions to USEC under the US-Russia HEU Agreement and the Executive Agent Memorandum of
Agreement (MOA) by the United States Government (USG).
If USEC satisfactorily performs the above-referenced obligation and all other of its obligations under this Agreement and the
US-Russia HEU Agreement, DOE agrees to recommend against the removal, in whole or in part, of USEC as EA under the US-Russia HEU
Agreement.
If USEC fails to meet this obligation, DOE may terminate this Agreement and be released from DOEs obligations under this Agreement.
USG retains its rights to remove and replace USEC as EA or to designate additional EAs under the MOA.
Article 2
:
Ensure the stability of existing domestic enrichment
capabilities, including operations at the Portsmouth Gaseous
Diffusion Plant (GDP) site and continued operation of the
Paducah GDP at or above 3.5 MM SWU per year until new,
cost-effective advanced enrichment technology is deployed
commercially in the U.S.
USEC will maintain leased real and personal property at the Portsmouth
GDP site (other than the property subject to the cold standby
contract) in a condition that will permit its consideration as a
candidate site for USECs deployment of advanced uranium enrichment
technology.
USEC will not unreasonably withhold its agreement for DOE to allow
private entities access to and utilize non-leased real and personal
property at DOEs Portsmouth GDP site for activities not associated
with enrichment of uranium so long as any such use will not have a
material adverse impact on USECs advanced enrichment technology
program.
As further described in Article 4 of this Agreement, USEC agrees to
operate the Shipping and Transfer (S/T) facilities for 15 months
following the execution of this Agreement to remove the contaminants
from a portion of its Affected Inventory to meet ASTM C-787-90 or
produce material acceptable to USEC for use as feed material in its
enrichment facility.
If USEC fails to maintain leased real and personal property at the
Portsmouth GDP site other than the property subject to the cold
standby contract in a condition that will permit its consideration as
a candidate site for USECs deployment of advanced uranium enrichment
technology or fails to operate the S/T facilities for 15 months as
described above, USEC agrees to waive any statutory exclusive right it
may have to lease the Portsmouth GDP under section 3107(b) of the
Privatization Act
(
and the implementing lease provisions) and USEC
agrees to waive its rights under Section 3.4(a) and (c) of the lease
to include Portsmouth GDP real and personal property in its leasehold
before DOE disposes of such property. (In taking any actions as a
result of the preceding waivers, DOE agrees that the authorized
actions for failure to maintain Portsmouth in a condition that will
permit its consideration as a candidate site for deployment of
advanced enrichment technology or failure to operate the S/T
facilities for 15 months do not include transitioning USEC from its
operation of the Paducah enrichment facilities as is provided for in
the event USEC ceases enrichment operations at Paducah as defined in
this Agreement unless there has been a determination that USEC has
ceased enrichment operations at Paducah pursuant to that portion of
the Agreement.) If USEC fails to maintain leased real and personal
property at Portsmouth other than the property subject to the cold
standby contract in a condition that will permit its consideration as
a candidate site for USECs deployment of advanced enrichment
technology or fails to operate the S/T for 15 months as described
above, as the case may be, DOE also may terminate this Agreement and
be released from its obligations under it.
If USEC plans not to maintain leased real and personal property at
Portsmouth other than the property subject to the cold standby
contract in a condition that will permit its consideration as a
candidate site for USECs deployment of advanced uranium enrichment
technology or fails to operate the S/T for 15 months as described
above, as the case may be, USEC must provide notice to DOE. If DOE
believes that USEC is not maintaining leased real and personal
property at Portsmouth other than the property subject to the cold
standby contract in a condition that will permit its consideration as
a candidate site for the deployment of advanced enrichment technology
or that USEC has failed to operate the S/T for 15 months as described
above, as the case may be, DOE will notify USEC of that belief. In
either event, USEC will have an opportunity (within thirty (30) days)
to provide its position regarding USECs compliance with its
obligation to maintain leased real and personal property at Portsmouth
other than the property subject to the cold standby contract in a
condition that will permit its consideration as a candidate site for
the deployment of advanced enrichment technology or to operate the S/T
for 15 months as described above, as the case may be, to DOEs
Director of Nuclear Energy, Science and Technology (NE).
Within sixty (60) days of USECs submission to DOE, NE will determine
whether USEC is in compliance with the obligation to maintain leased
real and personal property at Portsmouth other than the property
subject to the cold standby contract in a condition that will permit
its consideration as a candidate site for USECs deployment of
advanced enrichment technology, or to operate the S/T for 15 months as
described above, as the case may be, and what action, if any DOE will
take. USEC may appeal this determination within thirty (30) days to
the Secretary of Energy (or designee), whose determination will be
considered to be a final agency action under this Agreement. USEC
retains all remedies available to it under the Administrative
Procedure Act to challenge the decision of the Secretary (or
designee).
USEC shall operate the Paducah GDP at a level at or above 3.5 MM SWU
per year as measured each year of USECs fiscal year (July 1 to June
30). USEC may not reduce this production level until six months before
USEC has the permanent addition of 3.5 MM SWU per year of new capacity
installed based on advanced enrichment technology. In the event USEC
does not expand its 1 MM SWU commercial plant to a capacity of 3.5 MM
SWU per year, USEC shall continue to maintain SWU production at the
Paducah GDP at a level at or above 3.5 MM SWU per year as measured
each year of USECs fiscal year (July 1 to June 30).
USEC will not unreasonably withhold its agreement for DOE to allow
private entities access to and utilize the non-leased real or personal
property at DOEs Paducah GDP site
for activities not associated with enrichment of uranium so long as
any such use will not have a material adverse impact on USECs GDP
operations, USECs deployment of advanced enrichment technology, or
USECs compliance with the NRC Part 76 Certificate at the Paducah GDP
site.
If USEC fails to operate the Paducah GDP at a level at or above an
annual rate of 3.5 MM SWU per year as measured each year of USECs
fiscal year (July 1 to June 30) before USEC is within six months of
having installed the permanent addition of 3.5 MM SWU per year of new
capacity based on advanced enrichment technology (hereinafter USEC
Paducah GDP production deficiency period), USEC will have one
opportunity in each five-year or six-year lease term to cure this
deficiency in the immediately succeeding USEC fiscal year. If USEC
repeats a Paducah GDP production deficiency period in the immediately
succeeding USEC fiscal year or in any fiscal year thereafter in the
same five-year or six-year lease term, USEC agrees to waive its
statutory exclusive right to lease the GDPs under section 3107(b) of
the Privatization Act (and the implementing lease provisions) and USEC
agrees to waive its rights under Section 3.4(a) and (c) of the lease
to include GDP real and personal property in its leasehold before DOE
disposes of such property.
(
In taking any actions as a result of the
preceding waivers, DOE agrees that the authorized actions for failure
to operate the Paducah GDP at or above 3.5 MM SWU per year do not
include transitioning USEC from its operation of the Paducah
enrichment facilities as is provided for in the event USEC ceases
enrichment operations at Paducah as defined in this Agreement unless
there has been a determination that USEC has ceased enrichment
operations at Paducah pursuant to that portion of the Agreement.) In
the event of a USEC Paducah GDP production deficiency period (after
one unsuccessful cure period in the same five-year or six-year lease
term), DOE also may terminate this Agreement and be released from its
obligations under it.
In the event a USEC Paducah production deficiency period falls in the
last year of the lease term and USEC certifies to DOE that it will
attempt to cure the deficiency by increasing Paducah GDP production to
achieve the 3.5 MM SWU per year level, DOE will extend the lease one
additional year (with an additional one-year option period,
exercisable in the sole discretion of DOE). The preceding sentence
affects only the lease term, and does not directly or indirectly
affect any other portion of the lease, including Section 4.4 Turnover
Requirements ; provided, however, in the event the USEC Paducah
production deficiency is cured in the extended one year lease period,
the normal lease renewal procedures will be reinstituted thereafter.
USEC will provide quarterly historical production and annual projected
production reports to DOE to enable DOE to monitor Paducah operational
levels. USEC also shall
provide DOE advance notice at least 120 days before implementation of
any plant closing or mass layoff as those terms are defined in 29
U.S.C. 2101 (a)(2) and (3), respectively.
If USEC is not within six months of having installed the permanent
addition of 3.5 MM SWU per year of new capacity based on advanced
enrichment technology and the Paducah GDP will or does fall below an
operational level of 3.5 MM SWU per year, USEC must provide notice to
DOE. If DOE believes that the Paducah GDP has or will fall below an
operational level of 3.5 MM SWU per year, it will notify USEC of that
belief. In either event, USEC will have an opportunity (within thirty
(30) days) to provide its position regarding USECs compliance with
its obligation to operate the Paducah GDP at or above 3.5 MM SWU per
year to DOEs Director of Nuclear Energy, Science and Technology (NE).
Within sixty (60) days of USECs submission to DOE, NE will determine
whether USEC is in compliance with the 3.5 MM SWU per year commitment
and what action, if any DOE will take. USEC may appeal this
determination within thirty (30) days to the Secretary of Energy (or
designee), whose determination will be considered to be a final agency
action under this Agreement. USEC retains all remedies available to it
under the Administrative Procedure Act to challenge the decision of
the Secretary (or designee).
If USEC believes that the domestic enrichment market is otherwise
stable and viable but that a significant change has taken place in the
domestic or international enrichment markets such that continued
operation of the Paducah GDP at or above 3.5 MM SWU per year is
commercially impracticable, it may present its position to DOE. No
amendment to this Agreement is effective without the written agreement
of both Parties.
If USEC ceases enrichment operations at the Paducah GDP(as defined
below) or loses its NRC certificate for operating the Paducah GDP
prior to six months before USEC has the permanent addition of 3.5 MM
SWU per year of new capacity installed based on advanced enrichment
technology, DOE, directly or through contract, may take actions it
deems necessary to transition operation of the Paducah GDP site from
USEC operation to ensure the continuity of domestic enrichment
operations and the fulfillment of supply contracts. USEC shall
promptly inform DOE in advance in the event it is planning to cease
operations at the Paducah GDP or has advance knowledge that it will
lose its NRC certificate for operating the Paducah GDP.
The term ceases enrichment operations at the Paducah GDP means: (i)
a determination by USEC to stop the production of enriched uranium at
the Paducah GDP; (ii) USEC does not produce enriched uranium at the
Paducah GDP at a 1MM SWU per year level
for any consecutive 12-month period following execution of this
Agreement; or (iii) USEC is not taking actions appropriate to
maintaining the ability of the Paducah GDP to operate at an annualized
rate of 5.5 MM SWU per year.
The Parties agree that the actions appropriate to maintaining the
ability of the Paducah GDP to operate at an annualized rate of 5.5 MM
SWU per year means the Paducah GDP enrichment cascade will be
maintained such that at least 150 cells at all times must either be
operating, in standby, undergoing maintenance, or on a maintenance
schedule (i.e., the cells have not been abandoned ) to be capable of
supporting, within an 8-month period, a ramp-up to produce at an
annualized rate of 5.5 MM SWU per year, with
a
product assay of up
to 4.95 percent at 0.3 percent tails. USEC shall maintain dry air
buffering on all cells not utilized for uranium enrichment operations
that are capable of being buffered (i.e., cells not in operation, in
standby, or undergoing maintenance). USEC shall not discontinue such
cell buffering on any cell capable of being buffered (i.e., abandon)
without providing DOE at least 180 days advance written notice
(except in an emergency situation) and provide DOE with the
opportunity to protect the barrier at the Paducah GDP site of any cell
proposed by USEC for abandonment. In the event of an emergency
situation preventing 180 days advance notice, USEC shall provide
written notice to DOE as soon as reasonably possible after the
emergency situation is under control. If DOE commences to protect the
barrier of any cell proposed for abandonment, then that cell and
related cell equipment shall be deleted from the USEC leasehold and no
longer available to USEC for future use in its enrichment operations
without the agreement of DOE and reimbursement to DOE for the costs
incurred in protecting the barrier. USEC will provide to DOE quarterly
reports regarding cell operation to include the number of cells that
have been abandoned and the number of cells that are in operation, in
standby, undergoing maintenance or on a maintenance schedule, and such
other information that DOE may reasonably request to monitor USECs
performance under this provision.
To transition operation of the Paducah GDP site from USEC operation
to ensure the continuity of domestic enrichment operations and the
fulfillment of supply contracts, means USEC agrees that DOE may
designate an alternate operator, may terminate all or a portion of the
GDP leasehold, and/or require the return of the leased facilities in
good and operable condition. USEC also agrees to waive any lease
provisions that would interfere with DOEs ability to step onto the
Paducah GDP site for these purposes and agrees not to oppose
legislation required to permit DOEs implementation of this provision
(e.g., to amend section 3112 of the Privatization Act to authorize DOE
to provide enrichment services). In the event DOE transitions
operations of Paducah from USEC, DOE may terminate this Agreement and
be released of its obligations under it.
In the event USEC ceases enrichment operations at the Paducah GDP (as
that phrase is defined), or in the event USEC loses its NRC
certificate for operating the Paducah GDP, the transition of Paducah
operation will commence promptly upon DOEs request and
USEC agrees to waive its statutory exclusive right to lease the GDPs under
section 3107(b) of the Privatization Act (and the implementing lease
provisions) and its rights under Section 3.4(a) and (c) of the lease to include
GDP real and personal property in its leasehold before DOE disposes of such
property. The foregoing transition will not occur if the period at which USEC
ceases enrichment operations at the Paducah GDP (as that phrase is defined), or
USEC loses its NRC certificate for operating the Paducah GDP is within six
months of USECs having installed the permanent addition of 3.5 MM SWU per year
of new capacity based on advanced enrichment technology . In the event the
parties cannot agree on whether USEC has ceased enrichment operations at the
Paducah GDP (as that phrased is defined), USEC will have an opportunity (within
thirty (30) days) to provide its position regarding whether USEC has ceased
enrichment operations to NE.
Within sixty (60) days of USECs submission to DOE, NE will determine whether
USEC has ceased enrichment operations at the Paducah GDP and what action, if
any, DOE will take. USEC may appeal this determination within thirty (30) days
to the Secretary of Energy (or designee), whose determination will be
considered to be the final agency action under this Agreement. USEC retains all
remedies available to it under the Administrative Procedure Act to challenge
the decision of the Secretary (or designee).
Article 3
:
Facilitate the deployment of new, cost-effective advanced enrichment technology in the U.S. on a rapid schedule.
USEC must begin commercial operations of a plant using advanced enrichment technology
and with capacity of 1.0 MM SWU per year (expandable to 3.5 MM SWU per year) pursuant
to the Milestones described below at the Portsmouth GDP site or the Paducah GDP site.
Site selection and operation will be subject to all applicable federal, state and
local laws and regulations, including the National Environmental Policy Act, if
applicable.
To ensure the rapid deployment of advanced enrichment technology capacity pursuant to
the Milestones set out below, DOE will not dispose of any real or personal property at
a GDP site that may be useable for USECs deployment of advanced enrichment
technology, without first offering USEC the opportunity to include the property within
its lease.
The advanced technology demonstration and deployment milestones for this Agreement are:
USEC begins refurbishment of K-1600 facility
USEC builds and begins testing a centrifuge end cap.
Submit License Application for Lead Cascade to NRC (sited at either Paducah or Portsmouth)
NRC dockets Lead Cascade Application
First rotor tube manufactured
Centrifuge testing begins
Submit License Application to NRC for Commercial Plant (sited at either Paducah or Portsmouth)
NRC dockets Commercial Plant application
Begin Lead Cascade centrifuge manufacturing
Satisfactory reliability and performance data obtained from Lead Cascade operations
Financing commitment secured for a 1 MM SWU Centrifuge Plant
Begin commercial plant construction/refurbishment
Begin Portsmouth commercial plant operations, or
Begin Paducah commercial plant operations
Portsmouth Centrifuge Plant annual capacity at 1 million SWU per year, or
Paducah Centrifuge Plant annual capacity at 1 million SWU per year
Portsmouth Centrifuge Plant (if expanded at USECs option) projected to have an annual capacity at 3.5 million SWU per year,
Paducah Centrifuge Plant (if expanded at USECs option) projected to have an annual capacity at 3.5 million SWU per year.
Prior to making a decision, public announcement, or NRC license
submittal regarding the siting of either the Lead Cascade or the
Commercial Plant, as referenced above, at the Portsmouth GDP site or
the Paducah GDP site, USEC will consult with and coordinate with DOE.
USEC shall prepare and submit to DOE an Advanced Enrichment Deployment
Plan (the Plan) in phases as described below. The Plan shall include
a detailed description of each milestone listed above and make
specific reference to the actions USEC believes are required to be
taken by DOE in order to attain each milestone. Unless otherwise
expressly agreed by DOE, all activities related to the development and
execution of the Plan will be funded by USEC, except those that,
absent the Plan, would have been DOEs responsibility (e.g.,
pre-privatization facility D&D). Each phase of the Plan will be
submitted to a Technical Coordinating Deployment Working Group (the
Deployment Working Group) to be made up of DOE and USEC
representatives. Except as provided below with respect to the Phase I
Plan, within 45 days of the submission by USEC of each phase of the
Plan, DOE shall respond in writing as to DOEs ability to meet the
actions requested of DOE as outlined in USECs Plan. During this
forty-five day period it is expected that there will be a dialogue
between USEC and DOE to arrive at a consensus for the timing of USEC
and DOE site-specific activities resulting in an agreed-upon
Deployment Working Group Plan
(
DWG Plan
)
that will be used by
the Deployment Working Group to monitor milestone progress and act as
a benchmark for coordinating DOE site-specific activities.
USEC shall submit its Phase I Plan covering the milestones relating to
the first twelve months after execution of this Agreement to DOE no
later than June 30, 2002 and the Deployment Working Group shall reach
agreement on Phase I of DWG Plan no later than July 31, 2002. USEC
shall submit its Phase II Plan covering the milestones through the end
of 2004 by September 30, 2002, its Phase III Plan covering the
milestones through the end of 2006 by November 30, 2002 and its Phase
IV Plan covering the milestones through September 2012 by January 31,
2003. The Deployment Working Group will meet periodically to consider
amendments to each of these Plans as required to take account of
changing circumstances, more complete information and the procedures
and remedies outlined below.
The Deployment Working Group will monitor USECs advanced enrichment
deployment activities (including demonstration activities), USECs
milestone progress, and coordinate DOE site-specific activities. USEC
will provide DOE access to such supporting documentation, including
progress towards meeting milestone dates, as may be needed regarding
the deployment of advanced technology, including USECs business plan
for advanced enrichment technology.
If DOE believes that USEC has not met a milestone set out in this
Agreement, it will provide notice of that belief to USEC. If USEC is
aware that it has missed, or will miss, a milestone, USEC will so
notify DOE along with an explanation of the reasons for missing the
milestone. In either case, USEC will have an opportunity to present to
NE its position regarding compliance with the milestone date(s) and
its position on whether a delay in meeting the milestone has a
material impact on USECs ability to begin commercial operations at
the new plant on schedule, whether (and how) the delay can be cured,
and whether USECs delay in meeting the milestone was beyond USECs
control and without its fault or negligence. NE (within 60 days) will
determine whether USEC is in compliance with the required milestone
and whether a delay in meeting the milestone has a material impact on
USECs ability to begin commercial operations at the new plant on
schedule.
If NE determines that a milestone has not been met and that a delay in
meeting the milestone has a material impact on USECs ability to begin
commercial operations at the new plant on schedule, NE will determine
whether the delay was beyond the control and without the fault or
negligence of USEC, and what, if any, action under the Agreement
should be taken by DOE. NEs determination can be appealed by USEC
within 30 days to the Secretary of Energy (or designee), whose
determination shall be considered to be the final agency action under
this Agreement. USEC retains all remedies available to it under the
Administrative Procedure Act to challenge the decision of the
Secretary (or designee).
Until such time as USEC has secured (and demonstrated to DOE) firm
financing commitment(s) for the construction of a 1 MM SWU annual
capacity advanced enrichment technology commercial plant and has begun
construction of such plant, if USEC fails to meet a milestone and it
is determined that a delay in meeting the milestone has a material
impact on USECs ability to begin commercial operations at the new
plant on schedule and that the cause of the delay was beyond the
control and without the fault or negligence of USEC, DOE and USEC will
jointly agree to adjust the milestones as appropriate to accommodate
the delaying event.
If USEC fails to meet a milestone and it is determined that a delay in
meeting the milestone has a material impact on USECs ability to begin
commercial operations at the new plant on schedule and that the cause
of the delay was not beyond the control or without the fault or
negligence of USEC
:
(1) DOE may terminate the Agreement and be
relieved of obligations under it; (2) at DOEs request, USEC agrees to
reimburse DOE for any increase in costs caused by expediting the
decontamination and decommissioning of facilities to have been used by
USEC for deployment of advanced enrichment technology (e.g., increase
in overall cost relative to a budget or baseline
)
; (3) USEC agrees
to transfer to DOE royalty free exclusive rights in the field of
uranium enrichment worldwide in all centrifuge intellectual property
owned or controlled by USEC, either developed or background under the
ORNL CRADAs; agrees to deliver to DOE copies (copying costs to be
reimbursed) of all technical data necessary to further develop or
practice technology covered by the transfer of IP rights which data
may be subject to proprietary restrictions as appropriate; and agrees
to the cancellation of any license by DOE or ORNL to USEC relating to
the subject matter of the ORNL CRADAs in the field of centrifuge
uranium enrichment; (4) USEC agrees, at DOEs request, to return any
property leased by USEC upon which the advanced enrichment technology
project was being or was intended to be constructed; and (5) except
for those GDP facilities then currently operating, USEC agrees to
waive its statutory exclusive right to lease the GDPs (and the
implementing lease provisions) and its rights under Section 3.4(a) and
3.4(c) of the lease to have the opportunity to include GDP property in
its leasehold before DOE disposes of the property (In taking any
actions as a result of the preceding waivers, DOE agrees that the
authorized actions for failure to meet milestone(s) as provided under
this provision do not include transitioning USEC from its operation of
the Paducah enrichment facilities as is provided for in the event USEC
ceases enrichment operations at Paducahas defined in this Agreement
unless there has been a determination that USEC has ceased enrichment
operations at Paducah pursuant to that portion of the Agreement.)
Once USEC has secured (and demonstrated to DOE) firm financing
commitment(s) for the construction of a 1 MM SWU annual capacity
advanced enrichment technology commercial plant and has begun
construction of such plant, DOEs remedies described in the previous
two paragraphs shall be limited to those circumstances under which
USECs gross negligence in project planning and execution is
responsible for schedule delays or in the circumstance where USEC
constructively or formally abandons the project. Further, if USEC has
secured (and demonstrated to DOE) a firm financing commitment for the
construction of a 1 MM SWU annual capacity advanced enrichment
technology commercial plant and has begun construction of such plant,
then any use of intellectual property rights or data transferred or
delivered pursuant to the previous sentence and item #3 above by third
parties for private non-governmental purposes shall be at a reasonable
royalty taking into account the relative equities of the Parties. In
the event USECs gross negligence in project planning and execution is
responsible for schedule delays or in the circumstance where USEC
constructively or formally abandons the project after USEC has secured
(and demonstrated to DOE) a firm financing commitment for the
construction of a 1 MM SWU annual capacity advanced enrichment
technology commercial plant and has begun construction of such plant,
DOE may also recommend USECs removal, in whole or in part, as EA
under the Russian HEU Agreement.
If USEC is no longer willing or able to proceed with the advanced
enrichment technology deployment project, it must provide advance
notice to DOE that it intends to abandon the project. In that event,
or in the event NE determines (after USEC has had an opportunity to
present its position) that USECs failure to meet a milestone set out
in the Agreement constitutes a constructive abandonment of the
advanced enrichment technology deployment project, NE may take, or
direct USEC to take as the case may be, any of the actions identified
in (1) through (5) above. Any determination by NE is appealable to the
Secretary of Energy (or designee), whose determination shall be
considered to be the final agency action under this Agreement. USEC
retains all remedies available to it under the Administrative
Procedure Act to challenge the decision of the Secretary (or
designee).
Within thirty days of USECs request following the execution of this
Agreement, DOE agrees to authorize the execution of the CRADA(with
similar terms as the expired CRADA provided such terms are not
inconsistent with the terms of this Agreement) by Oak Ridge National
Laboratory (ORNL) for the USEC-funded work associated with DOE-owned
gas centrifuge technology. The Parties agree to work together in good
faith
to attempt to negotiate an expanded CRADA to address the scope of ORNL support
of the entire demonstration and lead cascade projects.
Without any admission of liability, DOE agrees to replace any
out-of-specification uranium hexafluoride (up to 9,550 MTU) not
meeting ASTM C-787-90 for commercial natural uranium hexafluoride (the
ASTM Specification) transferred by DOE to USEC on or about June 30,
1993, April 20, 1998, and May 18, 1998 (the Affected Inventory) as
described in this provision:
(a)In exchange for DOEs taking title, but not custody (until
processing), of DUF6 generated by USEC at the Paducah
GDP
1
during USECs fiscal years 2002 and 2003 and
one-half the amount of DUF6 generated during USECs fiscal years 2004
and 2005 for a total of up to 23.3 million KgU of DUF6 ( the
Specified DUF6), USEC agrees to operate, entirely at its cost
excluding infrastructure costs (DOE will pay all site infrastructure
costs, subject to the availability of appropriations), the Portsmouth
Shipping and Transfer (S/T) facilities for fifteen (15) months
following the date of execution of this Agreement to remove
contaminants from a portion of its Affected Inventory to meet ASTM
C-787-90 or produce material acceptable to USEC for use as feed
material in its enrichment facility. At the end of each month, USEC
will release the United States from any and all liability and claims
relating to or arising from DOEs transfer of the portion of the
Affected Inventory equal to the amount processed during the month that
meets the ASTM specification or is accepted by USEC, subject to DOEs
taking title to the DUF6 as described above. At the end of the
15-month period, USEC agrees to have released, regardless of the
actual amount processed, a minimum of 2800 MTU. Such releases shall
first relate to the May 18, 1998 transfer, and continue to relate next
to the April 20, 1998 transfer, and then the June 30, 1993 transfer.
As USEC operates the S/T facility to remove contaminants to meet the
referenced ASTM standard, USEC will provide to DOE monthly reports on
the technetium contamination of each cylinder of the Affected
Inventory before processing, other available test data after
processing and the number of cylinders processed in the S/T facility
that meets the ASTM Specification or are accepted by USEC. DOE will
document its taking title to the Specified DUF6 upon receipt of USECs
confirmation of the Specified DUF6 generated
1
The DUF6 shall not exceed the design base
criteria contained in Table 1 of the DOE RFP
NO. DE-RP05-01OR22717, dated October 31, 2000
Part I, Section C, IV.A. (Attachment 1). USEC
will ensure that the DUF6 is placed either in
new cylinders or in washed cylinders. USEC
will provide DOE the data from the samples
tested by USEC in accordance with its
operating procedures each month for the DUF6
generated.
2
All transportation, storage, waste disposal,
container purchases and any incidental
expenses for processing USECs Affected
Inventory under paragraph (a) shall be borne
by USEC. The Parties will use the agreement
found at Exhibit C of the Lease to govern the
storage of up to 2 B-25 containers with
dimensions of 4 x 4 x 6 of USEC-owned
technetium waste generated from the
processing of USECs Affected Inventory under
paragraph (a) which USEC is not authorized by
law to store. All transportation and storage
expenses for Paducah-generated DUF6 until
such time as it has been delivered to DOE at
DOE request for conversion and disposal shall
be the responsibility of USEC.
Prompt access by DOE (and designated representatives) to data and information needed to monitor compliance with terms of the Agreement.
Terms on use and disclosure of trade secret/proprietary information.
No impairment or modification of Executive Agent MOA.
/s/ William H. Timbers
William H. Timbers
President and Chief Executive Officer
USEC Inc.
to
AGREEMENT BETWEEN
THE U.S. DEPARTMENT OF ENERGY (DOE)
AND
USEC INC. (USEC)
to DOE,
provided however
that DOE shall disclose such item of Trade Secret/Proprietary
Information only to the extent required by such law; or (v) DOE determines that such item of Trade
Secret/Proprietary Information may provide evidence of a violation of a law by USEC or any other
person or a violation of a contractual obligation of USEC, and DOE further determines that
disclosure of such item of Trade Secret/Proprietary Information is necessary in order to allow the
United States to take action with respect to such violation, which action shall include without
limitation, investigating, prosecuting, enjoining, or restraining such violation,
provided
however
that the DOE shall disclose such item of Proprietary Information only to the extent
necessary to take such action with respect to such violation.
/s/ William H. Timbers
William H. Timbers
President and Chief Executive Officer
USEC Inc.
and
99
TC contamination in the DUF
6
tails cylinders
Contaminant
ppb
u
238
PU
0.00012
239
PU
0.043
237
Np
5.2
99
Tc
15.9
241
Am
0.0013
NONEXCLUSIVE EASEMENTS AND RIGHTS-OF-WAY
[RESERVED]
MAP OF DEPARTMENTS PERSONAL PROPERTY
LISTING OF DEPARTMENTS PERSONAL PROPERTY
RELEASED FACILITIES AND EQUIPMENT LIST
[RESERVED]
NOTICE OF HAZARDOUS SUBSTANCES
For Buildings to be Leased to USEC
In Support of the American Centrifuge Program
1.
Since the Buildings were constructed in the early 1980s, limited hazardous substances
have been used or were present in or around the Buildings. In addition, limited
radioactive material including source, special nuclear, and by-product material have
been used or were present in or around the Buildings.
2.
The Buildings are located at PORTS, which is subject to an ongoing remediation effort
by DOE. DOE, U.S. Environmental Protection Agency (EPA), and the Ohio Environmental
Protection Agency (OEPA) have entered into agreements for the clean-up of the PORTS
reservation. An extensive RCRA Facility Investigation (RFI) has been conducted for
the entire PORTS reservation. A Cleanup Alternatives Study/Corrective Measures Study
(CAS/CMS) was developed for the area of the reservation where the Buildings are
located (Quadrants I and Quadrant III CAS/CMS). The RFI determined that no hazardous
contamination existed around the Buildings and adjacent lands, due to past building
operations, that would require corrective measures or
cleanup. (See Quadrant I Decision Document and Quadrant III Decision Document,
dated March 2001 and March 1999, respectively.
3.
There have been limited radiological activities in Buildings X-3001 North Half,
X-7725, and X-7726, and radiological contamination exists within systems/equipment
in these three buildings. Access to the contaminated areas in Buildings X-7725 and
X-7726 is currently maintained by DOE in accordance with 10 C.F.R. Part 835,
Occupational Radiation Protection. Access to the contaminated area in Building
X-3001 North Half is maintained by the United States Enrichment Corporation (USEC).
4.
There has been storage of various hazardous substances in some of the Buildings
for more than one year including the following:
a.
Areas of Building X-7725 are being utilized as the OEPA permitted DOE RCRA Part B
storage facility. These permitted areas contained mixed waste (hazardous and radiological
or PCB, hazardous and radiological), and are being clean closed in accordance with the
OEPA approved closure plan for Building X-7725. In addition, this facility is being used
for the storage of low level radiological waste.
b.
Building X-7725A is being used for storage of DOE PCB/radiological waste storage.
c.
Buildings X-3001, X-3002, and X-7745R have been or are being used for the storage of
DOE low level radiological waste and PCB/radiological waste.
d.
Building X-3012 was used as a satellite accumulation area storage facility for
RCRA and mixed waste.
e.
Building X-3346 contained petroleum products due to activities conducted during the
years it was occupied by the Ohio National Guard. The facility also contains
radiological contaminated gaseous diffusion plant equipment.
5.
DOE had an active program in the 1990s to close out all of the regulated
underground storage tanks associated with the Buildings listed above. All regulated
tanks were removed, except for one tank that was closed in place (filled with
sand/grout). The soil surrounding each tank was analyzed for hazardous constituents,
and clean closure regulations were met.
F
ACILITY
DESCRIPTION
Office Building
IAEA Trailer
Process Building
Process Building
Process Support Building
Feed and Customer Services Building
Pump house and Air Plant
Cooling Tower
Valve House
Oil Storage Facility
Maintenance, Stores and Training Building
Recycle/Assembly Facility
Waste Accountability Facility
Centrifuge Training and Test Facility
lnterplant Transfer Corridor
Rubb Bldg at X-7725
Rubb Blda at X-3346
CONDITION REPORTS
[CD ROM CONTAINS OFFICIAL USE ONLY INFORMATION]
ESTIMATE OF COSTS TO DECONTAMINATE AND DECOMMISSION
COMMERCIAL PLANT
[RESERVED]
CAPITAL IMPROVEMENTS
Installation of Gas Centrifuge Machines including, but not limited to Centrifuge
Rotors, Casings, Upper Suspensions, Lower Suspension and Drive Assemblies,
Diffusion Pumps, Centrifuge Columns and support structures, Centrifuge Machine
Drive and Control Systems (classified), Portable Carts, and Centrifuge Process
Control and Data Acquisition System (classified).
Refurbishment and/or installation of service modules, piping, valves and support
equipment for the operation of the cascades
Installation of vacuum pumps, chemical traps, cooling water pumps, heat exchangers,
chiller systems and control systems to support the operation of the cascades
Installation of generators and Uninterruptible Power Supplies
Refurbishment and installation of electrical switchgear and
heating/ventilation/pressurization control equipment
Restoration of elevators, restrooms and utility areas and instrumentation upgrade
for building cranes
Installation of analytical instruments for measuring performance
Installation of carts for feed and emergency inventory withdrawal
Removal of concrete from floor supports for installation of centrifuge machines
Installation/refurbishment of raw cooling and sanitary water systems and
facilities/equipment which utilize these systems.
Installation of control room and computer equipment
Installation of maintenance equipment
Restoration of offices, locker rooms, doors and lighting.
Restoration of doors and lighting
Restoration of Heating/Ventilation/Air Condition systems
Restoration of traffic control systems.
Restoration of restrooms, office areas, lighting, cranes and elevators
Restoration of receiving dock area
Restoration of column assembly stands
Restoration of machine assembly stands
Restoration of building utilities and HVAC equipment.
Installation of storage stations for the staging of centrifuge machines
subassemblies, rotor, tube, subassemblies, components, and drum
shipping container
Installation of storage stations for the staging of assembled centrifuge
machines.
Refurbishment and installation of electrical switchgear, lighting, and
heating/ventilation/pressurization control equipment
Restoration of cranes, elevators, restrooms and utility areas.
Restoration of the battery storage rooms and the transporter storage room
Restoration of the battery storage rooms and the transporter storage room
Restoration of cranes
Restoration of building lighting
Removal of dikes
Restoration of restrooms, locker rooms, lunchrooms and office areas
Restoration of building utilities: electrical substations, HVAC systems,
Diesel generators, power backup systems and battery charging equipment
Restore elevators
Mobile equipment and portable carts
Restore maintenance shop and IPT maintenance shop
Install a building security access control system
Refurbishment/installation of equipment for centrifuge subassembly,
component receipt, handling and storage
Restore Gas Test stands (4)
Restore Gas Test stand utilities: vacuum, electrical, instrumentation,
chemical traps, cooling water pumps, heat exchangers, chillers and
process vent systems
Restore\ Install Rotor Balance stands (24)
Restore needed Rotor Balance stand utilities: vacuum, electrical, instrumentation,
chemical traps, cooling water pumps, heat exchangers, and chillers
Restore Static Assembly stands (6)
Restore long parts insertion equipment for static stands (6)
Restore a Select repair stand (1)
Procure Centrifuge Transporters
Install Column Assembly stands (6)
Install computer equipment
Install process area security access control systems as required
Installation of cassette supports and related equipment systems
Restore the facility for waste processing
Restore the building utilities
Restore the building sprinklers
Demo and remove all original equipment and piping not needed for the commercial
plant.
Construct a new addition to the building for UF6 sampling and transfer operations.
Install electric autoclaves, UF6 piping, and utilities to support UF6 sampling
and transfer operations in the addition.
Install a refrigeration system to support the cooling of autoclave cylinders in the
UF6 sampling and transfer area.
Install crane rails for 20 ton cranes to support cylinder handling in the sampling
and transfer area.
Install electric ovens, UF6 piping, and utilities in the west high bay area to
supply UF6 feed to the centrifuge cascades.
Install a feed purification system to assure the purity of feed material that is
fed to the centrifuge machines.
Install a UF6 evacuation system and a vent monitoring system to support the feed
and UF6 sampling and transfer operations.
Install crane rails for 20 ton cranes to support cylinder handling in the feed
area. These rails will also interface with the X-3346A Building.
Install electrical generators and Uninterruptible Power Supplies
Install or refurbish electrical switchgear and HVAC control equipment.
Restore offices, locker rooms, control rooms, and utility areas.
Install analytical instruments for measuring performance.
Construct 4 new cylinder storage yards,
X-7746N, X-7746S, X-7746E, and X-7746W,
adjacent to the building for UF6 cylinder storage
Replace the Interconnecting Process Pipeway (IPP) between X-3346 and X-3001.
Construct the new X-3346A Feed and Product Shipping and Receiving Building to
provide for the shipping and receiving of UF6 cylinders to and from the Commercial
Plant.
Install crane rails for 20 ton cranes to support cylinder handling in the X-3346A.
These rails will also interface with the X-3346 Building
Install offices, restrooms and utility areas.
Construct the new X-3356 Product and Tails Withdrawal Building to provide for the
withdrawal of UF6 product and tails material from the Commercial Plant.
Install product cold traps, UF6 piping, and utilities to support
the withdrawal of product UF6 from the centrifuge cascades.
Install compressors, UF6 piping, and utilities to support the
withdrawal of tails UF6 from the centrifuge cascades.
Install support utilities for the compressors lubrication system,
coolant system.
Install cold boxes to house receiving cylinders for product and
tails withdrawal.
Install a refrigeration system to support the product cold trap and
cylinder cold box operations.
Install a UF6 evacuation system and a vent monitoring system to
support the product and tails withdrawal operations.
Install crane rails for 20 ton cranes to support cylinder handling in
the product and tails withdrawal areas.
Install electrical generators and Uninterruptible Power Supplies
Install electrical switchgear and HVAC control equipment.
Install offices, locker rooms, control rooms, and utility areas.
Install analytical instruments for measuring performance.
Construct cylinder storage yards adjacent to the building for UF6
cylinder storage.
Refurbish as necessary to support commercial plant.
Construct new cylinder storage yard, X-745H, to store tails cylinders in support of
commercial plant.
Upgrade or replace the electrical switchgear and support equipment as necessary.
Upgrade the security system for the commercial plant including fencing, portals,
and electronic personnel access monitoring and control.
Upgrade or replace the recirculating cooling water equipment, refurbish air plant
compressors, and refurbish or replace RCW and Air Distributions systems as
necessary.
Refurbish the existing cooling tower cells and equipment and install new cooling
tower cells if required.
Refurbish office and training areas as necessary.
Refurbish maintenance areas as necessary.
Refurbish the Automatic Stores and Retrieval Systems and place in service.
AT THE GASEOUS DIFFUSION PLANTS)
Once the NRC assumes nuclear regulatory oversight for USEC activities at the GDPs, there will
be a need to coordinate DOE and USEC activities at the GDPs to ensure that:
1.
USEC and DOE activities at the GDPs do not adversely affect the operations of the
other party in terms of health and safety, environmental protection, safeguards and
security, and nuclear regulatory compliance.
2.
Situations with the potential to affect both DOE and USEC operations and personnel,
such as emergencies and threats directed toward site activities, are managed in a
coordinated manner that protects the safety and health of DOE and USEC personnel,
including their respective contractors/subcontractors, and the public.
The following premises support the proposed resolution of shared site issues:
1.
This joint USEC and DOE approach to shared site issues does not modify, amend, or.
alter in any way the lease
1
between USEC and DOE for the GDPs, or any
memoranda of agreement, or any other agreements between USEC and DOE.
2.
The site can be divided into three types of areas: 1) DOE areas (generally
non-leased) in which DOE managed or overseen activities, which are exempt from NRC
regulation under Section 110.a of the Atomic Energy Act of 1954, as amended, are
conducted; 2) USEC leased areas in which USEC activities subject to NRC regulation are
conducted; and 3) common areas (e.g., site roads) which are used for USEC and DOE
activities.
1
The term lease refers to the Lease Agreement between the United States
Department of Energy and the United States Enrichment Corporation dated as of July 1, 1993.
3.
DOE will self-regulate DOE activities conducted in DOE areas and common areas in
accordance with applicable DOE requirements. This includes DOE personnel and their
contractors/subcontractors. DOE assumes full responsibility for the safety,
safeguards, and security of DOE activities.
4.
USEC activities conducted in USEC areas and common areas are subject to NRC
regulation under terms of the certification application. This includes USEC personnel,
their contractors, and subcontractors. USEC assumes full responsibility for the safety,
safeguards, and security of USEC activities.
1.
Shared Systems and Continuity of Essential Services
USEC provides certain services and utilities (e.g., lighting, heat) to DOE that are
necessary for the safety, safeguards, or conduct of DOE activities. Similarly, USEC
and DOE activities are protected or supported by shared systems (e.g., nuclear
criticality and security alarm systems, fire protection sprinklers) that are
important to the safety and safeguards of USEC and DOE activities.
USEC and DOE will work together to ensure that interruptions to services necessary
for the safety, safeguards and security of the GDPs are minimized and that shared
systems remain operable. Additionally, USEC will apply configuration management
controls to these systems, in a manner commensurate with that applied to equivalent
USEC systems, to ensure that the safety, safeguards and security systems, and
conduct of USEC and DOE activities are not adversely affected. Similarly, USEC and
DOE will work together to establish a process for controlling the scheduling of
interruptions to essential services to ensure that the safety,
safeguards, and
security of the GDPs are not adversely affected.
2.
Control of Work Activities
DOE and USEC agree that activities in leased spaces must be conducted in accordance
with USEC commitments to NRC. Accordingly, DOE (including their
contractors/subcontractors) will obtain USECs approval prior to conducting work in
leased spaces. Similarly, prior to conducting work in non-leased spaces, USEC
(including their contractors/subcontractors) will obtain DOEs approval. Both
parties will strive to ensure that such approvals do not impede the schedule for
the work activities of either party. Additionally, both parties will ensure that
work activities that affect either party are conducted in accordance with the
appropriate procedures.
3.
Plant Changes
DOE and USEC agree to establish procedural controls to ensure that each party is
promptly notified, and appropriate approvals obtained, prior to conducting
activities that affect the design, construction, operation or maintenance of
facilities and systems on their respective portions of the GDP sites. This
process will allow the other party to evaluate the potential safety impact of
such a change on its own facilities, systems, and activities at the site.
USEC will provide DOE with a copy of each approved written Safety Analysis
issued in accordance with 10 CFR § 76.68 with respect to any changes to the
leased premises or the operation of the leased premises at either GDP site.
Similarly, DOE will provide USEC with a copy of each Unreviewed Safety Question
Determination (USQD) or Safety Analysis prepared by or for DOE with respect to
any changes to DOEs facilities, systems, or operations at either GDP site. Each party will provide
the other with pertinent information concerning any Unreviewed Safety Question
(USQ) identified in connection with its operations and activities at either GDP
site, including any Justification for Continued Operation (JCO) or similar
document prepared in connection with such USQ. In the event that either party
has a concern about the potential impact of any plant changes by the other party
on the safety of its own operations and activities at either GDP site, the
appropriate USEC and DOE representatives for that site shall jointly review the
change and take appropriate action to resolve the concern (including any
required plant modifications) in a prompt manner.
4.
Emergency Management Coordination
In accordance with Exhibit F of the lease, USEC will provide emergency response training
to DOE personnel, DOE contractors, and personnel of third party tenants of DOE at each of
the GDPs. In accordance with the lease, DOE will reimburse USEC for the cost of this
service. DOE will make the necessary arrangements to assure that these personnel attend
such training and be responsible for tracking their participation to assure they receive
the required initial and periodic training.
The Emergency Plan for both GDPs describes the roles and responsibilities of USEC and DOE
in the event of an emergency. For a declared emergency, USEC has the lead in responding to
the emergency and DOE serves as an onsite member of the Emergency Operations Center. This
relationship will continue to be maintained when NRC assumes regulatory oversight of the
GDPs.
In the event of an emergency, in coordination with the USEC emergency management team, DOE
will take the appropriate actions to control activities in the reservation area
surrounding each of the GDP sites, as defined in the current Emergency Plan for each GDP.
This includes
the exclusion or evacuation of personnel from such area during an emergency.
Additionally, USEC has ample authority to restrict access to the controlled area of the
GDPs
2
for the purposes of plant protection, security, emergency preparedness, and
radiation protection.
3
5.
Third Party Activities on GDP Sites
DOE and USEC agree to promptly provide each other with pertinent information concerning any
operations or activities being conducted on their respective portions of each of the GDP
sites, and the surrounding DOE-owned reservation on which that site is located, by or on
behalf of third parties (e.g., the National Guard and other DOE tenants or lessees) that could
have a potential impact on the operations or activities of the other party at that site.
Specifically, DOE will provide USEC (and vice versa) with a written description of each
existing third party lease agreement for each GDP site, including a detailed description of
(a) any hazardous materials used or stored on site in connection
with such lease, (b) any
operations or activities being conducted under such lease that could
pose a hazard to USECs
operations on the leased premises or act as an initiating event for an accident on the leased
premises, and (c) any transportation or other access requirements on the leased premises or
common areas of the site associated with such lease, particularly with respect to the
transportation or storage of hazardous materials or equipment. Such descriptions shall be
updated promptly to reflect changes in third party activities. In the event that either party
has a concern about the potential impact that third party activities could have on the safe
operation of either GDP site, the appropriate USEC and DOE representatives for that site shall
jointly review the issue and take appropriate action to resolve the concern in a prompt and
cost-effective manner.
6.
Physical Protection Coordination
Effective access control and response to threats against site activities and facilities
requires integrated access control for USEC and DOE activities and coordinated command and
control in responding to threats against site facilities and activities. USEC will continue
to maintain a physical security protection plan for the GDPs which defines the roles and
responsibilities of the site security organizations. In the event of a security threat at the
GDPs (including both leased and non-leased areas), USECs security force has the
responsibility to initially respond to the threat and determine the appropriate course of
action. Depending on the significance of the security threat, the Emergency Operations Center
at the affected site will be activated and, as discussed in Item 4 of this enclosure, USEC
and DOE will respond accordingly. This relationship will continue to be maintained when NRC
assumes regulatory oversight of the GDPs.
2
The controlled area is defined as an area outside the restricted area but inside
the site (reservation) boundary.
3
See USEC letter to NRC dated December 13, 1995, in response to Question 2.0Q5 of
the application for PGDP and PORTS.
7.
Event Notification
USEC will promptly notify DOE of any reportable events required by 10 CFR 16 or other
applicable NRC regulations. This notification will normally be made by the Plant Shift
Superintendents (PSS) office. However, this notification will not take precedence over the
prompt notification of the NRC as required by NRC regulations. Similarly DOE will promptly
inform USEC of any reportable events, under DOEs occurrence reporting system, for which DOE
is responsible. Such notification will normally be made to the PSSs office.
8.
Helipad
USEC will establish written controls for helicopter access to the GDP sites, and the air space
over the sites for use by USEC, DOE, or other DOE tenant organizations at the sites and to
assist state or local law enforcement or emergency response personnel. Once established, DOE.
agrees to abide by these controls. As part of these controls, DOE will obtain USECs
concurrence from the PSS prior to utilizing the site helipad.
9.
Communication of Incident Information and Media Coordination
DOE and USEC will coordinate information releases to the media in the following manner:
a.
DOE has the lead role in providing information relating to DOE activities and USEC
will refer the media to DOE in such cases; and
b.
USEC has the lead role in providing information relating to USEC activities and
DOE will refer the media to USEC in such cases unless there is a need for DOE to
provide information in its role as site landlord.
c.
DOE and USEC will promptly provide each other with information copies of news
releases of events that occur at the GDPs.
10.
Radiation Protection
Radiation Protection (e.g., exposure monitoring) of employees is the responsibility of the
employer (USEC or DOE) and is independent of the activities upon which they are working. That
is, radiation protection for DOE personnel and their contractors/subcontractors is performed
under the DOE radiation protection program. Similarly, radiation protection for USEC
personnel and their contractors/subcontractors is performed under the USEC radiation program.
In addition:
a.
Radiation exposure information for individuals who work on both DOE and USEC
activities will be shared to permit DOE and USEC to satisfy their radiation exposure
reporting requirements; and
b.
DOE will provide NRC with the radiation exposure information for DOE employees
and their contractors/subcontractors, as requested, in order to meet NRCs reporting
requirements.
In accordance with Exhibit F of the lease, USEC will provide radiation protection training
to DOE personnel, DOE contractors, and personnel of third party tenants of DOE at each of
the GDPs. In accordance with the lease, DOE will reimburse USEC for the cost of this
service. DOE will make the necessary arrangements to assure that these personnel attend
such training and be responsible for tracking their participation to assure they receive
the required initial and periodic training.
11.
International Atomic Energy Agency (IAEA) Safeguards Agreement Implementation
DOE and USEC will cooperate with the NRC in the development, review, and revision of
Subsidiary Arrangements and Facility Attachments for DOE and USEC activities at the sites
which are applicable to the safeguards requirements of the IAEA.
12.
Unclassified Controlled Nuclear Information (UCNI)
DOE is developing guidelines with consultation and technical support from USEC for the
identification of UCNI at the GDPs and will provide these guidelines to NRC.
13.
Access to Deleased Outside Areas
All activities in non-leased areas will be executed consistent with DOE requirements. USEC
procedures which comply with NRC requirements may be utilized provided they meet or exceed
equivalent DOE requirements. Subject to DOE approval, USEC may be permitted to run
additional or new utilities over and/or under these outside areas to serve additional needs of
USEC and DOE. USEC will contact DOE prior to work in these areas and will not violate any
requirements imposed on the DOE by other regulatory agencies (e.g. EPA, OSHA). In cases
where prior notification would deter USECs ability to respond to an exigent situation (e.g.,
emergency response situations, water main breaks, etc.), notification will occur as soon as
practical.
George P. Rifakes Date
United States Enrichment Corporation
Executive Vice President
1.
The term As Found means a condition where the as-built configuration of the plant or the
as-implemented program, policy, or procedure does not agree with the Authorization Basis.
2.
The term Authorization Basis means the documentation of programs, processes, and facility
configuration upon which the Department of Energy (DOE) authorizes the safe and secure
operation of an activity or facility in its facilities subject to DOEs regulatory oversight.
The Authorization Basis is described in documents such as the facility Safety Analysis Report,
Hazard Classification Documents, Technical Requirements, DOE-issued Safety Evaluation Reports,
Security Plans, and the facility specific written commitments made in order to comply with DOE
requirements under the GCEP Leased Premises Regulatory Oversight Agreement (GCEP ROA).
3.
The term CI or Classified Information means Restricted Data and Formerly Restricted Data
protected against unauthorized disclosure pursuant to the Act and National Security
Information that has been determined pursuant to Executive Order 12958, as amended March 25,
2003, or any predecessor or successor executive order to require protection against
unauthorized disclosure and that is marked to indicate its classified status when in
documentary form.
4.
The term CI Civil Penalty means a monetary penalty that may be imposed for a violation or
violations relating to the security or safeguarding of Classified Information as established
in 10 CFR Part 824.
5.
The term CI Notice of Violation means a document setting forth the determination
that one or more violations relating to the security or safeguarding of Classified
Information have occurred.
6.
The term CI Violation means a failure of the Corporation to meet any of the DOE
requirements relating to the security or safeguarding of Classified Information incorporated
into this Agreement. Each failure may be considered a separate occurrence of a violation, in
addition the failure may be considered as a new violation each day that the same violation
persists.
7.
The term Clear and Present Danger means a condition or hazard that could be expected to
cause: (a) either death or serious harm to plant workers or the public, or (b) serious
damage to the common defense and security, immediately or before such condition or hazard
could be eliminated through the normal enforcement mechanisms discussed in this Agreement.
8.
The term Corporation means the United States Enrichment Corporation, its sublessee(s), its
agents and representatives and its successors and assigns.
9.
The term Decreased Effectiveness Evaluation means an evaluation to ensure that the
proposed change does not decrease the effectiveness of the safeguards and security plans.
The evaluation is conducted as prescribed in 10 CFR Part 70.32 or 10 CFR Part 76.68 as
appropriate.
10.
The term DOE Functional Area Implementation Requirements means the implementation
requirements with respect to the nuclear safety, safeguards and security objectives as set
forth in of Appendix A to this Agreement.
11.
The term DOE Inspector means a DOE safety and health or safeguards and security professional
supporting DOE Functional Areas Implementation Requirements oversight activities.
12.
The term DOE ORO Manager means the Manager of DOE Oak Ridge Office or one or more DOE
employee(s) whom that Manager has designated, in writing, to act for him in all, or a portion,
of the matters addressed herein.
13.
The term DOE Regulatory Oversight Manager means the DOE representative, or his
designee, responsible for implementation of all facets of DOE regulatory oversight of the
GCEP Leased Premises.
14.
The term GCEP Leased Premises means the definition ascribed in the GCEP Lease.
15.
The term OPAE means the Office of Price-Anderson Enforcement in DOE Headquarters.
16.
The term OPAE Civil Penalty means a monetary penalty that may be imposed for a violation or
violations for violation of 10 CFR Parts 830 and 835 requirements.
17.
The term OPAE Notice of Violation means a document setting forth the determination of the
DOE Office of Price-Anderson Enforcement that one or more violations of the 10 CFR Part 830 and
10 CFR Part 835 exemption requirements have occurred.
18.
The term OPAE Violation means a failure of the Corporation to meet any of the 10 CFR Part 830
exemption requirements or the 10 CFR Part 835 exemption requirements incorporated into this
Agreement. Each failure may be considered a separate occurrence of a violation, in addition the
failure may be considered as a new violation each day that the same violation persists.
19.
The term ROA means the Regulatory Oversight Agreement between the Department of Energy and
the United States Enrichment Corporation for the GCEP Leased Premises.
20.
The term ROA Civil Penalty means a monetary penalty that may be imposed for violation
of DOE Functional Area Implementation Requirements.
21.
The term ROA Notice of Violation means a document setting forth the determination DOE
Regulatory Oversight Manager that one or more violations of the DOE ROA Functional Area
Implementation Requirements have occurred.
22.
The term ROA Violation means a failure of the Corporation to meet any of the Functional Area
Implementation Requirements incorporated into this Agreement. Each failure may be considered a
separate occurrence of a violation, in addition the failure may be considered as a new violation
each day that the same violation persists.
23.
The term Safety Analysis means a systematic analysis that identifies facility and
external hazards and their potential for initiating accident sequences, the potential accident
sequences, their likelihood and consequences, and any accident preventing or consequence
mitigating features.
24.
The term Safety System means those structures, systems, and components (SSCs) that are
relied upon to prevent, control, or mitigate unacceptable consequences resulting from the hazards
identified for a facility. SSCs are designated as Safety Class if they are necessary to keep
hazardous exposures to the public below the offsite Evaluation Guidelines. SSCs are designated
as Safety Significant if their functions are major contributors to defense in depth and/or
worker safety, as determined from the Safety Analysis.
25.
The term Technical Requirements means the technical specifications, operational
requirements, and maintenance requirements for an item identified as Safety Significant are
referred to in this GCEP ROA as Technical Requirements. Changes to Technical Requirements must
be accomplished through a formal Change Control Process established by the lessee.
26.
The term Unreviewed Safety Question means the determination that a proposed change is
outside the bounds of previously DOE-approved Authorization Basis.
27.
The term Unreviewed Safety Question Evaluation means the process by which changes to the
facility, equipment within the facility, or processes within the facility must be reviewed to
determine if there is an impact on safety for the activities subject to DOE regulatory oversight.
Changes will undergo a formal Change Control Process, but if a change could have a negative
impact on safety to activities subject to DOE regulatory oversight, an Unreviewed Safety Question
(USQ) Evaluation will be conducted and documented to determine whether the change is within the
approved Authorization Basis or outside of the Authorization Basis. Changes that do not affect
the safety of activities undertaken under DOE regulatory oversight are not subject to review
under the GCEP ROA. Such changes will be subject to the applicable NRC requirements.
All other capitalized terms shall have the meaning ascribed to them elsewhere in this
Agreement or the appendices hereto, or the GCEP Lease.
1.
DOE has determined that the DOE Functional Area Implementation Requirements set forth in
Appendix A are reasonable and appropriate, and shall constitute the Nuclear Safety and
Safeguards and Security Requirements applicable to the GCEP Leased Premises, and that
compliance with these DOE Functional Area Implementation Requirements will enable the GCEP
Leased Premises to continue to operate safely and protect the public health and safety and
provide for the common defense and security.
2.
DOE has determined that the program of Corporation self-assessments and DOE inspections,
reviews, and other activities is reasonable and appropriate. DOE and the Corporation further
agree that this Regulatory Oversight Program will constitute the mechanism by which DOE will
exercise regulatory oversight and control over the GCEP Leased Premises with respect to
nuclear safety, safeguards and security.
3.
The Corporation agrees to ensure that the Corporation activities continue to comply with the
Functional Area Implementation Requirements in Appendix A. The Corporation agrees to impose
these commitments on any subcontractor/vendor/partner while performing activities in support
of the
American Centrifuge Plant performed pursuant to the Functional Area Implementation
Requirements identified in Appendix A of this Agreement. The Corporation further agrees, as
part of the Regulatory Oversight Program, to undertake the self-assessment activities
delineated in the Functional Area Implementation Requirements, to cooperate with DOE in the
inspections, reviews, and other activities conducted by DOE in accordance with the Regulatory
Oversight Program; and to implement corrective or preventive actions as a result of these
assessments, inspections, reviews, and other activities.
4.
A.
DOE has determined that DOEs Regulatory Oversight Program of the GCEP Leased Premises,
including all of the self-assessments, inspections, reviews, and other activities described in the
Regulatory Oversight Program, will be coordinated by the DOE Regulatory Oversight Manager. The
DOE Regulatory Oversight Manager will have the authority to modify the Functional Area
Implementation Requirements, including the authority to make additions or deletions to these
requirements, if the DOE Regulatory Oversight Manager determines that the additional requirement
is necessary to protect the public health and safety or to provide for the common defense and
security, or the deleted requirement is no longer necessary to protect the public health and
safety or to provide for the common defense and security in connection with the operation of the
GCEP Leased Premises.
B.
The Corporation is authorized to add to, modify, or delete (Change) any of the
policies, procedures, practices and other implementation measures utilized to meet the Functional
Area Implementation Requirements, provided (1) there will be no material diminution in the level
of protection of the public health and safety or common defense and security as a result of such
Change; (2) the Change does not involve an Unreviewed Safety Question or a Change in the
Authorization Basis or an Operational Safety Requirement; (3) auditable records containing a
summary of the Changes performed and retrievable evaluation packages required by the DOE
requirements specified in the Functional Area Implementation Requirements are maintained; and
(4) a summary of the Changes is provided to DOE annually for review.
C.
For proposed Changes which involve an Unreviewed Safety Question or a Change in the
Authorization Basis or a Technical Requirement, the Corporation shall obtain DOE review and
approval before implementing the proposed Change.
D.
In reviewing the proposed modification of any specific Functional Area Implementation
Requirements, the DOE Regulatory Oversight Manager will, whenever possible, attempt to facilitate
the transition to compliance with the regulatory standards and requirements likely to be imposed on
the GCEP Leased Premises by the NRC, if applicable.
5.
The enforcement procedures available to DOE in the event that the Corporation fails to comply
with the Functional Area Implementation Requirements are attached hereto, and incorporated by
reference herein as Appendix B.
Larry W. Clark
Assistant Manager for Nuclear Fuel Supply
U. S. Department of Energy
Oak Ridge Operations
P. O. Box 2001
Oak Ridge, Tennessee 37831
Victor N. Lopiano
United States Enrichment Corporation
Two Democracy Center
6903 Rockledge Drive
Bethesda, Maryland 20817
Terms and Definitions
I.
Introduction
1
II.
Functional Areas
2
1.0
Organization Plan
3
1.1
Objective
3
1.2
Implementation Requirements
3
2.0
Management Controls and Oversight
4
2.1
Objective
4
2.2
Implementation Requirements
4
3.0
Operations
4
3.1
Objective
4
3.2
Implementation Requirements
4
4.0
Engineering/Construction
5
4.1
Objective
5
4.2
Implementation Requirements
6
5.0
Training and Qualification
6
5.1
Objective
6
5.2
Implementation Requirements
6
6.0
Quality Assurance
7
6.1
Objective
7
6.2
Implementation Requirements
7.0
Maintenance
8
7.1
Objective
8
7.2
Implementation Requirements
8
Radiation
Protection
8
8.1
Objective
8
8.2
Implementation Requirements
9
9.0
Nuclear Criticality Safety
11
9.1
Objective
11
9.2
Implementation Requirements
11
10.0
Fire Protection
12
10.1
Objective
12
10.2
Implementation Requirements
14
11.0
Environmental Protection
16
11.1
Objective
16
11.2
Implementation Requirements
16
12.0
Nuclear Material Safeguards
17
12.1
Objective
17
12.2
Implementation Requirements
17
13.0
Emergency Preparedness
18
13.1
Objective
18
13.2
Implementation Requirements
18
14.0
Waste Management
19
14.1
Objective
19
14.2
Implementation Requirements
19
15.0
Safety Analysis
20
15.1
Objective
20
15.2
Implementation Requirements
20
16.0
Security
20
16.1
Objective
21
16.2
Implementation Requirements
21
17.0
Chemical Safety
24
17.1
Objective
24
17.2
Implementation Requirements
24
18.0
Packaging and Transportation
25
18.1
Objective
25
18.2
Implementation Requirements
25
I.
INTRODUCTION
The U. S. Department of Energy (DOE) will exercise regulatory oversight and enforcement
pursuant to 10 CFR Part 820, 10 CFR Part 824, and this Regulatory Oversight Agreement (ROA)
for activities undertaken by the Corporation in removing material and equipment from the
Gas Centrifuge Enrichment Plant (GCEP) Leased Premises at the Portsmouth Gaseous Diffusion
Plant (Portsmouth GDP) site in Piketon, Ohio. In addition, DOE will exercise regulatory
oversight for the gas centrifuge activities of the Corporation not regulated by the U. S.
Nuclear Regulatory Commission (NRC). The transition of regulatory responsibility from the
DOE to NRC will be documented in a Memorandum of Understanding (MOU).
DOE will exercise its oversight authority both by contract (lease) and by DOE regulations.
Under the requirements of this GCEP ROA, DOE will provide contractual requirements for
health and safety and common defense and security. The enforcement process identified in
Appendix B of this exhibit will apply to any ROA violations of the GCEP ROA contract
(lease) requirements.
DOE regulations for nuclear safety management, including quality assurance, are found in 10
CFR Part 830 and DOE Nuclear Safety Requirements for worker radiation protection in 10
CFR Part 835. USEC requested and has been granted an exemption to the requirements of 10
CFR Parts 830 and 835. As such, the Corporation shall perform the gas centrifuge
activities related to quality assurance and worker radiation protection, not under the
regulation of NRC, in accordance with the conditions specified in the 10 CFR Part 830 and
10 CFR Part 835 Exemption Decisions dated February 2, 2004, as amended, and February 3,
2004, as amended, respectively and as established in this ROA. The enforcement procedures
of 10 CFR Part 820, Appendix A and relevant OPAE Enforcement Guidance Supplements will
apply to any potential violations related to the requirements of the 10 CFR Parts 830 and
835 exemptions. The enforcement process of 10 CFR Part 824 will apply to any potential
violations related to Classified Information.
USEC has the responsibility for protection of health and safety and provision of adequate
safeguards and security for all activities performed by USEC or its contractors in
connection with the removal of equipment and material from the GCEP Leased Premises. NRC
programs reviewed and approved in accordance with 10 CFR Part 76, contained in the
Certification Application, satisfy the requirements of the GCEP ROA for protection of
health and safety. USEC Inc. has responsibility for protection of health and safety and
provision of adequate safeguards and security for all activities performed by USEC Inc., or
its contractors in connection with any refurbishment/construction for the Lead Cascade and
pre-construction activities in the subleased GCEP facilities and the installation of
equipment for the American Centrifuge Plant (ACP). DOE will have regulatory oversight of
health, safety and safeguards and security at the GCEP Leased Premises and/or activity,
unless the NRC assumes regulation. DOE regulatory oversight of the GCEP includes serving
as the cognizant security agency for USEC Inc.s subcontractor/vendor/partner facilities
performing work related to the American Centrifuge Program.
Unless NRC assumes regulation of the GCEP Leased Premises and/or activity, the DOE
Regulatory Oversight Manager will oversee regulation of the gas
centrifuge facilities for those applicable requirements of this ROA. The DOE OPAE will
conduct any
investigations of potential regulatory violations of the 10 CFR Parts 830 and 835 exemption
requirements. OPAE will, if applicable, issue enforcement actions in accordance with
OPAEs statutory authority, policies, and processes. The DOE Regulatory Oversight Manager
will work with and provide support in the implementation of OPAEs enforcement program.
USEC Inc. will be developing programs and documentation as required by the License
Application during the time that the equipment removal, refurbishment/construction of the
Lead Cascade, and any pre-construction activities are occurring in preparation for the
construction and operation of the ACP. These will be used by USEC Inc., to meet the
requirements of 10 CFR Part 70 and the License Application. These satisfy the requirements
of the GCEP ROA for protection of health and safety, with the exception of safeguards and
safety. A transition from DOE to NRC regulation will occur prior to the commencement of
construction of the ACP, unless specific activities in specific facilities warrant
remaining under DOE regulatory oversight for an additional period of time. In this case,
the facility would transition to NRC regulation on a mutually agreed to schedule.
In preparing the GCEP Leased Premises for deployment of the gas centrifuge technology prior
to NRC regulation, DOE will regulate these activities pursuant to this GCEP ROA. This
document defines the set of safety and safeguards and security requirements which will
protect public and worker health and safety and assure adequate safeguards and security for
the activities to be undertaken by the Corporation that are subject to DOE regulatory
oversight at the GCEP Premises leased by DOE to the Corporation in support of deployment of
the centrifuge technology at the GCEP Leased Premises. These requirements and the
implementation of these requirements form the basis of DOE regulatory oversight and will
result in safe activities in the GCEP Leased Premises. As appropriate, the source document
for the objective and/or the implementation requirement has been provided. Only the
objective and/or the implementation requirement included from the source document is a
requirement of the GCEP ROA.
II.
FUNCTIONAL AREAS
This section describes the envelope of operating requirements that are required and
considered necessary to protect the health and safety of the public and facility workers
and safeguards and security. Reviews by DOE subject matter experts have confirmed that
implementation of these requirements will contribute to the safety of activities in support
of the GCEP Leased Premises. The safety and safeguards and security requirements have been
defined for eighteen topical areas. The objective of each of the eighteen topical areas is
provided followed by a set of Implementation Requirements defining actions necessary to
satisfy the objective.
1.0
ORGANIZATION PLAN
1.1
Objective
1.2
Implementation Requirements
1.2.1
Activities conducted in the GCEP Leased Premises shall have current
plans, procedures or other appropriate documentation, which clearly
define authority, responsibility, and accountability for safe operations.
The current plans, procedures, or appropriate documentation shall
contain the following elements:
1.2.1.1
Authority for safety clearly defined for each position of
responsibility.
1.2.1.2
Responsibility for safety clearly delineated in each position
description and in each roles and responsibility document.
1.2.1.3
Programs and procedures will be established for the following
functions (if applicable to the activities subject to DOE regulatory
oversight):
1.2.1.3.1
nuclear safety design
1.2.1.3.2
nuclear criticality safety
1.2.1.3.3
fire protection
1.2.1.3.4
natural phenomena hazards mitigation
1.2.1.3.5
safeguards and security
1.2.1.3.6
personnel selection and training program
1.2.1.3.7
quality assurance
1.2.1.3.8
radiation protection
1.2.1.3.9
preparation of safety documentation
1.2.2
Quality assurance, radiation protection, and preparation of
safety documentation (e.g., safety evaluations) activities shall be independent of
equipment removal, installation, and refurbishment activities.
1.2.3
All personnel shall have the authority to halt unsafe activities.
2.0
MANAGEMENT CONTROLS AND OVERSIGHT
2.1
Objective
2.2
Implementation Requirements
2.2.1
Procedures and documents important to Safety and Health and Safeguards and Security shall be developed, revised, reviewed, approved,
distributed, and implemented in accordance with identified, written
requirements and authorizations.
2.2.2
An internal and independent safety review process shall be established and
maintained.
2.2.3
Occurrences shall be reported and investigations conducted on events that
could affect the health and safety of the public or endanger the health and safety
of workers.
2.2.4
A commitment tracking system shall be maintained to monitor the status of
formal commitments to improve safety and safeguards and security.
2.2.5
Administrative controls shall provide standard methods and requirements for
creating, collecting, maintaining, and disposing of records related to nuclear
safety and safeguards and security.
2.2.6
Management shall develop and implement a formal, organized process whereby
people plan, perform, assess, and improve the safe conduct of work.
3.0
OPERATIONS
3.1
Objective
3.2
Implementation Requirements
3.2.1
Material possession limits and operating bounds for safety systems as
established by the Authorization Basis documents shall be observed.
3.2.2
Surveillance requirements, as established in the Authorization Basis, shall
be conducted as specified. Additional tests to verify proper operation of systems
and integrity of confinement structures shall be conducted after significant
maintenance/modifications as specified in any post-maintenance/modification testing
procedures.
3.2.3
Procedures or work instructions shall be prepared to facilitate initial and
periodic tests of safety features and/or systems to ensure it operates and meets
design objectives.
3.2.4
Prior to or during any type of activity, management shall assess equipment
and personnel performance through a program of monitoring and facility walk downs.
3.2.5
Turnovers conducted for selected shift stations shall ensure the effective
and accurate transfer of information between shift personnel.
3.2.6
Management shall ensure that proposed changes to facilities and activities
subject to DOE regulatory oversight outside the approved Authorization Basis are
not implemented without the prior approval of DOE. Proposed changes which may
affect the operation of the Lead Cascade or ACP will be subject to NRC
requirements.
3.2.7
Management shall ensure that As Found conditions outside the approved
Authorization Basis are reported to DOE. Appropriate engineering reviews and
safety assessments will be performed and submitted to DOE for review and approval.
As Found conditions outside of the Authorization Basis for operation of the GCEP
Leased Premises under the NRC license will be addressed in accordance with NRC
requirements.
4.0
ENGINEERING/CONSTRUCTION
4.1
Objective
4.2
Implementation Requirements
4.2.1
Procedures and controls shall be established under a graded approach to
ensure appropriate reviews of the following:
4.2.1.1
Each change to procedures or equipment design impacting safety
systems to ensure the adequacy of configuration control, radiation
protection, criticality systems, safety and health, and safeguards and
security considerations and to maintain appropriate limits.
4.2.1.2
Each procurement document for safety systems to ensure that it
contains appropriate information on established radiological safety
requirements and to ensure that vendors shall supply equipment that will
perform under expected service conditions.
4.2.1.3
Reviews will be done for those activities, which have the
potential to impact worker safety.
4.2.1.4
Listings of all changes to facility and equipment safety systems
evaluated using engineering reviews and safety assessments and the
configuration change control process shall be maintained for each calendar
year. Appropriate documentation shall be made available for DOE regulatory
review in a timely manner, if requested
4.2.2
Controls for radiation protection shall implement physical design features to
minimize radiological exposure to As Low As Reasonably Achievable (ALARA).
4.2.3
Engineering reviews of proposed changes to activities subject to DOE
regulatory oversight which involve an unreviewed safety question are submitted to
DOE in a timely manner for review and approval prior to implementation.
5.0
TRAINING AND QUALIFICATION
5.1
Objective
5.2
Implementing Requirements
5.2.1
Each Corporation manager shall define the required training needs and assure
completion of training of their subordinates consistent with their job.
5.2.2
Corporation personnel and visitors or contractors shall successfully complete
General Employee Training (GET) and any specific training in the areas listed below
before they are granted unescorted access to controlled areas.
5.2.2.1
Radiological, criticality, chemical and industrial safety hazards
and rules;
5.2.2.2
Emergency Preparedness; and
5.2.2.3
Safeguards and security.
5.2.3
Corporation personnel shall successfully complete radiation protection
training before they are granted unescorted access to radiological areas.
5.2.4
Corporation personnel shall successfully complete applicable training for the
safety aspects associated with the activities to be performed.
5.2.5
Corporation personnel shall successfully complete safeguards and security
training, retraining and re-qualification at established intervals.
5.2.6
Training requirements shall be defined and listed on the applicable Training
Requirements Matrices (TRMs). Training shall be provided to supervisors and
managers with respect to their responsibilities in the areas of safety, health and
safeguards and security.
5.2.7
Selection and qualification of quality assurance personnel involved in
inspection, tests, independent assessments, and audits shall meet the requirements
specified in the Quality Assurance Program (QAP).
6.0
QUALITY ASSURANCE
6.1
Objective
7.0
MAINTENANCE
7.1
Objective
7.2
Implementation Requirements
7.2.1
A graded corrective and preventive maintenance program shall be implemented
to ensure that timely maintenance is performed on safety systems and safeguards and
security equipment.
7.2.2
A graded instrument calibration program, employing standards traceable to the
national standards system or to nationally accepted standards, shall be implemented
for the calibration of equipment and monitoring devices necessary for the proper
maintenance and operation of safety systems and safeguards equipment.
8.0
RADIATION PROTECTION
8.1
Objective
8.2
Implementation Requirements
8.2.1
A radiation control program that defines steps to be taken to limit
exposure of workers and the public shall be established.
8.2.2
Line management shall ensure that radiological activities are conducted in
accordance with radiation protection instructions and procedures.
8.2.3
Radiation protection personnel, independent of organizations responsible for
equipment removal or installation, shall be provided to guide and assist line managers in
fulfilling their radiation protection responsibilities.
8.2.4
A radiation protection manager shall be provided to advise and consult with line
managers and to guide the radiation protection activities.
8.2.5
Instructions concerning all the activities of radiation protection technicians shall
be provided. Radiation protection procedures for the control and use of radioactive
materials and radiation- generating devices shall provide for safe operations.
8.2.6
A formally structured, auditable ALARA program with established milestones to ensure
that exposures are maintained at ALARA levels shall be in place.
8.2.7
A respiratory protection program to limit the intake of airborne radioactive
materials and to protect employees from potentially hazardous atmospheres shall be
established.
8.2.8
A bioassay system shall be established that will evaluate Committed Effective Dose
Equivalents (CEDE) to personnel who are occupationally exposed to radiation with the
likelihood to receive an exposure of 100 mrem or greater.
8.2.9
Engineering and administrative controls and personal protective equipment shall be
used to control the exposure of employees to internal radiation sources; occupational
exposures shall be evaluated and recorded when the potential exposure could exceed 2% of
the regulatory limit in a year.
8.2.10
Employee exposure to external radiation sources shall be controlled using postings,
interlock systems, monitoring, shielding, and surveys. Occupational exposures shall be
evaluated and recorded when the
potential exposure could exceed 2% of the annual limit for effective dose
equivalent in a year. Exposure of extremities and the skin shall be evaluated as
appropriate.
8.2.11
Radiation areas, high radiation areas, very high radiation areas, contamination
areas, high contamination areas, airborne radioactivity areas, and radioactive materials
(storage) areas shall be prominently and distinctly marked to preclude inadvertent or
unknowing entry by employees, visitors, and contractors.
8.2.12
Plant alarms to alert personnel in and around facilities of emergency
conditions or impending hazards shall be provided.
8.2.13
The radiation monitoring and contamination control program shall ensure worker
protection from radiation exposures. Sources of radioactive contamination shall be
controlled at the source and steps shall be taken to limit the extent of contamination.
The extent of contaminated areas shall be limited by vigorous decontamination efforts.
8.2.14
Airborne radioactive materials, surface contamination, and external radiation
exposures shall be monitored and surveyed to assure that employee internal accumulations
of radioactive materials can be routinely estimated and to ensure that exposures are at
ALARA levels.
8.2.15
Personnel dosimetry shall be used and maintained so that results will be accurately
determined.
8.2.16
A formal inventory program to account for nonexempt by-product material sources and
to provide for their control, movement, and leak testing shall be maintained.
8.2.17
Provisions shall be made to provide for oversight of radiation protection
programs. The audit program for both routine operations and unusual radiological
occurrences shall provide for adequate assessment of performance.
8.2.18
A Radiation Work Permit (RWP) system to ensure that radiation exposure and
contamination controls are applied to all activities involving entry into radiation,
airborne radioactivity, and contamination areas and to other work areas with radioactive
materials, shall be established.
8.2.19
Radiation protection instructions to workers such as RWPs shall be
available for review at the entry of the work area to which they apply.
8.2.20
Radiation measuring instruments used to evaluate hazards or define employee
exposure shall be subject to periodically scheduled maintenance and calibration in
accordance with approved procedures; the sources of radiation used to calibrate
these instruments will be National Institute of Standards and Technology (NIST)
traceable.
8.2.21
Employees shall be provided with an annual report of their occupational
exposure history and visitors shall be provided with information with
respect to their exposure. Summary exposure information shall be reported
annually.
8.2.22
Records related to occupational radiation exposure shall be maintained in a
manner that permits easy recovery of the data, allows for trend analysis, and aids
in the protection of the individual and the control of radiation exposure.
8.2.23
In addition to radiological protection, an occupational health program
shall be established to oversee, promote, and protect the radiological and
non-radiological health of plant personnel.
9.0
NUCLEAR CRITICALITY SAFETY
9.1
Objective
9.2
Implementation Requirements
9.2.1
The GCEP Leased Facilities have been previously used for enrichment
processing with centrifuge machines. Residual contamination of process equipment
is present that could have NCS Implications, where enrichment exceeded 1 percent
U
235
. Therefore, a two-part approach is required to be implemented.
First, NCSEs/As and controls (if any) must be maintained during the equipment
removal phase to ensure that possible criticality contingencies are controlled.
Second, the activities subject to DOE regulatory oversight must be evaluated
through an NCS program to provide engineering and administrative controls to
demonstrate the safety of the proposed activities. The requirements are:
9.2.1.1
Develop an NCS Program that ensures activities with fissionable
material remain sub-critical under all normal and credible abnormal
conditions.
9.2.1.2
NCSEs/As shall be performed and/or maintained consistent with the
requirements of the NCS Program.
9.2.1.3
Nuclear Critical Accident Alarm System meeting the requirements of
ANS 8.3 shall be provided if required by the NCS Program for coverage of
areas involving credible criticality accidents.
9.2.1.4
Technical Requirements or equivalent (if required) shall specify
actions to be taken in the event of an inoperable Nuclear Criticality
Accident Alarm System.
10.0
FIRE PROTECTION
10.1
Basic Objective
The Fire Protection Program shall ensure that no undue threats to the public or
employees will result from fire and resultant perils.
The fire protection program will comply with the following standards for
modifications to the GCEP Leased Premises that affects the fire protection system:
DOE O 420.1A, Section 4.2, Fire Protection, NFPA 10-1990, Portable Fire
Extinguishers, NFPA 13-1989, Standard for the Installation of Sprinkler Systems;
NFPA 15-1990, Water Spray Systems; NFPA 24-1992, Private Fire Service Mains; and
NFPA 30-1990, Flammable Liquids. Any deviations found during future modifications
will be documented and justified by the Authority Having Jurisdiction (AHJ) or
corrective action will be taken.
10.1.1
The fire protection program shall have the following features:
10.1.1.1
A policy statement that incorporates the requirements of this
section, related DOE directives, and other applicable
Federal, state, and local fire protection requirements.
The statement shall affirm managements commitment to
support a level of fire protection and fire suppression
capability sufficient to minimize losses from fire and
related hazards consistent with the best class of
protected property in private industry.
10.1.1.2
Comprehensive, written fire protection criteria that reflect
additional site-specific aspects of the fire protection program, including
the organization, training, and responsibilities of the fire protection
staff, administrative aspects of the fire protection program, and
requirements for the design, installation, operability, inspection,
maintenance, and testing of fire protection systems.
10.1.1.3
Written fire safety procedures governing the use and storage of
combustible, flammable, radioactive, and hazardous materials so as to
minimize the risk from fire. Such procedures shall also exist for fire
protection system impairments and for activities such as smoking, hot
work, safe operation of process equipment, and other fire prevention
measures which contribute to the decrease in fire risk.
10.1.1.4
A system to ensure that the requirements of the DOE fire
protection program are documented and incorporated in the plans and
specifications for all new facilities and for significant modifications of
existing facilities. This includes a documented review by a qualified
fire protection engineer of plans, specifications, procedures, and
acceptance test.
10.1.1.5
Fire hazard analyses (FHAs) or equivalent
1
shall be
developed for all nuclear facilities, significant new facilities, and
facilities that represent unique or significant fire safety risks. The
FHA shall be developed using a graded approach. The conclusions of the
FHA shall be incorporated in the Facility Accident Analysis and shall be
integrated into design basis and beyond design basis accident conditions.
10.1.1.6
Access to a qualified and trained fire protection staff,
including a fire protection engineer(s), technicians, and fire fighting
personnel to implement the fire protection requirements.
1
or equivalent will require a submittal of documentation of equivalency by USEC
and approval by DOE.
10.1.1.7
A baseline needs assessment or equivalent
2
that
establishes the minimum required capabilities of site fire fighting
forces. This includes minimum staffing, apparatus, facilities, equipment,
training, fire pre-plans, off-site assistance requirements, and
procedures. Information from this assessment shall be incorporated into
the site Emergency Plan.
10.1.1.8
Written pre-fire strategies, plans, and standard operating
procedures to enhance the effectiveness of site fire fighting forces,
where provided. Such procedures shall include those governing the use of
fire fighting water or other neutron moderating materials to suppress fire
within or adjacent to moderation controlled areas. Restrictions on the
use of water shall be fully justified on the basis of criticality safety.
10.1.1.9
A comprehensive, documented fire protection self-assessment
program, which includes all aspects (program and facility) of the fire
protection program. Assessments shall be performed on a regular basis at
an established frequency.
10.1.1.10
A program to identify, prioritize, and monitor the status of
fire protection-related appraisal findings/recommendations until final
resolution is achieved. When final resolution will be significantly
delayed, appropriate interim compensatory measures shall be implemented to
minimize the fire risk.
10.1.1.11
A process for reviewing and recommending approval of fire safety
equivalencies and exemptions to the AHJ for fire safety.
10.2
Implementation Requirements
10.2.1
The Fire Protection Program shall be under the direction of an individual
who has been assigned as AHJ commensurate with the responsibilities of the
position.
10.2.2
Fixed fire suppression systems, where provided, shall be tested and
maintained such that fires in those areas are controlled promptly.
10.2.3
Automatic fire suppression systems shall be provided for areas containing
2
or equivalent will require a submittal of documentation of equivalency by USEC
and approval by DOE
safety systems and for all areas subject to significant life safety hazards.
10.2.4
A reliable water supply, with sectional isolation valves shall be maintained.
10.2.5
Closing of valves supplying fire suppression systems shall be controlled by a
written permit system.
10.2.6
A fire department shall be maintained as an acceptable means of redundant
fire protection.
10.2.7
Fire Department personnel shall be available at all times and shall be trained
and equipped to handle anticipated types of fires and other emergencies.
10.2.8
Mobile fire apparatus that is required to support fire-fighting operations shall
be provided and maintained.
10.2.9
Breathing air used in fire fighting shall meet a minimum quality of Grade D.
10.2.10
On-site fire protection support shall be available to evaluate the fire
hazards of changes to maintenance and process systems.
10.2.11
A fire protection review of design documents for new facilities and for
modifications to existing facilities shall be made to insure that fire protection
issues have been properly addressed.
10.2.12
Fire protection appraisals of important buildings shall be conducted
periodically to identify changes that adversely impact existing fire protection levels.
Means of emergency egress shall be regularly inspected for all areas that are normally
occupied. Personnel who are trained and knowledgeable in detecting fire hazards shall
conduct periodic inspections of all important buildings and other structures.
10.2.13
All fires shall be investigated and root causes determined.
10.2.14
Portable fire extinguishers shall be available throughout the plant
commensurate with the hazard.
10.2.15
A fire alarm system that reports to a continuously manned location shall monitor
fire alarms in all important buildings and structures.
10.2.16
Welding/burning/hot work shall be controlled by a written permit system to
minimize the fire hazards of open flame equipment.
10.2.17
Emergency medical services shall be provided to assure proper emergency
care of injured employees.
10.2.18
Noncombustible or fire-resistive construction shall be utilized, where
appropriate. Also, complete fire-rated barriers that are commensurate with the fire hazard
to isolate hazardous occupancies and to minimize spread shall be utilized, as required.
10.2.19
A means to notify and evacuate building occupants in the event of a fire, such
as a fire detection or fire alarm system and illuminated, protected egress paths shall be
provided.
10.2.20
Physical access and appropriate equipment to facilitate effective intervention
by the fire department, such as an interior standpipe system(s) in multi-story or large
facilities with complex configurations, shall be provided.
10.2.21
A means to prevent the accidental release of significant quantities of
contaminated products of combustion and fire fighting water to the environment, such as
ventilation control and filter systems and curbs and dikes, or equivalent
3
shall
be provided. Such features would only be necessary if required by the FHA or safety analysis
in conjunction with other facility or site environmental protection measures.
10.2.22
Fire and related hazards that are unique to GCEP and are not addressed by
industry codes and standards shall be protected by isolation, segregation, or use of special
fire control systems, such as inert gas or explosion suppression, as determined by the FHA,
shall be provided.
10.2.23
Fire protection systems shall be designed such that their inadvertent operation,
inactivation, or failure of structural stability will not result in the loss of vital safety
functions or inoperability of safety class systems as determined by the safety analysis.
11.0
ENVIRONMENTAL PROTECTION
11.1
Objective
11.2
Implementation Requirements
3
or equivalent will require a submittal of documentation of equivalency by USEC
and approval by DOE.
11.2.1
A mitigation/spill prevention, control and countermeasures program shall be
maintained to prevent releases to the environment.
11.2.2
Environmental monitoring shall be implemented if required by applicable
regulations or permits. The monitoring will determine the effects, weather impacts,
and personnel exposure and collect required sampling and analysis data relative to
releases to the environment of hazardous effluents.
11.2.3
Monitoring data, including data, for emergency reporting where regulatory
limits are exceeded will be collected and reported as required under applicable
regulations and permits.
12.0
NUCLEAR MATERIAL SAFEGUARDS
12.1
Objective
12.2
Implementation Requirements
12.2.1
Written plans and procedures that identify the strategies, mechanisms, and
commitments to protect NM from unauthorized removal, to account for NM, to prevent
unlicensed enrichment of nuclear material to special nuclear material; and to
protect NM facilities against radiological sabotage.
12.2.2
A system for tracking, accounting for, and reporting to the Nuclear
Materials Management System and Safeguards (NMMSS), all reportable quantities of
nuclear material.
12.2.3
A measurement control program, providing for the degree of measurement
control for ensuring that equipment used to measure nuclear materials is properly
calibrated using standards traceable to national standards and for supporting the
estimation of the contribution of measurement certainty to inventory difference.
12.2.4
If applicable, physical barriers, vaults, intrusion detection systems, and
access controls designed to protect NM from access by unauthorized
personnel or from unauthorized removal.
12.2.5
A system of independent audits and assessments to verify the effectiveness
of the elements of the Nuclear Material Control & Accountability (NMC&A) program,
including measurement controls, material controls, and accounting systems.
12.2.6
A system of performance testing to verify the effectiveness of the nuclear
materials protection program, as required.
12.2.7
Written Plans and procedures to ensure implementation of Voluntary
agreements and the Additional Protocol between the United States of America and the
International Atomic Energy Agency while protecting site safeguards and security
interests.
13.0
EMERGENCY PREPAREDNESS
13.1
Objective
13.2
Implementation Requirements
13.2.1
An individual shall be designated responsibility for implementation of the
Emergency Management Program at PORTS as it pertains to the Corporation Lead
Cascade/ACP and clean-up activities. Responsibilities of any project individuals
supporting the PORTS Emergency Preparedness Program shall be clearly defined.
13.2.2
A hazards assessment shall be developed and maintained for use in emergency
planning. This assessment shall consider the broad spectrum of events that could
affect the facilities and be used in the development of the Emergency Management
Plan.
13.2.3
An Emergency Management Plan shall be developed and maintained as a
controlled document. The Emergency Management Plan and its associated support
documents shall be reviewed annually and updated as necessary.
13.2.4
In coordination with the DOE site personnel, provisions shall be made for
recovery from an emergency in the GCEP Leased Premises and re-entry into the
buildings. These provisions shall include specific procedures for
termination of an emergency, dissemination of information, establishment
of a recovery team, and criteria for resumption of activities in support
of the Lead Cascade/ACP.
13.2.5
In coordination with the DOE site personnel, training for any project
emergency response individuals on their duties in the emergency response plan shall
be identified and maintained on an established schedule.
13.2.6
Project emergency response individuals shall participate in site
emergency response exercises, as requested.
14.0
WASTE MANAGEMENT
14.1
Objective
14.2
Implementation Requirements
14.2.1
The safety and health of the public shall be protected by managing
activities in support of the Lead Cascade/ACP, clean-up, and related operations in
a manner that provides for the safe handling, transportation, and storage of
hazardous, radioactive, or mixed wastes generated. This is accomplished by managing
hazardous, radioactive, or mixed wastes according to the requirements of the Atomic
Energy Act (AEA) and applicable state requirements.
14.2.2
A Waste Minimization Program shall be implemented to segregate, substitute,
and minimize the amount of waste requiring disposal.
14.2.3
All hazardous, radioactive, and mixed wastes shall be characterized with
sufficient accuracy to permit segregation, handling, and transfer to
treatment, storage, or disposal facilities (TSD). Additional
characterization needed to ensure the actual physical and radiological
characteristics meet the waste acceptance criteria (WAC) of an off-site TSD
facility shall be performed prior to shipment to an offsite TSD facility.
14.2.4
An operating record-keeping system shall be developed and maintained to
document the following: (1) a historical record of waste generated, treated,
stored, shipped, and/or disposed of; (2) data necessary to show that the waste was
properly classified, treated, stored, shipped, and/or disposed of; and (3) waste
manifests.
14.2.5
A program will be in place to inspect off-site treatment storage and
disposal facilities and practices.
15.0
SAFETY ANALYSIS
15.1
Objective
15.2
Implementation Requirements
15.2.1
Determine the facility preliminary classification by maximum quantity of
nuclear material included in the design.
15.2.2
Perform hazards evaluation, accident analysis, and determine controls and
document. The design must provide for adequate protection against natural phenomena
with consideration of the most severe documented historical events for the site.
(10 CFR 70.64)
15.2.3
Establish an unreviewed safety question evaluation process or
equivalent to prevent inadvertent change to documented safety analysis or any of
its basis or conclusions.
15.2.4
Document controls from the safety analysis in technical safety
requirements or equivalent.
15.2.5
Conduct activities consistent with procedures and /or work instructions, as
required by the Quality Assurance Program.
16.0
SECURITY
16.1
Objective
16.2
Implementation Requirements
16.2.1
Measures to ensure effective management and implementation of the security
plans shall be developed and implemented. These include:
16.2.1.1
Documented security plans: DOE O 470.4, and DOE M470.4-2, Chg 1.
16.2.1.2
Utilization of a protective force as appropriate, the armed, uniformed
members of which are trained and qualified under a DOE certified program:
DOE/USEC Arming and Arrest Authority Security Plan, as amended.
16.2.1.3
Conformance to measures to control the issuance and use of security
badges, credentials, and shields: DOE O 470.4-2, Chg 1.
16.2.1.4
Program of security systems performance testing: DOE O 470.4 and DOE O
473.2. Program for the inquiry and reporting to DOE of incidents of security
concern: DOE O 470.4.
16.2.1.5
Changes to the GCEP leased premises/equipment that could
directly/indirectly affect Safeguards and Security shall require a Decreased
Effectiveness Evaluation (DEE) of the affected security plan(s). Safeguards and
security plan changes shall be evaluated to ensure that the personnel safety is
unaffected.
16.2.2
Documented measures to protect classified information and materials from loss
or unauthorized disclosure shall be developed and implemented. These include:
16.2.2.1
Programs for facility clearances and registration of safeguards
and security activities. (DOE O 470.4)
16.2.2.2
Program ensuring timely submittal of information for Foreign
Ownership, Control or Influence (FOCI) determinations. (DOE O 470.4)
16.2.2.3
Measures to identify classified information: DOE O 200.1, DOE M
475.1-1A.
16.2.2.4
Controls of classified documents and information: DOE M 470.4-4.
16.2.2.5
Physical protection measures for classified information and material:
DOE M 470.4-4.
16.2.2.6
Controls for hand carrying of classified matter on air carriers:
DOE M 470.4-4.
16.2.2.7
Personnel security program to limit access to classified information
and materials to appropriately cleared individuals with a need to know: DOE M
470.4-5, DOE M 472.1-1B.
16.2.2.8
Security education and awareness program: DOE O 470.4.
16.2.2.9
Communications security program: DOE O 200.1, DOE M 200.1-1, DOE G
200.1-1.
16.2.2.10
Classified computer security program: DOE M 470.4-4, DOE M 471.2-2.
16.2.2.11
Controls on classified visits: DOE O 470.4.
16.2.2.12
Technical surveillance countermeasures program: DOE M 470.4-4 and DOE
TSCM Procedural Manual.
16.2.3
Documented measures to protect unclassified sensitive information and materials
from loss or unauthorized disclosure shall be developed and implemented. These include:
16.2.3.1
Operations security program: DOE M 470.4-4.
16.2.3.2
Information security program: DOE M 470.4-4.
16.2.3.3
Counterintelligence program, provided by the Oak Ridge Office of
Counterintelligence: DOE O 475.1.
16.2.3.4
Guidelines on Export Control and Nonproliferation, July 1999, U.S.
Department of Energy.
16.2.3.5
Measures to identify, control, and protect unclassified
controlled nuclear information (UCNI): DOE O 471.1A, DOE M 471.1-1, Chg
1.
16.2.3.6
The Corporation will submit an unclassified computer security
plan for DOEs approval. Upon approval, this plan will represent the
unclassified computer security standards to which the Corporation will
conform (DOE O 205.1, DOE N 205.2, DOE P 205.1, DOE N 205.3, DOE N 205.8,
DOE N 205.9, DOE G 205.1-1, DOE M 205.1.1).
16.2.3.7
Program to control unclassified visits and assignments by foreign
nationals: DOE O 142.3.
16.2.3.8
Measures to identify, control, and protect Official Use Only
(OUO) information, as appropriate: DOE O 471.3, DOE G 471.3-1, DOE M
471.3-1.
16.2.4
A documented program shall be implemented to ensure that those individuals
requiring a DOE-issued Weapons Authorization Card have met the necessary
requirements for a Security Police Officer.
4
The program for issuance
of Weapons Authorization Cards shall include the following elements:
16.2.4.1
A documented program providing the level of information mandated
by the Code of Federal Regulations and DOE Orders and Directives for the
issuance of Weapons Authorization Cards. (10 CFR 1046, 10 CFR 1047, DOE O
473.2, DOE M 470.4-3, Chg 1)
5
16.2.4.2
A documented program for medical, physical fitness training, and
firearms that certifies each individual for a Weapons Authorization Card.
(10 CFR 1046.12, 10 CFR 1046.13, 10 CFR 1046.16, DOE O 473.2, DOE M
470.4-3, Chg 1)
16.2.4.3
Access authorization commensurate with the level of classified
matter access. (10 CFR 1046.14, DOE O 473.2, DOE M 470.4-3, Chg 1)
4
Within 60 days after issuance of any new DOE orders addressing DOE security
interest at Portsmouth, the DOE Regulatory Oversight Manager will inform USEC of the issuance of
the new order(s). This notification shall be considered to be a modification the Regulatory
Oversight Agreement (ROA
)
. USEC shall come into compliance with such modifications to the ROA
within the time specified and directed by DOE.
5
The citation of specific DOE orders in Section 16.2.1 is applicable to the
date of this revision to the ROA. Compliance with current DOE orders shall be maintained as
indicated in Note 4 to Section 16.2.
16.2.4.4
A documented continuing physical fitness training program. (DOE
Medical and Fitness Implementation Guide, dated March 1991, 10 CFR Part
1046)
16.2.4.5
A documented program on the use of limited arrest authority and
use of force by a Security Police Officer. (10 CFR Part 1047, DOE O 473.2,
DOE M 470.4-3, Chg 1)
16.2.4.6
A documented program that prohibits any individual convicted in
any court of a misdemeanor crime of domestic violence, or discharged under
dishonorable conditions from being issued a Weapons Authorization Card.
[Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208,
Paragraph 658, (1996); Gun Control Act of 1968, 18 U. S. C. Paragraphs 922
(g) (6) and (g) (9), (1997); 27 CFR Part 178]
16.2.4.7
A documented program to ensure that safety policies and
procedures are in place for firearms safety (DOE O 440.1A, DOE O 473.2,
DOE-STD-1091-96)
16.2.4.8
A documented to ensure uniform qualifications and requalification
of a Security Police Officer. (DOE O 473.2, DOE M 470.4-3, Chg 1)
16.2.4.9
Measures to control the issuance and use of security badges,
credentials, and shields. (DOE M 470.4-2, Chg 1)
17.0
CHEMICAL SAFETY
17.1
Objective
17.2
Implementation Requirements
17.2.1
Provide for the adequate storage of chemicals and other hazardous materials.
17.2.2
Provide proper personal protective equipment for personnel handling
hazardous materials.
17.2.3
Ensure hazardous chemicals are adequately identified and
communicated to personnel.
17.2.4
Ensure that the levels of air contaminants within the GCEP Leased Premises
are within the established standards of OSHA.
17.2.5
Provide for chemical related
medical emergency response.
18.0
PACKAGING AND TRANSPORTATION
18.1
Objective
18.1.1
An individual shall be designated to implement a packaging and
transportation program.
18.1.2
Coordinate with PORTS site personnel on movements of UF
6
.
18.2
Implementation Requirements
18.2.1
Packaging and Transportation procedures shall be established and implemented
to:
18.2.1.1
Implement the USDOT and 49 CFR Parts 100-180 requirements for the
offsite transportation of hazardous materials (including environmental
samples), substances and wastes.
18.2.1.2
Ensure the USDOT and 49 CFR Parts 350-399 requirements for the
offsite operation of vehicles with a GVWR of 10,000 lbs or greater.
18.2.1.3
Implement the USDOT, International Civil Aviation Organization
(ICAO), International Air Transport Association (IATA) and 49 CFR Parts
100-180 requirements for the off-site transportation of hazardous
materials (including environmental samples), substances and wastes via
aircraft.
18.2.1.4
Ensure that transfers of hazardous materials (other than
UF
6
) are to be in USDOT required packaging.
18.2.1.5
Onsite handling procedures and packaging criteria for UF
6
shall be in accordance with USEC-651,
Good Handling Practices
for Uranium Hexafluoride
, or ANSI N14.1.
A.
Shutdown Authority
1.
Clear and Present Danger
2.
Unreviewed Safety Questions
B.
ROA Notice of Violation
C.
ROA Civil Penalties
1.
Prior to imposing any ROA Civil Penalty on the Corporation, the DOE Regulatory
Oversight Manager shall provide to USEC a written ROA Notice of Violation, as
described above, and a Notice of Proposed Imposition of ROA Civil Penalty and shall
state that the ROA Civil Penalty may be paid in the amount specified therein or the
proposed imposition of the ROA Civil Penalty may be protested in its entirety or in
part, by a written answer either denying the ROA Violation or showing extenuating
circumstances. The Corporation agrees to either pay the ROA Civil Penalty in the
amount proposed or answer the Notice Of Proposed Imposition of ROA Civil Penalty
within 30 days of the date of a Notice Of Proposed Imposition of ROA Civil Penalty or
other time specified in that notice. The answer to the Notice of Proposed Imposition
of ROA Civil Penalty shall state any facts, explanations, and arguments, denying the
alleged ROA Violation, or demonstrating any extenuating circumstances, error in the
ROA Notice Of Violation or other reason why the Proposed ROA Civil Penalty should not
be imposed and may request remission or mitigation of the proposed ROA Civil Penalty.
If the Corporation files an answer to the Notice of Proposed Imposition of ROA Civil
Penalty, the DOE Regulatory Oversight Manager, upon consideration of the answer, will
issue a revised Notice of Proposed Imposition of ROA Civil Penalty imposing,
mitigating, or remitting the ROA Civil Penalty. The Corporation agrees to either pay
the ROA Civil Penalty in the amount specified or appeal the decision to the DOE ORO
Manager within 30 days of the issuance of that revised Notice of Proposed Imposition
of ROA Civil Penalty. Any appeal shall be presented in writing, with an opportunity
for the Corporation to be heard, if so requested.
2.
The amount of the ROA Civil Penalty imposed shall be based upon the severity of the
ROA Violation, including the potential for the ROA Violation to affect the public
health and safety or the common defense and security and whether it was a repeat ROA
Violation, the actions taken to respond to the ROA Violation, and any extenuating
circumstances. ROA violations of contract (lease) requirements, except the
safeguarding and security of Classified Information, and any ROA civil penalties for
these ROA violations shall be assigned by the DOE Regulatory Oversight Manager, in
accordance with the severity level guidance provided in Appendix A of 10 CFR Part
820. CI violations and CI civil penalties regarding the safeguarding and security of
Classified Information will be assigned in accordance with the requirements of 10 CFR
Part 824.
3.
ROA Civil Penalties imposed on the Corporation pursuant to this Agreement shall not be
subject to reimbursement under Sections 5.3 of ARTICLE V, entitled Allocation of
Liabilities, or ARTICLE X, entitled Price-Anderson Indemnification, of the GCEP
Lease.
D.
Failure to Take Agreed upon Actions
TO ACHIEVE TARGETED TURNOVER DATES IN EXHIBIT A
North
Half Turnover 03/07
1
2
WASHINGTON, D.C. 20585
6903 Rockledge Drive
Bethesda, MD 20817
Inventions owned by DOE or in which DOE has
the right to license or otherwise grant the
right to use that were made or conceived by
DOE employees or by DOE contractor or
subcontractor employees under contracts or
subcontracts awarded by DOE or by its Oak
Ridge, Tennessee facilities contractors, that
pertain to the enrichment of uranium using
gas centrifuge technology, including the
design and fabrication of gas centrifuge
machines and related systems. See Exhibit
A, List of LICENSED INVENTIONS. If either
Party becomes aware of additional inventions
owned by DOE that pertain to gas centrifuge
technology or systems related thereto that
LICENSEE may desire to use for enriching
uranium using gas centrifuge technology, DOE
agrees to take reasonable steps to add those
inventions to this LICENSE, subject to any
licenses that may exist for those inventions.
This LICENSE shall be effective upon the
execution of this LICENSE by both Parties and
shall terminate upon the (i) termination or
expiration of the DOE lease for facilities
used by the LICENSEE for its centrifuge plant
and return of such facilities to DOE or, if
LICENSEE utilizes the LICENSED INVENTIONS on
property not leased from DOE, then upon
|
termination of operations and completion of decontamination and decommissioning of the facility utilizing the LICENSED INVENTIONS; (ii) upon the expiration of all patents on LICENSED INVENTIONS; or (iii) as provided by Paragraph 15 hereto, whichever is earlier. This LICENSE shall be conditioned on LICENSEEs acquiring and maintaining a License from the Nuclear Regulatory Commission for the operation of a gas centrifuge facility. To the extent LICENSEE wants to extend the term of this LICENSE, a grant of an extension will not be withheld unreasonably. | |
|
||
SCOPE OF LICENSE:
|
Nonexclusive license for LICENSEEs use or manufacture (or use or manufacture on the LICENSEEs behalf) of the LICENSED INVENTIONS for the enrichment of uranium in the U.S., or the sale of enriched uranium products, and using the LICENSED INVENTIONS in accordance with the Advanced Technology Demonstration and Deployment milestones contained in Article 3 of the June 17, 2002 Agreement Between DOE and LICENSEE (the June 17, 2002 Agreement). |
2
3
4
5
6
7
UNITED STATES DEPARTMENT OF ENERGY
|
||||
BY: | ||||
Paul A. Gottlieb | ||||
Assistant General counsel
for Technology Transfer and Intellectual Property |
||||
WITNESS:
|
||
|
||
|
USEC, Inc.:
|
||||
BY: | ||||
Phillip G. Sewell | ||||
Senior Vice President
American Centrifuge and Russian HEU |
||||
WITNESS:
|
||
|
||
|
8
DOE CASE FILE NO. | ||
(S-NUMBER) | TITLE OF INVENTION | |
|
||
27604
|
Baffle for Gas Centrifuges | |
|
||
27701
|
Baffle Rotor Assembly for Gas Centrifuge | |
|
||
30005
|
Magnetic Suspension of Centrifuge Rotors | |
|
||
30824
|
Centrifuge Drive System | |
|
||
31130
|
Supercritical Centrifuge Bearing System | |
|
||
31133
|
Improved Baffle for Gas Centrifuge | |
|
||
31607
|
Damping System for Gas Centrifuge | |
|
||
32496
|
Subcritical and Supercritical Gas Centrifuge Drive System and Method | |
|
||
33393
|
Damper-suspension System for Centrifuge | |
|
||
34064
|
Cut-control System for Gas Centrifuge | |
|
||
34622
|
Suspension System for Supercritical Centrifuge | |
|
||
34623
|
Damped Suspension System for Centrifuge | |
|
||
35429
|
Improved End Cap for Centrifuges | |
|
||
36433
|
Rotor Assembly for Gas Centrifuge | |
|
||
36453
|
End Cap-baffle Assembly for Gas Centrifuge | |
|
||
38691
|
Rotor Assembly for Gas Centrifuge | |
|
||
39555
|
High Speed End Closure for Gas Centrifuge Rotor Tube | |
|
||
39571
|
Damper Suspension System for High-speed Gas Centrifuge | |
|
||
40315
|
Gas Removal System for Gas Centrifuge | |
|
||
40321
|
Damped-suspension System for Gas Centrifuge | |
|
||
42323
|
Gas Centrifuge | |
|
||
42366
|
Top Bearing for Gas Centrifuge Rotor | |
|
||
42981
|
Process Gas Control System for Gas Centrifuge | |
|
||
43729
|
Cut-control System for Gas Centrifuge |
Page 1 of 5
DOE CASE FILE NO. | ||
(S-NUMBER) | TITLE OF INVENTION | |
|
||
43732
|
Gas Centrifuge Drive System | |
|
||
43775
|
Cascade Arrangement for Gas Centrifuge | |
|
||
43786
|
Top Suspension for Gas Centrifuge Rotor | |
|
||
44149
|
Suspension System for Gas Centrifuge | |
|
||
44199
|
Damped Suspension System for Centrifuge | |
|
||
45124
|
Gas Centrifuge | |
|
||
45162
|
Gas Centrifuge Seal | |
|
||
45188
|
Centrifuge Malfunction Detection System | |
|
||
45190
|
Bottom Suspension System for Gas Centrifuge | |
|
||
45191
|
Method and Apparatus for Producing End Closures for Gas Centrifuge | |
|
||
45192
|
Tube Fabrication Facility | |
|
||
45194
|
Gas Centrifuge | |
|
||
45711
|
Gas Centrifuge End Cap Assembly | |
|
||
45716
|
Vacuum Seal | |
|
||
45741
|
Damped Suspension System for Centrifuge | |
|
||
45759
|
Gas Centrifuge Having Improved Operating Characteristics | |
|
||
46508
|
Gas Centrifuge Mount | |
|
||
46509
|
Method of Operating Gas Centrifuges to Provide Improved Separative Capacity | |
|
||
46538
|
Suspension System for Gas Centrifuge | |
|
||
47104
|
Centrifuge Malfunction Detection System | |
|
||
47134
|
Gas Centrifuge Scoop Assembly | |
|
||
47893
|
End Cap and Baffle Configuration for a Gas Centrifuge | |
|
||
49065
|
Suspension System for Centrifuge | |
|
||
50033
|
Top Suspension for Gas Centrifuge Rotor |
Page 2 of 5
DOE CASE FILE NO. | ||
(S-NUMBER) | TITLE OF INVENTION | |
|
||
52973
|
Lower Suspension System for Gas Centrifuge | |
|
||
56316
|
Means for Increasing Separative Capacity of Gas Centrifuge | |
|
||
56557
|
Rotor Tube/for Gas Centrifuge | |
|
||
57541
|
Scoop-development Apparatus for Gas Centrifuges | |
|
||
58549
|
Gas Centrifuge Baffle Structure and Method for Making Same | |
|
||
58551
|
Method for Increasing the Separative Performance of a Gas Centrifuge | |
|
||
59959
|
Lower Suspension Vapor Seal for Gas Centrifuge |
DOE CASE FILE NO. | ||
(S-NUMBER) | TITLE OF INVENTION | |
|
||
23190
|
Application of the Gas Centrifuge as an Instrument | |
|
||
24899
|
Ultra Fast Freezing of Centrifuge Particles | |
|
||
25933
|
Dipolar-seal Centrifuge Rotor | |
|
||
25981
|
Seal for Centrifuge | |
|
||
27607
|
Centrifuge Core | |
|
||
27736
|
Ultracentrifuge for Liquids | |
|
||
30099
|
Seal for Low-speed Liquid Centrifuges | |
|
||
30805
|
Centrifuge Instrumentation for Registering | |
|
||
30815
|
Upper Damped Bearing for High Speed Centrifuges | |
|
||
30827
|
Damper Mechanism for Gas Centrifuge | |
|
||
30869
|
Semicontinuous Flow Centrifuge Rotor |
Page 3 of 5
DOE CASE FILE NO. | ||
(S-NUMBER) | TITLE OF INVENTION | |
|
||
30893
|
Method for Lining a Centrifuge Rotor | |
|
||
31602
|
Band-scanner for Liquid Centrifuges | |
|
||
32428
|
Centrifuge for Saline Water Purification | |
|
||
32466
|
Interferometer for the Measurement of Sedimentation in an Ultracentrifuge | |
|
||
34602
|
Multi-shell High Speed Centrifuge | |
|
||
34640
|
Scoop-positioner for Gas Centrifuge | |
|
||
36446
|
Centrifuge Rotor Axial | |
|
||
36447
|
Modal Balancing Supercritical Centrifuge Rotors | |
|
||
37236
|
High-speed End Closure for Gas Centrifuge Rotor Tube | |
|
||
39519
|
Centrifuge Rotor and Method Fabrication | |
|
||
45178
|
Apparatus for Manufacture of Centrifuge Rotors | |
|
||
45179
|
Gas Centrifuge Rotor | |
|
||
45717
|
Tube Cutter | |
|
||
46552
|
Apparatus | |
|
||
46553
|
Centrifuge Arrangement | |
|
||
46559
|
Cascade Design for Asymetrically Operating Gas Centrifuge | |
|
||
47814
|
Centrifuge Balance | |
|
||
47816
|
Centrifuge/cascade Control System | |
|
||
49057
|
Sample Collection Ring for a Multisample Centrifuge | |
|
||
52159
|
Gas Centrifuge Design | |
|
||
52995
|
Centrifuge Center Support | |
|
||
54055
|
Dynamic Controller for Centrifuge | |
|
||
54898
|
Method for Improving Seismic Capability of Centrifuge Machines | |
|
||
56507
|
Countercurrent Flow Generation in a Gas Centrifuge | |
|
||
56512
|
Centrifuge Rotor |
Page 4 of 5
DOE CASE FILE NO. | ||
(S-NUMBER) | TITLE OF INVENTION | |
|
||
56542
|
Proposed Method of Reducing Centrifuge Cap Stress | |
|
||
56545
|
Proposed Method of Increasing the Separative Power of Gas Centrifuges | |
|
||
56546
|
Proposed Method for Measuring Centrifuge Motor Cap | |
|
||
58017
|
Gas Centrifuge Fidler Signal Simulator | |
|
||
59975
|
Centrifuge Rotor Repair Device | |
|
||
60527
|
Light Gas Removal System for Operating Gas Centrifuge Machines | |
|
||
60902
|
Gas Extractor for a Gas Centrifuge (Livermore) | |
|
||
61173
|
Safety Pressure-relief Device for Centrifuges | |
|
||
61830
|
Vertical Travel Linkage System for Gas Centrifuges | |
|
||
61856
|
Design for Centrifuge Rotor End Caps | |
|
||
61876
|
Direction of Rotating Verification Technique for Gas Centrifuge Machines | |
|
||
62535
|
Improved Gas Centrifuge Drive Mechanism | |
|
||
63508
|
Improved Rotor Design for Advanced Gas Centrifuge Machines | |
|
||
63533
|
Centrifuge Fabrication Method | |
|
||
63602
|
Circulation Drive for Gas Centrifuge | |
|
||
65929
|
Process Gas Seal for Centrifuge Machine |
Page 5 of 5
Annual Retainer
|
$65,000 paid at the beginning of the service year. Until a director has satisfied USECs director stock ownership guidelines (numerical stock ownership target equal to five times the annual retainer), at least 50% of the retainer is paid in the form of restricted stock units, although a director may elect to receive a greater proportion of the retainer in restricted stock units. Once a director has satisfied USECs director stock ownership guidelines, director is entitled to receive the entire annual retainer in cash, although a director may elect to receive the retainer in restricted stock units in lieu of cash. | |
|
||
Committee Chairman Fees
|
$12,000 annual fee for Audit, Finance and Corporate Responsibility Committee chairman. $7,500 annual fee for all other committees chairman. Committee chairman fee paid in cash or restricted stock units, at the directors election, at the time the annual retainer is paid. | |
|
||
Board Meeting Fees
|
$2,000 for each Board of Directors meeting attended. Meeting fees are paid in cash in the week following the meeting or, at the directors election, in restricted stock units in the month following each meeting. | |
|
||
Committee Meeting Fees
|
$1,500 for each committee meeting attended. Meeting fees are paid in cash in the week following the meeting or, at the directors election, in restricted stock units in the month following each meeting. | |
|
||
Annual Restricted Stock Unit Grant
|
Annual grant of restricted stock units valued at $50,000 granted at the time the annual retainer is paid. Restricted stock units vest on the first to occur of: (1) one year from the date of grant, (2) termination of the directors service by reason of Retirement, death or disability, or (3) a change in control. | |
|
||
Incentive Restricted Stock Unit Awards
|
If a director chooses to receive restricted stock units as payment for the part of the annual retainer, chairman and meeting fees that they are otherwise entitled to receive in cash, he or she will receive an incentive payment of restricted stock units equal to 20% of the portion of the annual retainer, chairman and meeting fees that the director elects to take in restricted stock units in lieu of cash. These incentive restricted stock units will vest on the first to occur of: (1) three years from the date of grant, (2) termination of the directors service by reason of Retirement, death or disability, or (3) a change in control. Incentive restricted stock units are granted at the time the annual retainer is paid. |
124
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
February 27, 2007 | /s/ John K. Welch | |||
John K. Welch | ||||
President and Chief Executive Officer |
125
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
February 27, 2007 | /s/ John C. Barpoulis | |||
John C. Barpoulis | ||||
Senior Vice President and Chief Financial Officer |
126
February 27, 2007 | /s/ John K. Welch | |||
John K. Welch | ||||
President and Chief Executive Officer | ||||
February 27, 2007 | /s/ John C. Barpoulis | |||
John C. Barpoulis | ||||
Senior Vice President and Chief Financial Officer | ||||
127
þ
|
Without qualification | ||||
|
|||||
|
or | ||||
|
|||||
o
|
With qualification |
By
|
/s/ John K. Welch | ||
|
|||
Print Name:
|
John K. Welch | ||
Title:
|
President and Chief Executive Officer | ||
Date:
|
May 25, 2006 |
128