ML103630204

Paducah Gaseous Diffusion Plant and Portsmouth Gaseous Diffusion Plant, Transmittal of Changes to the Decommissioning Funding Program Description and Depleted Uranium Management Plan and Financial Assurance for Calendar Year 2011

ML103630204
Person / Time
Site:	Paducah Gaseous Diffusion Plant, Portsmouth Gaseous Diffusion Plant
Issue date:	12/23/2010
From:	Toelle S U.S. Enrichment Corp (USEC)
To:	Catherine Haney Office of Nuclear Material Safety and Safeguards
References
GDP 10-0053
Download: ML103630204 (63)

Text

AA Global Energy Company December 23, 2010 GDP 10-0053 Ms. Cathy Haney Director, Office of Nuclear Material Safety and Safeguards Attention: Document Control Desk U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Paducah Gaseous Diffusion Plant (PGDP)

Portsmouth Gaseous Diffusion Plant (PORTS)

Docket Nos. 70-7001 and 70-7002 Certificate Nos. GDP-1 and GDP-2 Transmittal of Changes to the Decommissioning Funding Program Description and Depleted Uranium Management Plan and Financial Assurance for Calendar Year 2011

Dear Ms. Haney:

Enclosures 1 and 2 provide revisions to the Gaseous Diffusion Plants (GDPs) Decommissioning Funding Program Description (DFP) and Depleted Uranium Management Plan (DU Plan) for calendar year 2011, respectively.

The United States Enrichment Corporation (USEC) will incorporate the DFP and DU Plan changes into a revision to the Application.

Conditions to USEC's Certificate of Compliance for PORTS and PGDP require submittal of a revised financial instrument by December 3 1 st of each year, should the current funding level require revision. Enclosure 3 contains a non-proprietary copy of the SAFECO Insurance Company of America rider increasing the amount of the associated Bond from $12,770,000 to $39, 370,000. This rider, in combination with USEC's existing financial assurance, provides sufficient funding to cover USEC's decommissioning liabilities for calendar year 2011. contains a non-proprietary copy of Schedules A, B, and C of the Standby Trust Agreement. The executed originals of the SAFECO rider and Schedules A, B, and C of the Standby Trust Agreement will be provided to the NRC Project Manager by separate letter (USEC letter GDP 10-0054).

USEC Inc.

6903 Rockledge Drive, Bethesda, MD 20817-1818 Telephone 301-564-3200 Fax 301-564-3205 www.usec.com

Ms. Cathy Haney December 23, 2010 GDP 10-0053, Page 2 Consistent with the calendar year 2010 DFP update, USEC has developed the calendar year 2011 depleted uranium disposal cost estimates for the GDPs by applying the methodology established during the licensing activities associated with USEC Inc.'s American Centrifuge Plant (ACP), and escalating the unit costs to 2011 dollars. Enclosure 5 provides the analysis of the depleted uranium disposal unit cost estimates for the GDPs.

Should you have any questions, please contact me at (301) 564-3250. Commitments contained in this submittal are noted in Enclosure 6.

Sincerely, Steven A. Toelle Director, Regulatory Affairs

Enclosures:

1. GDP Decommissioning Funding Program Description

2. GDP Depleted Uranium Management Plan

3. SAFECO Surety Bond Rider

4. Standby Trust Schedules A, B, and C

5. Analysis of Depleted Uranium Disposal Costs For the Gaseous Diffusion Plants

6. Commitments Contained in this Submittal cc:

J. Calle, Chief, Fuel Facility Inspection, NRC Region II M. Miller NRC Senior Resident Inspector, PGDP T. Liu, Project Manager, NRC HQ GDP 10-0053 Page 1 of 33 GDP Decommissioning Funding Program Description

DECOMMISSIONING FUNDING PROGRAM DESCRIPTION

DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page ii

DFP-GDPs PGDP Rev. 126 PORTS Rev. 106 December 23, 2010 LIST OF EFFECTIVE PAGES Pages ii iv v

vi 1

2 3

4 5

6 7

7a 7b 8

PSB-1 PSB-2 PSB-3 PSB-4 LOC-1 LOC-2 STA-1 STA-2 STA-3 STA-4 STA-5 STA-6 STA-7 STA-8 STA-9 STA-10 PGDP Revision 86 126 86 107 86 86 86 120 126 126 1.26 126 126 107 126

,86 86 86 86 107 107 107 86 86 86 86 86 94 107 86 86 PORTS Revision 70 106 70 85 70 70 70 102 106 106 106 106 106 85 106 70 70 70.

70 85 85 85 70 70 70 70 70 77 85 70 70 iii

DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 20, 2003 Blank Page iv

DFP-GDPs April 13, 2007 PGDP Rev. 107 PORTS Rev. 85 CONTENTS Page

1.0 INTRODUCTION

1 2.0 SCOPE OF USEC'S DECOMMISSIONING FINANCIAL RESPONSIBILITY.............. 2 3.0 DECOMMISSIONING COST ESTIMATE..........................................................................

4 3.1 LOW LEVEL AND MIXED WASTE DISPOSAL.................................................

4 3.1.1 LOW LEVEL RADIOACTIVE WASTE DISPOSAL.................................

5 3.1.2 MIXED WASTE DISPOSAL..........................................................................

6 3.1.3 MIXED WASTE IN STORAGE...................................................................

6 3.1.4 LOW-LEVEL RADIOACTIVE WASTE IN STORAGE............................

7 3.2 DEPLETED URANIUM DISPOSITION...................................................................

7 3.3 LA BO R CO STS..................................................................................................

8 4.0 REVIEW AND ADJUSTMENT OF DECOMMISSIONING COSTS AND FUNDING LEV ELS..................................................................

8..8

5.0 DECOMMISSIONING FUNDING

MECHANISM...............................

8 PAYMENT SURETY BOND - NON-EXECUTED VERSION.....................................................

PSB-1 IRREVOCABLE STANDBY LETTER OF CREDIT...................................................................

LOC-1 NON-EXECUTED VERSION STANDBY TRUST AGREEMENT - NON-EXECUTED VERSION...........................................

STA-1 v

DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page vi

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70

1.0 INTRODUCTION

As a condition of certification, 10 Code of Federal Regulations (CFR) 76.35(n) requires the United States Enrichment Corporation (USEC) to submit, as part of its application for an NRC certificate of compliance:

A description of the funding program to be established to ensure that funds will be set aside and available for those aspects of the ultimate disposal of waste and depleted uranium, decontamination and decommissioning, relating to the gaseous diffusion plants leased to the Corporation by the Department of Energy, which are the financial responsibility of the Corporation.

Section 76.35(n) also requires USEC to establish financial surety arrangements to provide the requisite funding. The funding mechanism must ensure availability of funds for activities required to be completed both before and after the return of the gaseous diffusion plants to the Department of Energy (DOE) in accordance with the July 1, 1993 Lease Agreement between DOE and USEC (Lease Agreement). The funding program must also contain a basis for cost estimates used to establish funding levels, and means of adjusting such cost estimates and associated funding levels over the duration of the lease. Finally, USEC is not required to provide funding for "those aspects of decontamination and decommissioning... assigned to the Department of Energy under the Atomic Energy Act of 1954, as amended."

In accordance with 10 CFR 76.35(n), USEC hereby submits -a description of its program to ensure adequate funds are available for the disposal of waste and the disposition of depleted uranium generated at the GDP's and for which USEC is financially responsible7 under the Atomic Energy Act (AEA).

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DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 2.0 SCOPE OF USEC'S DECOMMISSIONING FINANCIAL RESPONSIBILITY USEC began to operate the Paducah (PGDP) and Portsmouth (PORTS) plants on July 1, 1993, in accordance with the AEA, as amended, and the July 1, 1993 Lease Agreement. Prior to July 1, 1993, DOE operated the plants for about 40 years. Section 1403(d) of the AEA provides that "[t]he payment of any costs of decontamination and decommissioning...

with respect to conditions existing before the transition date [July 1, 1993], in connection with property of the Department leased under subsection (a),

shall remain the sole responsibility of the Department."

Accordingly, USEC is not financially responsible for, and this Program Description does not provide funding assurance for, decontamination or decommissioning costs associated with any operations at the gaseous diffusion plants (GDPs) prior to July 1, 1993.

Furthermore, the GDPs, including the Leased Premises, will ultimately be decommissioned by DOE, which is solely responsible for the conduct of decontamination and decommissioning activities at the plant, and which also bears sole financial responsibility for the bulk of these activities. Section 4.6 of the Lease Agreement states that:

Except as provided in Section 4.5(c) of this Lease, the Department will be responsible for and will pay the costs of all Decontamination and Decommissioning, including the costs of Decontamination and Decommissioning of the Leased Premises, the Leased Personalty, any personal property found on the Leased Premises, regardless of ownership, and any Capital Improvement.

In addition, Section 4.3(b) of the Lease Agreement states that "[t]he Corporation shall be entitled, should it choose, to leave. any of its personal property- (including personal property contaminated by radioactive materials) on the Leased Premises. at the end of the Lease Term for Decontamination and Decornmissioning by, the Department."

However, USEC does have certain specific financial responsibilities with respect to some of these activities. Under Section 4.4(c) of the Lease Agreement, USEC is "responsible for the ultimate treatment and disposal of any waste generated by the Corporation, and for which the Department is not responsible...

Under this provision, USEC is financially responsible for, and this Program Description addresses, the disposal of low-level radioactive waste (LLRW) and "mixed" hazardous and radioactive waste generated by USEC at the GDPs after the date of privatization, July 28, 1998. 1 In addition, as discussed above, Section 4.6 of the Lease Agreement provides that the Department will pay the costs of all decontamination and decommissioning, "[e]xcept as provided in Section 4.5(c) of this Lease....." Section 4.5(c) authorizes USEC to remove any capital improvement at the GDPs, but "if such removal increases the costs of the Department for the Decontamination and Decommissioning 1

A more detailed description of USEC's plans to manage and dispose of LLRW and mixed waste generated at the GDPs is provided in the Radioactive Waste Management Program, which is included as part of each certificate of compliance application.

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DFP-GDPs March 31, 2010 PGDP Rev. 120 PORTS Rev. 102 of the Leased Premises to which any such Capital Improvement was attached, the Corporation will pay any such increase in Decontamination and Decommissioning costs."

At this time, USEC does not anticipate removing any capital improvement from the plant site. Therefore, no financial assurance for Decontamination and Deconmmissioning cost increases arising out of such removal is currently being provided.

Finally, USEC is generating depleted uranium as a result of its operation of the GDPs. Section 3109(a)(3) of the USEC Privatization Act (passed April 1996) states that:

All liabilities arising out of the disposal of depleted uranium generated by the Corporation between July 1, 1993 and the privatization date shall become the direct liabilities of the Secretary [Secretary of Energy].

Therefore, this Program Description also describes USEC's funding program to ensure funds are available for the ultimate disposition of the depleted uranium generated by USEC's operations after July 28, 1998.2 As described in the Depleted Uranium Management Plan, USEC has established agreements with the DOE that affect USEC's liability associated with the disposal of depleted uranium generated by USEC. These agreements are the "Memorandum of Agreement Between the United States Department of Energy and the United States Enrichment Corporation Relating to Depleted Uranium," dated June 30, 1998, the "Agreement Between the U.S. Department of Energy ("DOE") and USEC Inc. ("USEC"),"

I dated June 17, 2002, and the "Cooperative Agreement Between Department of Energy and USEC Inc.

Concerning the American Centrifuge Demonstration Project," dated March 23, 2010.

The "Memorandum of Agreement Between the United States 'Department of Energy and the

• United States Enrichment Corporation Relating to Delileted Uranium," dated June 30, 1998 provided for the transfer toDOE of 2,026 48G cylinders containing approximately 16,674,000 Kg of depleted uraniumi generated by USEC's operations. In accordance with the agreement, USEC made the required': full**

payment of over $50M to DOE, covering the entire quantity of depleted uranium to be. transferred.

Therefore, the liability to dispose of the full amount of USEC's depleted uranium specified in the agreement now rests with DOE, further reducing the quantity of depleted uranium to be ultimately disposed of by USEC. Within these major parameters of the agreement, USEC and DOE agreed to implement the actual transfer of the material on a schedule covering the period of FY 1999 through 2004.

The "Agreement Between the U.S. Department of Energy ("DOE") and USEC Inc. ("USEC"),"

dated June 17, 2002, provided, in part, for the DOE taking title of depleted uranium from USEC operations during USEC's fiscal years 2002 and 2003 and one-half the amount of depleted uranium generated during USEC's fiscal years 2004 and 2005.

Therefore, as a result of this June 17, 2002 agreement, USEC's liability associated with the disposal of USEC generated depleted uranium was reduced by the quantity of depleted uranium specified in this June 17, 2002 agreement.

The "Cooperative Agreement Between Department of Energy and USEC Inc. Concerning the American Centrifuge Demonstration Project," dated March 23, 2010, transferred title to 13,312,411 kg of DU from USEC to DOE to enable USEC to release encumbered funds to support continued development and demonstration of the American Centrifuge technology.

2 The Depleted Uranium Management Plan describes in greater detail USEC's plans for the management and disposition of depleted uranium.

3

DFP-GDPs December 23, 2010 PGDP Rev. 126 PORTS Rev. 106 The quantity of depleted uranium associated with these agreements, and the transfer schedule for this material, is specified in Table I of the Depleted Uranium Management Plan.

In addition to USEC's enrichment operations, USEC also performs contract work for the DOE and DOE contractors at the Portsmouth and Paducah Plants. To compensate USEC for incurred costs associated with these contracts, DOE has taken title to depleted uranium further reducing USEC's liability for the disposal of depleted uranium.

The quantity of depleted uranium, and the transfer schedule for the depleted uranium associated with the compensation for these contracts, is specified in Table 1 of the Depleted Uranium Management Plan.

3.0 DECOMMISSIONING COST ESTIMATE In accordance with 10 CFR 76.35(n), USEC has estimated the costs associated with the disposal of LLRW and mixed waste, and the disposition of depleted uranium generated by its operations at the GDPs.

These costs are not considered decontamination and decommissioning costs, but rather production costs since they are incurred during the operation and maintenance of the plant. These cost estimates are cumulative, and are calculated one year in advance. The estimated cost for CY 2011 for the disposal of waste and for the disposition of depleted uranium generated by USEC at the GDPs is as follows:

Low Level and Mixed Waste.... $

9.63 M Depleted Uranium..................... $162.48 M Labor Cost............................ $

0.55 M CYJl Cost....... $172.66 M To :account for uncertainties associated with either the estimated volumes or costs associated with

-the above:cost estimates, a contingency factor of 25%Wisappliedltothe CY'20i1 cost, which is consistent

with the.recommendations in the NRC's guidance. on preparing Decommissioning Funding Plans.

(NUREG-1757). After application of the 25% contingency, USEC's total projected decommissioning funding liability for CY 2011 is $ 215.8 million.

The bases for these cost estimates, are described below in their respective subsection. USEC's cost estimates will be reviewed annually and revised, as necessary, to reflect any change in USEC's projected liability.

3.1 LOW LEVEL AND MIXED WASTE DISPOSAL USEC generates many types of LLRW and mixed (hazardous and radioactive) waste at the GDPs, as described in the Radioactive Waste Management Program (RWMP) for each site. For the most part, all wastes are routinely treated on-site or treated and disposed of off-site as the wastes are generated.

There are, however, a small number of mixed waste streams at PORTS for which no treatment and/or disposal option exists in the US. These wastes are authorized to be stored in Department of Energy permitted storage at PORTS under agreements with the appropriate state agencies.

There is also a quantity of LLRW at each plant that will remain onsite at the end of CY 2011. At PGDP, the LLRW 4

DFP-GDPs PGDP Rev. 126 PORTS Rev. 106 December 23, 2010 in storage includes waste that is being processed for off-site disposal, while at PORTS, most of these wastes currently do not have a disposal option.

These wastes are being stored in compliance with USEC's Certificate of Compliance.

USEC's LLRW and mixed waste decommissioning liability is calculated as the sum of the liability associated with the cost of disposal of that amount of waste estimated to be generated during the calendar year plus the liability associated with the estimated amount of waste that remains in storage at the end of the calendar year. Cost of disposal includes disposal cost, container cost, and transportation costs.

Estimated waste generation volumes are based on historical waste generation for each plant.

Each individual LLRW and mixed waste stream has a different estimated volume and a different disposal cost. For the year, the different volumes of waste generated and their disposal cost estimates are averaged to establish an average disposal cost. USEC's cost estimate is based on the weighted average cost to manage waste. The disposal cost estimate for each waste stream in the weighted average cost is based upon existing contract prices, and historical cost of containers and transportation.

Except for those mixed wastes and LLRW that are stored on-site, as noted above, USEC anticipates that its waste' disposal activities will be such that LLRW and most mixed waste generated in any given year will be disposed of within that year, or shortly thereafter. USEC funds this disposal cost out of accrued cash generated from operations. The decommissioning liability associated with the waste that remains in storage at the end of the calendar year at each, site will be calculated based on the estimated volume of waste in storage at the end of the calendar year.

3.1.1 'Lw Level Radioactive Waste Disposal USEC anticipates generating a total of approximately 86,000 ft3 of LLRW from routine operations and projects at the Paducah plant for CY 2011. USEC has assumed disposal of Paducah's LLRW at various commercial disposal facilities at an average weighted cost of $36/ft3. The disposal cost for LLRW generated by USEC at the Paducah plant for CY 2011 is therefore estimated to be:

Paducah LLRW: 86,000 ft 3 x $36/ft3 = $3.096 million for the year Likewise at the Portsmouth plant, USEC anticipates generating a total of approximately 18,000 ft3 of LLRW from routine operations, projects and shutdown related activities. USEC has assumed disposal of Portsmouth's LLRW at various commercial disposal facilities at an average weighted cost of

$55/ft3. The disposal cost for LLRW generated by USEC at the Portsmouth plant for CY 2011 is therefore estimated to be:

II Portsmouth LLRW: 18,000 ft3 x $55/ft3 = $0.990 million for the year The cost of disposal of USEC's LLRW for CY 2011 is $4.086 million.

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DFP-GDPs December 23, 2010 PGDP Rev. 126 PORTS Rev. 106 3.1.2 Mixed Waste Disposal USEC anticipates generating a total of approximately 100 ft3 of mixed waste at Paducah plant in CY 201.1.

The current average cost estimate for disposing of this mixed waste product at Paducah is

$1200/ft 3. The disposal cost for this mixed waste generated at Paducah plant for CY 2011 is therefore estimated to be:

Paducah Mixed Waste: 100 ft3 x $1,200/ft 3 = $0.120 million for the year Likewise at the Portsmouth plant, USEC anticipates generating a total of approximately 300 ft3 of mixed waste for CY 2011. The current average cost of disposal of such waste at Portsmouth is

$800/ft3. The disposal cost for this mixed waste generated at the Portsmouth plant for CY 2011 is therefore estimated to be:

Portsmouth Mixed Waste: 300 ft3 x $800/ft3 = $0.240 million for the year The cost of disposal of USEC's mixed waste for CY 201 1 is $0.360 million.

3.1.3 Mixed Waste in Storage As described earlier, there is an amount of mixed waste that will remain in storage at the end of CY 2011 at the Portsmouth plant. USEC estimates that 100 ft3 of mixed waste will be in storage at the end of CY 2011. Due to the unknown future costs associated with these wastes an additional $1,500/ft3 may be necessary for disposal. The additional estimated cost associated with the disposal of this waste is:

Portsmouth mixed waste in storage: 100 ft3 x $1,500/ft3 = $0.150 million 6

DFP-GDPs December 23, 2010 PGDP Rev. 126 PORTS Rev. 106 3.1.4 Low-Level Radioactive Waste in Storage As described earlier, there is an amount of LLRW that will remain in storage at the end of CY 2011.

This waste will be disposed at a later date at an estimated cost of $36/ft3.

This disposal cost is determined based on the weighted average cost for this particular waste stream. At Paducah, this LLRW volume is estimated to be 21,000 ft3 The disposal cost for this LLRW that will remain on site at Paducah at the end or CY 2011 is estimated to be:

Paducah LLRW in storage: 21,000 ft3 x $36/ft3 = $0.756 million Likewise, at the Portsmouth Plant, USEC estimates that 6,800 ft3 of LLRW will remain on-site at the end of CY 2011, and disposed at a later date.

Therefore, the disposal cost for this LLRW that will remain on site at Portsmouth at the end of CY 2011 is estimated to be:

Portsmouth LLRW in storage:

6,800 ft3 x $55/ft3= $0.374 million In addition, 6,500 ft3 of LLRW for which USEC does not currently have a disposal outlet will remain in storage at Portsmouth. Due to the unknown future costs associated with disposal of this 6;500 ft3 of LLRW, an additional $600/ft3 may be necessary for disposal.

Therefore, the disposal cost.for this LLRW that will remain in storage at Portsmouth at the end of CY 2011 is estimated to be:

Portsmouth LLRW in' storage: 6,500 ft3 x $600/ft3 -$3.9 million Therefore, the cost to dispose of the LLRW in storage in a subsequent calendar year is $5.03 million.

3.2 Depleted Uranium Disposition The estimate of decommissioning liability for depleted uranium is based on the generation of depleted uranium as described in the Depleted Uranium Management Plan. USEC's examination of the available information has identified that the unit cost to dispose of tails for the GDPs could range between

$3.99/kilogram (kg) uranium (U) to $5.03/kg U, depending on a number of factors and assumptions. The unknown factors include: escalation rate(s) of various construction cost components; de-escalation rate(s) of future operating costs (to present day dollars); volume of tails disposed; revenue/avoided disposal cost from sale of conversion products (e.g., hydrogen fluoride) or higher assay tails (tail stripping); construction and operations budget contingencies; allocation of decontamination and decommissioning costs (between USEC and DOE); and DOE oversight costs.

USEC has developed the depleted uranium disposal cost estimate for the GDPs based on a methodology and supporting data provided by DOE in support of USEC Inc.'s American Centrifuge Plant (ACP) licensing activities. This DOE methodology and supporting data enabled the development of a specific analysis for the ACP for the purposes of ACP decommissioning funding. The unit cost for disposal of ACP 7

DFP-GDPs December 23, 2010 PGDP Rev. 126 PORTS Rev. 106 generated depleted uranium was developed based upon costs associated with processing of the ACP depleted uranium at the DOE's Portsmouth DUE6 Conversion Facility. Consistent with the estimated unit cost for disposal of the ACP depleted uranium and escalating this unit cost to CY 2011 dollars, the depleted uranium disposal cost for USEC's depleted uranium located at PORTS is estimated to be

$5.03/kgU.

USEC used the same methodology and supporting data provided by DOE in support of the ACP licensing activities to develop a PGDP-specific cost estimate to process USEC depleted uranium located at PGDP at the DOE's Paducah DUF6 Conversion Facility. Based on the information provided by DOE, USEC determined that $4.44\\kgU (in 2011 dollars) is a reasonable depleted uranium disposal unit cost for the purposes of decommissioning funding of USEC's depleted uranium located at PGDP.

Based on the Depleted Uranium Management Plan, USEC's projected maximum liability at the end of CY 2011 for the disposition of depleted uranium generated by its Paducah and Portsmouth operations is 36,541,000 kilograms (refer to Table 1 in the Depleted Uranium Management Plan). The projected quantities of depleted uranium located at each GDP are noted below.

Location Projected Quantity (kgU)

PGDP 36,142,000 PORTS 399,000 Total estimated.disposal cost, i'n20Q11 dollars, for depleted uranium is then, calculatedas follows:

Location ProjectedQuantity (kgU)

Unit Cost ($/kgU)

Disposal Cost ($)

PGDP 36,142,000 4.44 160,470,480 PORTS 399,000 5.03 2,006,970 Total Disposal Cost 162,477,450 The total estimated disposal cost for depleted uranium, after rounding, is $162.48 million.

The above cost estimate includes processing as well as transportation and disposal of any by-product related to processing of the depleted uranium. There are no costs for transporting USEC's depleted uranium inventory to the DOE DUE6 conversion facilities as these facilities are co-located with the gaseous diffusion plants.

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DFP-GDPs PGDP Rev. 107 PORTS Rev. 85 April 13, 2007 Blank Page 7b

DFP-GDPs PGDP Rev. 126 PORTS Rev. 106 December 23, 2010 3.3 Labor Costs To account for labor costs associated with disposal of USEC generated waste, USEC has included

• provisions for two crews (one for each facility) comprised of I first line manager, 2 technical staff, 1 health physics technician and 6 waste operators. The labor costs are calculated assuming the crews are available for a six-month duration. Labor costs were estimated based on the 2011 GDP labor rates.

Based on these assumptions, the labor costs associated with disposal of USEC generated waste is

$553,890 ($276,945 per site).

4.0 REVIEW AND'ADJUSTMENT OF DECOMMISSIONING COSTS AND FUNDING LEVELS USEC will review the decommissioning cost estimates and associated funding levels over the duration of the lease and adjust them when necessary. These adjustments will take into account such factors as changes in volume and cost estimates, changes in plant conditions, and changes in expected decontamination and decommissioning procedures. USEC will conduct such reviews in October of each year.

5.0 DECOMMISSIONING FUNDING

MECHANISM USEC utilizes payment surety bond(s) and/or letter(s) of credit in conjunction with standby trust agreement(s) to ensure that sufficient funds will be available for waste disposal and depleted uranium disposition as set forth in this Program Description. The instruments are derived from Appendix A, NUREG-1757 Volume 3, "Consolidated NMSS Decommissioning Guidance, Financial Assurance, Recordkeeping, and Timeliness", dated September 2003. Non-executed versions are included in this Plan. Executed documents are submitted to the NRC for review as they are revised and reissued.

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DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 PAYMENT SURETY BOND - NON--EXECUTED VERSION Date bond executed:

Effective date:

Principal:

United States Enrichment Corporation 6903 Rockledge Drive Bethesda, MD 20817 Type of organization: Delaware Chartered Corporation NRC certificate of compliance number: GDP-1 and GDP-2 Name and address of facilities:

Amount(s) for decommissioning activity guaranteed by this bond:

Paducah Gaseous Diffusion Plant Portsmouth Gaseous Diffusion Plant Estimated at [insert amount]

Surety(ies) [name(s) and business address(es)]

Type of organization: [insert "proprietorship," "joint venture," "partnership" or "corporation"]

State of incorporation:

(if applicable)

Surety's qualification in jurisdiction where facility is located.

Surety's bond number Total penal sum of bond: $

Know all persons by these presents, That we, the Principal and Surety(ies) hereto, are firmly bound to the U.S. Nuclear Regulatory Commission (herein called NRC), in the above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Sureties are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum "jointly and severally" only for the purpose of allowing a joint action or actions against any or all of us, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety; but if no limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.

PSB-1

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 WHEREAS, the NRC, an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 76, applicable to the Principal, which require that the holder of a certificate of compliance for a gaseous diffusion plant, or an applicant for a certificate of compliance for such a facility provide financial assurance that funds will be available when needed for those aspects of the ultimate disposal of waste and disposition of depleted uranium, decontamination and decommissioning of such a facility which are the financial responsibility of such holder or applicant (collectively, "decommissioning");

NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully, before the beginning of decommissioning of each facility identified above, fund the standby trust fund in the amount(s) identified above for the facility; Or, if the Principal shall fund the standby trust fund in such amount(s) after an order to begin facility decommissioning is issued by the NRC or a U.S. district court or other court of competent jurisdiction; Or, if the Principal shall provide alternative financial assurance and obtain the written approval of the NRC of such assurance, within 30 days after the date a notice of cancellation from the Surety(ies) is received by both.the Principal, and the NRC, then this obligation shall be null and void; otherwise it is to remain in full force and effect.

The Surety(ies).shall become liable on this bond obligation only.when the.Principal has failed to fulfill the conditions described above. Upon notification by the NRC that the Principal has failed to perform as guaranteed by this bond, the Surety(ies) shall place funds in the amount guaranteed for the facility(ies) into the standby trust fund established by the Principal with [name of trustee] pursuant to the Standby Trust Agreement dated [date].

The liability of the Surety(ies) shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.

The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the NRC provided, however, that cancellation shall not occur during the 90 days beginning on the date of receipt of the notice of cancellation by both the Principal and the NRC, as evidenced by the return receipts.

The Principal may terminate this bond by sending written notice to the NRC and to Surety(ies) 90 days prior to the proposed date of termination, provided, however, that no such notice shall become effective until the Surety(ies) receive(s) written authorization for termination of the bond from the NRC.

If any part of this agreement is invalid, it shall not affect the remaining provisions which will remain valid and enforceable.

PSB-2

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 In Witness Whereof, the Principal and Surety(ies) have executed this financial guarantee bond and have affixed their seals on the date set forth above.

The persons whose signatures appear below hereby certify that they are authorized to execute this surety bond on behalf of the Principal and Surety(ies).

Principal:

United States Enrichment Corporation

[Signature(s)]

[Name(s)]

[Title(s)]

[Corporate Seal]

Corporate Surety(ies)

[Name and address]

State of incorporation:

Liability limit: $

[Signature(s)]

[Name(s) and title(s)]

[Corporate Seal]

[For every co-surety, provide signature(s), corporate seal, and other information in the same manner as for Surety(ies) above.]

Bond premium:

PSB-3

DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page.

PSB-4

DFP-GDPs April 13, 2007 PGDP Rev. 107 PORTS Rev. 85 IRREVOCABLE STANDBY LETTER OF CREDIT NO. [INSERT NUMBER]

NON-EXECUTED VERSION This Credit Expires [insert date]

Issued To:

U.S. Nuclear Regulatory Commission Washington, DC 20555

Dear Sir or Madam:

We hereby establish our Irrevocable Standby Letter of Credit No.

in your favor, at the request and for the account of the United States Enrichment Corporation, 6903 Rockledge Drive, Bethesda, MD 20817, Certificate Numbers GDP-1 and GDP-2, Docket Numbers 70-7001 and 70-7002, up to the aggregate amount of [insert dollar amount in words], U.S. dollars $_

available upon presentation of:

(1) your sight draft, bearing reference to this Letter of Credit No._,

and (2) your signed statement reading as follows: "I certify that the amount of the draft is payable pursuant to regulations issued under authority of the U.S. Nuclear Regulatory Commission."

• This letter of credit is issued in accordance With regulations issued under the'authority of the'U.S.

Nuclear Regulatory Commission (NRC), an agency of the U'S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974. NRC has promulgated regulations in title 10, Chapter I of the Code of Federal Regulations, Part 76, which require that a holder of, or an applicant for, an NRC certificate of compliance issued under 10 CFR Part 76 provide assurance that funds will be available when needed for decommissioning.

This letter of credit is effective as of [insert date] and shall expire on [insert date at least I year later], but such expiration date shall be automatically extended for a period of [insert time period of at least 1 year] on [insert date] and on each successive expiration date, unless, at least 90 days before the current expiration date, we notify both you and the United States Enrichment Corporation, by certified mail, as shown on the signed return receipts or overnight courier. If the United States Enrichment Corporation is unable to secure alternative financial assurance to replace this letter of credit within 30 days of notification of cancellation, NRC may draw upon the full value of this letter of credit prior to the then current expiration date. The bank shall give immediate notice to the applicant and NRC of any notice received or action filed alleging (1) the insolvency or bankruptcy of the financial institution or (2) any violation of regulatory requirements that could result in suspension or revocation of the bank's

-charter or license to do business. The financial institution also shall give immediate notice if the bank, for any reason, becomes unable to fulfill its obligation under the letter of credit unless a court order or other applicable law prevents the giving of such notice.

LOC-1

DFP-GDPs April 13, 2007 PGDP Rev. 107 PORTS Rev. 85 Whenever this letter of credit is drawn on, under and in compliance with the terms of this letter of credit, we shall duly honor such draft upon its presentation to us within 30 days, and we shall deposit the amount of the draft directly into the standby trust fund of the United States Enrichment Corporation in accordance with your instructions.

Each draft must bear on its face the clause: "Drawn under Letter of Credit No.

dated

, and the total of this draft and all other drafts previously drawn under this letter of credit does not exceed [insert amount of letter of credit]."

[Signature(s) and title(s) of official(s) of issuing institution]

[Name, address, and phone number of issuing institution]

[Date]

This credit is subject to [insert "the most recent edition of the Uniform Customs and Practice for Documentary Credits, published by the International Chamber of Commerce, " or "the Uniform Commercial Code"].

LOC-2

DFP-GDPs April 13, 2007 PGDP Rev. 107 PORTS Rev. 85 STANDBY TRUST AGREEMENT - NON--EXECUTED VERSION TRUST AGREEMENT, the Agreement entered into as of [date] by and between the United States Enrichment Corporation, a Delaware chartered corporation, herein referred to as the "Grantor," and

[name and address of a national bank or other Trustee acceptable to the U.S. Nuclear Regulatory Commission], the "Trustee."

WHEREAS, the U.S. Nuclear Regulatory Commission (NRC), an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 76. These regulations, applicable to the Grantor, require that a holder of, or an applicant for, a Part 76, certificate of compliance provide assurance that funds will be available when needed for required decommissioning activities.

WHEREAS, the Grantor has elected to use a surety bond in combination with a letter of credit to provide such financial assurance for the facilities identified herein; and WHEREAS, when payment is made under a surety bond and/or letter of credit this standby trust shall be used for the receipt of such payment; and WHEREAS, the Grantor, acting through its duly authorized officers, has selected the Trustee to be the trustee under this Agreement, and the Trustee is willing to act as. trustee, NOW, THEREFORE, the Grantor and the Trustee agree as follows:

Section 1. Definitions. As used in this Agreement:

(a)

The term "Decommissioning" means those aspects of the ultimate disposal of waste and disposition of depleted uranium, decontamination and decommissioning of the Paducah and Portsmouth Gaseous Diffusion Plant (GDPs) which are the financial responsibility of the Grantor.

(b)

The term "Grantor" means the United States Enrichment Corporation and any successors or assigns thereof.

(c)

The term "Trustee" means the trustee who enters into this Agreement and any successor Trustee.

Section 2. Costs of Decommissioning. This Agreement pertains to the costs of decommissioning the materials and activities identified in Certificate of Compliance Number GDP-1 and GDP-2 issued pursuant to 10 CFR Part 76.

Section 3. Establishment of Fund. The Grantor and the Trustee hereby establish a standby trust fund (the Fund) for the benefit of the NRC. The Grantor and the Trustee intend that no third party have access to the Fund except as provided herein.

STA-1

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 Section 4. Payments Constituting the Fund. Payments made to the Trustee for the Fund shall consist of cash, securities, or other liquid assets acceptable to the Trustee. The Fund is established initially as consisting of the property, which is acceptable to the Trustee, described in Schedule B attached hereto.

Such property and any other property subsequently transferred to the Trustee are referred to as the "Fund," together with all earnings and profits thereon, less any payments or distributions made by the Trustee pursuant to this Agreement. The Fund shall be held by the Trustee, IN TRUST, as hereinafter provided. The Trustee shall not be responsible nor shall it undertake any responsibility for the amount of, or adequacy of the Fund, nor any duty to collect from the Grantor, any payments necessary to discharge any liabilities of the Grantor established by the NRC.

Section 5. Payment for Required Activities Specified in the Plan. The Trustee shall make payments from the Fund to the Grantor upon presentation to the Trustee of the following:

a. A certificate duly executed by the Secretary of the Grantor attesting to the occurrence of the events, and in the form set forth in the attached Specimen Certificate, and

b. A certificate attesting to the following conditions:

(1)that decommissioning is proceeding pursuant to an NRC-approved plan.

(2)that the funds withdrawn will be expended for activities undertaken pursuant to that Plan, and (3)that the NRC has been given 30 days' prior notice of the Grantor's intent to withdraw funds from the escrow fund.

No withdrawal from the fund can exceed 10 percent of the outstanding balance of the Fund unless NRC approval is attached.

In the event of the Grantor's default or inability to direct decommissioning activities, the Trustee shall make payments from the Fund as the NRC shall direct, in writing, to provide for the payment of the costs of required activities covered by this Agreement. The Trustee shall reimburse the Grantor, or other persons as specified by the NRC, from the Fund for expenditures for required activities in such amount as the NRC shall direct in writing. In addition, the Trustee shall refund to the Grantor such amounts as the NRC specifies in writing. Upon refund, such funds shall no longer constitute part of the Fund as defined herein.

Section 6. Trust Management. The Trustee shall invest and reinvest the principal and income of the Fund and keep the Fund invested as a single fund, without distinction between principal and income, in accordance with general investment policies and guidelines which the Grantor may communicate in writing to the Trustee from time to time, subject, however, to the provisions of this section. In investing, reinvesting, exchanging, selling, and managing the Fund, the Trustee shall discharge its duties with respect to the Fund solely in the interest of the beneficiary and with the care, skill, prudence, and diligence under the circumstances then prevailing which persons of prudence, acting in a like capacity STA-2

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 and familiar with such matters, would use in the conduct of an enterprise of a like character and with like aims; except that:

(a)

Securities or other obligations of the Grantor, or any other owner or operator of the facilities, or any of their affiliates as defined in the Investment Company Act of 1940, as amended (15 U.S.C. 80a-2(a)), shall not be acquired or held, unless they are securities or other obligations of the Federal or a State government; (b)

The Trustee is authorized to invest the Fund in time or demand deposits of the Trustee, to the extent insured by an agency of the Federal Government, and in obligations of the Federal Government such as GNMA, FNMA, and FHLM bonds and certificates or State and Municipal bonds rated BBB or higher by Standard and Poor's or Baa or higher by Moody's Investment Services; and (c)

For a reasonable time, not to exceed 60 days, the Trustee is authorized to hold uninvested cash, awaiting investment or distribution, without liability for the payment of interest

• thereon.

Section 7. Commingling and Investment. The Trustee is expressly authorized in its discretion:

(a)

To transfer from time to time any or all of the assets of the fund to any common, commingled, or. collective trust fund created by the Trustee in. which the Fund is eligible to:.'

participate, subject to all of the provisions thereof, to be commingied with the assets of other trusts participating therein; and (b)

To purchase shares in any investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), including one that may be created, managed, underwritten, or to which investment advice is rendered, or the shares of which are sold by the Trustee. The Trustee may vote such shares in its discretion.

Section 8. Express Powers of Trustee. Without in any way limiting the powers and discretion conferred upon the Trustee by the other provisions of this Agreement or by law, the Trustee is expressly authorized and empowered:

(a)

To sell, exchange, convey, transfer, or otherwise dispose of any property held by it, by public or private sale, as necessary to allow duly authorized withdrawals at the joint request of the Grantor and the NRC or to reinvest in securities at the direction of the Grantor; (b)

To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (c)

To register any securities held in the Fund in its own name, or in the name of a nominee, and to hold any security in bearer form or in book entry, or to combine STA-3

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 certificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary capacities, to reinvest interest payments and funds from matured and redeemed instruments, to file proper forms concerning securities held in the Fund in a timely fashion with appropriate government agencies, or to deposit or arrange for the deposit of such securities in a qualified central depository even though, where so deposited, such securities may be merged and held in bulk in the name of the nominee or such depository with other securities deposited therein by another person, or to deposit or arrange for the deposit of any securities issued by the U.S. Government, or any agency or instrumentality thereof, with a Federal Reserve bank, but the books and records of the Trustee shall at all times show that all such securities are part of the Fund; (d)

To deposit any cash in the Fund in interesting-bearing accounts maintained or savings certificates issued by the Trustee, in its separate corporate capacity, or in any other banking institution affiliated with the Trustee, to the extent insured by an agency of the Federal government; and (e)

To compromise or otherwise adjust all claims in favor of or against the Fund.

Section 9. Taxes and Expenses. All taxes of any kind that may be assessed or levied against or in respect of the Fund and all brokerage commissions incurred by the Fund shall be paid from the Fund. All.

other expenses incurred by the 'Trustee in connection with the administration of this Trust,.including fees-for legal services rendered to the Trustee, the compensation of the Trustee to the 6xtent not'paid directly.

by -the Grantor, and all, other proper: charges and disbursements of the Trustee shall be paid from the Fund,.

Section 10. Annual Valuation. After payment has been made into this standby trust fund, the Trustee shall annually, at least 30 days before the anniversary date of receipt of payment into the standby trust fund, furnish to the Grantor and to the NRC a statement confirming the value of the Trust. Any securities in the Fund shall be valued at market value as of no more than 60 days before the anniversary date of the establishment of the Fund. The failure of the Grantor to object in writing to the Trustee within 90 days after the statement has been furnished to the Grantor and the NRC, shall constitute a conclusively binding assent by the Grantor, barring the Grantor from asserting any claim or liability against the Trustee with respect to the matters disclosed in the statement.

Section 11. Advice of Counsel. The Trustee may from time to time consult with counsel with respect to any question arising as to the construction of this Agreement or any action to be taken hereunder. The Trustee shall be fully protected, to the extent permitted by law, in acting on the advice of counsel.

Section 12. Trustee Compensation. The Trustee shall be entitled to reasonable compensation for its services as agreed upon in writing with the Grantor. (See Schedule C.)

Section 13. Successor Trustee. Upon 90 days notice to the NRC, the Trustee may resign; upon 90 days notice to NRC and the Trustee, the Grantor may replace the Trustee; but such resignation or replacement shall not be effective until the Grantor has appointed a successor Trustee and this successor accepts the appointment. The successor Trustee shall have the same powers and duties as those conferred upon the STA-4

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 Trustee hereunder. Upon the successor Trustee's acceptance of the appointment, the Trustee shall assign, transfer, and pay over to the successor Trustee the funds and properties then constituting the Fund. If for any reason the Grantor cannot or does not act in the event of the resignation of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee or for instructions. The successor Trustee shall specify the date on which it assumes administration of the trust in a writing sent to the Grantor, the NRC, and the present Trustee by certified mail 10 days before such changes becomes effective.

Any expenses incurred by the Trustee as a result of any of the acts contemplated by this section shall be paid as provided in Section 9.

Section 14. Instructions to the Trustee. All orders, requests, and instructions by the Grantor to the Trustee shall be in writing, signed by such persons as are signatories to this agreement or such other designees as the Grantor may designate in writing. The Trustee shall be fully protected in acting without inquiry in accordance with the grantor's orders, requests, and instructions. If the NRC issues orders, requests, or instructions to the Trustee these shall be in writing, signed by the NRC, or its designees, and the Trustee shall act and shall be fully protected in acting in accordance with such orders, requests, and instructions. The Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change or a termination of the authority of any person to act on behalf of the Grantor, or the NRC, hereunder has occurred. The Trustee shall have no duty to act in the absence of such orders, requests, and instruction from the Grantor and/or the NRC, except as provided for herein.

.Section,,5' -Amendment of Agreement.. This Agreement may be amended-by. an instrumentin. writing

'.'executed' by the Grantor, the Trustee and the NRC, or by the Trustee and the NRC, if the Grantor ceases to exist:

Section 16. Irrevocability and Termination. Subject to the right of the parties to amend this Agreement as provided in Section 15, this trust shall be irrevocable and shall continue until terminated at the written agreement of the Grantor, the Trustee, and the NRC, or by the Trustee and the NRC, if the Grantor ceases to exist.

Upon termination of the trust, all remaining trust property, less final trust administration expenses, shall be delivered to the Grantor or its successor.

Section 17. Immunity and Indemnification. The Trustee shall not incur personal liability of any nature in connection with any act or omission, made in good faith, in the administration of this trust, or in carrying out any directions by the Grantor, or the NRC, issued in accordance with this Agreement. The Trustee shall be indemnified and saved harmless by the Grantor or from the trust fund, or both, from and against any personal liability to which the Trustee may be subjected by reason of any act or conduct in its official capacity, including all expenses reasonably incurred in its defense in the event the Grantor fails to provide such defense.

Section 18. This Agreement shall be administered, construed, and enforced according to the laws of the United States.

Section 19. Interpretation and Severability. As used in this Agreement, words in the singular include the plural and words in the plural include the singular. The descriptive headings for each section of this Agreement shall not affect the interpretation or the legal efficacy of this Agreement. If any part of this agreement is invalid, it shall not affect the remaining provisions which will remain valid and enforceable.

STA-5

DFP-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 IN WITNESS WHEREOF the parties have caused 'this Agreement to be executed by the respective officers duly authorized and the incorporate seals to be hereunto affixed and attested as of the date first written above.

ATTEST:

[Insert name of Grantor]

[Signature of representative of Grantor]

[Title]

[Title]

[Seal]

[Insert name of Trustee]

[Signature of representative of Trustee]

[Title]

ATTEST:-

((Title]

STA-6

DFP-GDPs PGDP Rev. 94 PORTS Rev. 77 February 25, 2005 United States Enrichment Corporation Standby Trust Agreement SCHEDULE A This Agreement demonstrates financial assurance for the following cost estimates for the following licensed activities:

U.S. NUCLEAR REGULATORY COMMISSION CERTIFICATE OF COMPLIANCE NUMBER GDP-1 and GDP-2 NAME AND ADDRESS OF LICENSEE United States Enrichment Corporation 6903 Rockledge Drive Bethesda, Maryland 20817 3930 State Route 23/Perimeter Road Piketon, Ohio 45661 5,600 Hobbs Road Paducah, Kentucky 42001 COST ESTIMATE FOR REGULATORY ASSURANCES DEMONSTRATED BY THIS AGREEMENT

[Insert amount of agreement]

The cost estimates listed here were submitted to the NRC on [insert date]

The Total Cost of decommissioning the GDP's, assuming no liability for decontamination, is as per the decommissioning cost estimate on file with the NRC.

United States Enrichment Corporation Trustee STA-7

DFP-GDPs PGDP Rev. 107 PORTS Rev. 85 April 13, 2007 United States Enrichment Corporation Standby Trust Agreement SCHEDULE B AMOUNT:

AS EVIDENCED BY:

United States Enrichment Corporation Trustee STA-8

DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29,2003 United States Enrichment Corporation Standby Trust Agreement SCHEDULE C Trustee will be paid [insert amount] annually for services being provided under the standby trust agreement. This fee will apply whether or not payment has been made to the standby trust fund.

STA-9

DFP-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29,2003 Blank Page I

STA-10 GDP 10-0053 Page 1 of 13 GDP Depleted Uranium Management Plan

DEPLETED URANIUM MANAGEMENT PLAN

DU Plan-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page ii

DU Plan-GDPs PGDP Rev. 126 PORTS Rev. 106 December 23, 2010 LIST OF EFFECTIVE PAGES PGDP Revision Pages ii iii iv v

vi 1

2 3

4 5

6 86 126 86 86 86 86 94 126 86 126 86 PORTS Revision 70 106 70 70 70 70 77 106 70 106 70 iii

DU Plan-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page iv

DU Plan-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70 CONTENTS 1.0 INTRO DUCTIO N...............................................................................................................................

1 2.0 DEPLETED URANIUM PRODUCTION ESTIMATES............................................................

1 3.0 MANAGEMENT AND DISPOSITION PLAN............................................................................

2 4.0 ITEMS ADDRESSED BY COMPLIANCE PLAN.....................................................................

4 T A B L E 1......................................................................................................................................................

5 v

DU Plan-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page vi

DU Plan-GDPs December 29, 2003 PGDP Rev. 86 PORTS Rev. 70

1.0 INTRODUCTION

Under 10 Code of Federal Regulations (CFR) 76.35(m), the United States Enrichment Corporation (USEC) is required, as part of its application for a certificate of compliance, to provide:

"A description of the program, as appropriate, for processing, management, and disposal of mixed and radioactive wastes and depleted uranium generated by operations. This description must be limited to processing, management, and disposal activities conducted during operation of the facilities while under lease to the Corporation. The application must also include a description of the waste streams generated by enrichment operations, annual volumes of depleted uranium and waste expected, identification of radioisotopes contained in the waste, physical and chemical forms of the depleted uranium and waste, plans for managing the depleted uranium and waste, and plans for ultimate disposition of the waste and depleted uranium before turnover of the facilities to the Department of Energy under the terms of the lease agreement between the United States Enrichment Corporation and the Department."

In accordance with 10 CFR 76.35(m), this plan describes USEC's program for the management and disposition of the depleted uranium (DU) produced as part of the enrichment activities at the Portsmouth (PORTS) and Paducah (PGDP) Gaseous Diffusion Plants (GDPs).

USEC's program for the processing, management, and disposal of mixed and radioactive wastes is described in the Radioactive Waste Management Plan submitted as part of this application.

2.0 DEPLETED URANIUM PRODUCTION ESTIMATES The production of depleted uranium will continue throughout the period that enrichment activities are conducted at the GDPs. The production rate of depleted uranium is a function of the demand for enriched uranium, the portion of that demand supplied by the Russian enriched uranium, and the operating mode of the plants (determined by power load, power costs, enrichment levels, and other factors). USEC's projected depleted uranium production estimates for both GDPs cover the period of the Nuclear Regulatory Commission (NRC) Certificate of Compliance. The estimates are provided in Table 1, along with the amount of depleted uranium that USEC is responsible for, taking into account the factors discussed in Section 3.0 below.

The funds set aside for the disposition of depleted uranium at the GDPs will be based on the actual production rates of depleted uranium at the plant during the period that the plant is operated under the USEC/DOE Lease Agreement. USEC's funding plan for the disposition of depleted uranium is described in the Decommissioning Funding Program Description submitted as part of this application.

I

DU Plan-GDP February 25, 2005 PGDP Rev. 94 PORTS Rev. 77 3.0 MANAGEMENT AND DISPOSITION PLAN The depleted uranium is currently being stored as solid uranium hexafluoride (UF6 ) in carbon steel cylinders at the GDP plant sites (cylinder storage is described in PGDP SAR Section. 3.7.2 and PORTS SAR Section 3.2.4.4).

The cylinders meet specific design requirements and special procedures and handling equipment are used for DU cylinder handling, movement, and stacking. USEC can continue to store depleted uranium in the solid state in these cylinders for an extended period without undue risk. In addition, cylinder inspections are conducted, as described below, to provide evidence of continued cylinder integrity.

The cylinders used for the storage of depleted uranium are inspected prior to being filled. After filling, the cylinder is cooled and then moved to a cylinder yard and stacked in place. After the cylinder is stacked in position, a baseline (initial) storage inspection is conducted at which point any damage to the cylinder is identified.

If the cylinder is damaged, supervision is notified promptly and the damage evaluated for any actions required; the range of actions are to be commensurate with the cylinder damage. After the initial inspection, the cylinders are inspected every four years thereafter (except for any cylinders identified in the initial inspection as requiring a more frequent inspection); the condition of each cylinder is documented using a cylinder inspection data sheet.

Initial and quadrennial inspections are conducted on full cylinders that are normally single or double stacked. These inspections, conducted from ground level, with or without visual aids, are made using the following criteria:.

Cylinders positioned incorrectly (e.g., with valves in other than top center position); this often is an indication of potential. stacking damage.

Improperly stacked cylinders with potentially damaging contact (e.g., lifting lug resting on cylinder body, stiffening ring resting on stiffening ring, other criteria as described in the inspection procedure).

Dents, bulges, cracks, metal loss, apparent by visual inspection, on the longitudinal and circumference welds.

Dents, bulges, cracks, gouges, stacking damage, excessive scale or rust, apparent by visual inspection, on the cylinder shell.

Bends, cracks or breaks from shell, impact damage, gouges, apparent by visual inspection, on the stiffening rings.

Tears, dents, cracks, excessive scale or rust, or plugged weep hole, apparent by visual inspection, on the cylinder skirt (or valve protector).

Depleted uranium in the form of solid UF6 is suitable for conversion to other chemical forms. For example, the solid UF6 could be converted to U30 8, UF4, or uranium metal. There are a number of 2

DU Plan-GDPs December 23, 2010 PGDP Rev. 126 PORTS Rev. 106 existing and potential uses for depleted uranium, including use in radiation shielding material, armor-piercing Frojectiles, and counterweights. It is possible that increased energy costs may make recovery of additional 3rU from the depleted uranium economically feasible in the future and that other potential uses may also be identified. However, the conversion of the depleted uranium to one of these other forms in the near term could either foreclose other uses and disposition options because of the difficulty of processing some of these uranium compounds and the lack of processing facilities, or increase the cost of the ultimate disposition.

Moreover, the amount of depleted uranium that will be produced by USEC in the near term will be relatively small in comparison with the DOE's existing depleted uranium inventory. DOE is currently storing approximately 700,000 MTU of depleted uranium as solid UF6 in approximately 60,000 cylinders stored at various locations on the DOE portions of the GDP plant sites. USEC presently anticipates that the bulk of its inventory of depleted uranium will ultimately be dispositioned in the same manner as the larger DOE depleted uranium inventory.

In the meantime, USEC has established agreements with the DOE that affect USEC's liability associated with the disposal of depleted uranium generated by USEC. These agreements are the "Memorandum of Agreement Between the United States Department of Energy and the United States Enrichment Corporation Relating to Depleted Uranium," dated June 30, 1998, the "Agreement Between the U.S. Department of Energy

("DOE") and USEC Inc. ("USEC")," dated June 17, 2002, and the "Cooperative Agreement Between Department of Energy and USEC Inc. Concerning the American Centrifuge Demonstration Project," dated March 23, 2010.

The "Memorandum of Agreement Between the United States Department of Energy and the United States Enrichment Corporation Relating to Depleted Uranium," dated June 30, 1998 provides for the transfer to DOE of 2,026 48G cylinders containing approximately 16,674,000 Kg of depleted uranium generated by USEC's operations. In accordance with the agreement, USEC made the required full payment of over $50M to DOE, covering the entire quantity of depleted uranium to be transferred. Therefore, the liability to dispose of the full amount of'USEC's depleted uranium specified in the agreement now rests with DOE, further reducing the quantity of depleted uranium to be ultimhately disposed of by USEC. Within these major parameters of the agreement, USEC and DOE agreed to implement the actual transfer of the material on a schedule covering the period of FY 1999 through 2004. Table 1 reflects the transfer.

The "Agreement Between the U.S. Department of Energy ("DOE") and USEC Inc. ("USEC")," dated June 17, 2002, provided, in part, for the DOE taking title of depleted uranium from USEC operations during USEC's fiscal years 2002 and 2003 and one-half the amount of depleted uranium generated during USEC's fiscal years 2004 and 2005. Therefore, as a result of this June 17, 2002 agreement, USEC's liability associated with the disposal of USEC generated depleted uranium was reduced by the quantity of depleted uranium specified in this June 17, 2002 agreement. The quantity of depleted uranium associated with this agreement is reflected in Table 1.

In 2010, DOE and USEC entered into the "Cooperative Agreement Between Department of Energy and USEC Inc. Concerning the American Centrifuge Demonstration Project," dated March 23, 2010, to provide support for the continued development and demonstration of the American Centrifuge technology. DOE agreed to accept title to 13,312,411 kg of DU to enable USEC to release encumbered funds. The quantity of Depleted Uranium associated with the agreement is reflected in Table 1.

In addition to USEC's enrichment operations, USEC also performs contract work for the DOE and DOE contractors at the Portsmouth and Paducah Plants. To compensate USEC for incurred costs associated with these contracts, DOE has taken title to depleted uranium further reducing USEC's liability for the disposal of depleted uranium. The quantity of depleted uranium associated with the compensation for these services is reflected in Table 1.

In addition to the foregoing outlets, USEC will, to the extent practicable, continue to market depleted uranium for uses in military applications, counterweights, and shielding applications. Efforts may also be made to develop other commercial uses that could include shielding for high-level waste storage and shipping casks, or multipurpose canisters being developed for the DOE high-level waste program.

3

DU Plan-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 The remaining inventory will continue to be stored as solid UF6 until it can be processed in accordance with the disposition strategy established by DOE for its inventory.

The estimated cost of conversion and disposition of the depleted uranium is provided in the Decommissioning Funding Program, along with a description of the funding mechanisms that will be used to address USEC's funding liabilities.

4.0 ITEMS ADDRESSED BY COMPLIANCE PLAN Section deleted.

4

DU Plan-GDPs PGDP Rev. 126 PORTS Rev. 106 December 23, 2010 Table 1. Estimated amount of depleted uranium (DU) generated by USEC and its disposition, in metric tons uranium (MTU) for PORTS and PGDP combined.

DU Other Estimated net USEC DU USEC DU Year Generated by DU4 cumulative at PGDP at PORTS USEC' USEC DU 2 July 28, 1998-314003 31001 399 Dec. 31, 2010 CY2011 5146 (5) 36541 36142 399 CY2012 2293 0

38834 38435 399 CY2013 0

0 38834 38435 399 Notes:

1.

2.

Projections are provided through the expiration date of the NRC Certificate of Compliance.

DOE retains liability for depleted uranium generated prior to USEC's privatization (July 28, 1998)7 per USEC Privatization Act (Public Law, 104-'134", Sec 3109, paragraph (a)(3)).

3.

Reflects the cumulative amount of DU since USEC's privatization (July 28, 1998) for which USEC is responsible for disposition.

4.

Includes depleted uranium refed to the cascade or sold.

5

DU Plan-GDPs PGDP Rev. 86 PORTS Rev. 70 December 29, 2003 Blank Page 6

GDP 10-0053 SAFECO Surety Bond Rider

R

[ IDER To be attached to and form part of:

Bond Number dated 12/31/2007 issued by the SAFECO INSURPANCE COMPANY OF AMERICA in the amount of

$58,867.631.00 on behalf of UNITED STATES ENRICHMENT CORPORATION (Principal) and in favor of U.S. NUCLEAR REGULATORY COMMISSION (Obligee)

Now therefore, it is agreed that in consideration of the premium charged, the attached bond shall be amended as follows:

The Bond Aniount shall be amended FROM:

$12,770,000.00 TO:

$39,370,000.00 It is further understood and agreed that all other terms and conditions of this bond shall remain unchanged.

This Rider is to be Effective this 31 st day of December, 20 10.

Signed, Sealed & Dated this 20th day of December, 2010.

UNITED STATES ENRICHMENT CORPORATION By:

(Principal) 57"-Pz--7*v 51

&-C6 /ei, i7 FaztkC(,

F~L//u9.

SAFECO INSURANCE COMPANY OF AMERICA (Sur By:__

KD C, Attorney-in-Fact

ICALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Los Angeles 0 nfll before me, B.

Aleman, Notary

Public, personally appeared KD Conrad who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Ag ALMA Signature COMM18ission # 1774647 B.Aman, Notary Public

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Los Angeles County W~carM.BcpfreOcI2b,2O11

THIS POWEROF ATTORNEY IS NOT VALID UNLESS IT IS PRINTED ON RED BACKGROUND.

4120485 This Power of Attorney limits the acts of those named herein, and they have no authority to bind the Company except in the manner and to the extent herein stated.

SAFECO INSURANCE COMPANY OF AMERICA SEATTLE, WASHINGTON POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS: That Safeco Insurance Company of America (the "Company"), a Washington stock insurance company, pursuant to and by authority of the By-law and Authorization hereinafter set forth, does hereby name, constitute and appoint E. S. ALBRECHT, JR.,

C. K. NAKAMURA, LISA L. THORNTON, MARIA PENA, MARINA TAPIA, EDWARD C. SPECTOR, KD CONRAD, BRENDA WONG, SIMONE GERHARD, NOEMI QUIROZ, ALL OF THE CITY OF LOS ANGELES, STATE OF CALIFORNIA..........................................

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each individually if there be more than one named, its true and lawful attorney-in-fact to make, execute, seal, acknowledge and deliver, for and on its behalf as surety and as its act and deed, any and all undertakings, bonds, recognizances and other surety obligations in the penal sum not exceeding ONE HUNDRED MILLION AND 00/100"****

• • • • • DOLLARS ($ 100,000,000.00...............

• • • • • • ) each, and the execution of such undertakings, bonds, recognizances and other surety obligations, in pursuance of these presents, shall be as binding upon the Company as if they had been duly signed by the president and attested by the secretary of the Company in their own proper persons.

That this power is made and executed pursuant to and by authority of the following By-law and Authorization:

ARTICLE IV - Execution of Contracts: Section 12. Surety Bonds and Undertakings.

Any officer or other official of the Corporation authorized for that purpose in writing by the Chairman or the President, and subject to such limitations as the Chairman or the President may prescribe, shall appoint such attorneys-in-fact, as may be necessary to act in behalf of the Corporation to make, C

execute, seal, acknowledge and deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. Such attorneys-in-fact, subject to the limitations set forth in their respective powers of attorney, shall have full power to bind the'Corporation by their signature and executed, such instruments shall be as binding as if signed by the president and attested by the secretary.

ca By the following instrument the chairman or the president has authorized the officer or other official named therein to appoint attorneys-in-fact:

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Pursuant to Article IV, Section 12 of the By-laws, Garnet W. Elliott, Assistant Secretary of Safeco Insurance Company of America, is authorized to M--

oC appoint such attorneys-in-fact as may be necessary to act in behalf of the Corporation to make, execute, seal, acknowledge and deliver as surety >ju.

any and all undertakings, bonds, recognizances and other surety obligations.

That the By-law and the Authorization set forth above are true copies thereof and are now in full force and effect.

0 IN WITNESS WHEREOF, this Power of Attorney has been subscribed by an authorized officer or official of the Company and the corporate seal of O-,

Safeco Insurance Company of America has been affixed thereto in Plymouth Meeting, Pennsylvania this 17th day of September C. "

2010

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~~SAFECO INSURANCE COMPANY OF AMERICA 0.C 0ýBy

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Garnet W. Elliott, Assistant Secretary 0

COMMONWEALTH OF PENNSYLVANIA ss COUNTY OF MONTGOMERY On this 17th day of September

, 2010

, before me, a Notary Public, personally came Garnet W. Elliott, to me known, and 0

acknowledged that he is an Assistant Secretary of Safeco Insurance Company of America; that he knows the seal of said corporation; and that he 04 executed the above Power of Attorney and affixed the corporate seal of Safeco Insurance Company of America thereto with the authority and at the Co direction of said corporation.

.V c) 00 IN TESTIMONY WHEREO av&th o subscribed-my name and affixed my notarial seal at Plymouth Meeting, Pennsylvania, on the day and year 0 0 first above written.

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T OF

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CEIFCAE y

E Mr. 2. 20ir 3 J Tere~a Pastella, Notary Public CERTIFICATE 1

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I, the undersigned, Assis Safeco Insurance Company of America, do hereby certify that the original power of attorney of which the foregoing is a full, true n c'b py, is in full force and effect on the date of this certificate; and I do further certify that the officer or official who executed the said power of attorney is an Assistant Secretary specially authorized by the chairman. or the president to appoint attorneys-in-fact as provided in Article IV, Section 12 of the By-laws of Safeco Insurance Company of America.

This certificate and the above power of attorney may be signed by facsimile or mechanically reproduced signatures under and by authority of the following vote of the board of directors of Safeco Insurance Company of America at a meeting duly called and held on the 18th day of September, 2009.

VOTED that the facsimile or mechanically reproduced signature of any assistant secretary of the company, wherever appearing upon a certified copy of any power of attorney issued by the company in connection with surety bonds, shall be valid and binding upon the company with the same force and effect as though manually affixed.

IN TESTIMONY WHEREOF, I have hereunto subscribed my na n

xed the corporate seal of the said comp isCis.) 07.n 10nday of David M. Carey-, Assistant Secretary GDP 10-0053 Standby Trust Schedules A, B, and C

United States Enrichment Corporation Standby Trust Agreement SCHEDULE A This Agreement demonstrates financial assurance for the following cost estimates for the following licensed activities:

U.S. NUCLEAR REGULATORY COMMISSION CERTIFICATE OF COMPLIANCE NUMBER GDP-I and GDP-2 NAME AND ADDRESS OF LICENSEE ADDRESS OF LICENSED ACTIVITY United States Enrichment Corporation 6903 Rockledge Drive Bethesda, Maryland 20817 3930 State Route 23/Perimeter Road Piketon, Ohio 45661 5600 Hobbs Road Paducah, Kentucky 42001 COST ESTIMATE FOR REGULATORY ASSURANCES DEMONSTRATED BY THIS AGREEMENT

$215,800,000 The cost estimates listed here were submitted to the NRC on December 23, 2010.

The Total Cost of decommissioning the GDP's, assuming no liability for decontamination, is as per the decommissioning cost estimate on file with the NRC.

United States Enrichment Corporation Stephen S. Greene Vice President, Finance and Treasurer U.S. Bank N.A.

Melody I Sco,

ssistant Vice President and Account Manager

United States Enrichment Corporation Standby Trust Agreement SCHEDULE B AMOUNT: $215,800,000 AS EVIDENCED BY:

-Westchester Fire Insurance Company Bond Number

-Westchester Fire Insurance Company Bond Number

-SAFECO Insurance Company of America Bond Number

-Argonaut Insurance Company Bond Number

-National Union Fire Insurance Company of Pittsburgh, PA

$30,800,000

$63,300,000

$39,370,000

$15,000,000 Bond Number

$67,330,000 United States Enrichment Corporation U.S. Bank N.A..,

Stephen S.

Vii Melody President and Account Manager LETTER OF ACKNOWLEDGEMENT STATE OF: Virginia CITY OF: Richmond On theo29day of December, 2010, before me, a Notary Public in the for the city and state aforesaid, personally appeared Melody M. Scott, and she did depose and say that she is the Trust Officer of U.S.

Bank N.A., Trustee, which executed the above instrument, that she knows the seal of said association, that the seal affixed to such instrument is such corporation seal; that it was so affixed by order of the association; and that she signed her name thereto by like order.

Signature of Notary Public My Commission Expires:

1/

2614

United States Enrichment Corporation Standby Trust Agreement SCHEDULE C Trustee will be paid $1,500.00 annually for services being provided under the standby trust agreement.

This fee will apply whether or not payment has been made to the standby trust fund.

GDP 10-0053 Analysis of Depleted Uranium Disposal Costs For the Gaseous Diffusion Plants GDP 10-0053 Analysis of Depleted Uranium Disposal Costs For the Gaseous Diffusion Plants The United States Enrichment Corporation (USEC) has developed the depleted uranium disposal cost estimate for the depleted uranium located at the Gaseous Diffusion Plants (GDPs) based on a methodology and supporting data provided by the Department of Energy (DOE) in support of USEC Inc.'s American Centrifuge Plant (ACP) licensing activities. This methodology and supporting data was contained in a redacted report prepared by the DOE's consultant LMI (LMI report, Reference 1),

detailing its methodology for estimating the unit cost of disposal of depleted uranium at the DOE's DUF6 Conversion Facilities. The report was initially prepared by the DOE's contractor in response to a request by Louisiana Energy Services (LES) to support its application for the National Enrichment Facility (NEF) but the methodology and underlying information are applicable to the GDPs with only minor adjustments.

Using the DOE contractor's methodology, USEC, Inc. developed a depleted uranium disposal cost estimate in support of USEC Inc.'s ACP licensing activities which has been accepted by the Nuclear Regulatory Commission (NUREG-1851, Reference 2). This unit cost for disposal of ACP generated depleted uranium was developed based upon costs associated with processing of the ACP depleted uranium at the DOE's DUF6 Conversion Facility located in Piketon, Ohio, and was used as a basis to calculate the disposal cost for GDP depleted uranium located at PORTS. Consistent with the estimated unit cost proposed for disposal of the ACP depleted uranium, and escalating this disposal cost to 2011 dollars, the depleted uranium disposal cost for USEC's GDP depleted uranium located at PORTS is estimated to be $5.03/kgU. The specific analysis is attached as Table 1. Using the ACP unit cost as a basis for estimating the disposal cost for GDP depleted uranium located at PORTS is appropriate since 1) the PORTS and ACP depleted uranium are co-located on the same reservation, 2) for the purposes of decommissioning funding, USEC currently anticipates processing the PORTS and the ACP depleted uranium at the DUF6 Conversion Facility in Piketon, Ohio, 3) the total quantity of PORTS depleted uranium is a small percentage (less than V2 of 1 percent) of the total ACP depleted uranium, and 4) if incorporated into the ACP unit cost analysis, processing the additional GDP depleted uranium would have a negligible impact on the estimated ACP unit cost.

USEC used the same methodology and supporting data provided by DOE in support of the ACP licensing activities to develop a PGDP-specific cost estimate to process USEC depleted uranium located at PGDP at the DOE's Paducah DUF6 Conversion Facility. Based on the information provided by DOE, USEC determined that $4.44/kgU (in 2011 dollars) is a reasonable depleted uranium disposal unit cost estimate for the purposes of decommissioning funding of USEC's depleted uranium located at PGDP. The PGDP-specific analysis is attached as Table 2.

These analyses utilized Scenarios 1 and 2 from the LMI report for the LES NEF (referred to as the "new uranium enrichment facility" in the LMI Report) as the base case for the Paducah and Portsmouth DUF6 Conversion Facility cost estimate.

Reference:

1. LMI Government Consulting, Report DE523T1, An Analysis of DOE's Cost to Dispose of DUF6, Revision 1, July 2005 [Redacted January 31, 2006].

2. NUREG-1851, Safety Evaluation Report for the American Centrifuge Plant in Piketon, Ohio GDP 10-0053 Table 1 Attached

Scenario 2: Process at Portsmouth in "Base" Plant Based on "An Analysis of DOE's Cost to Dispose of DUF6 - Revision 1", LMI, July 2005 Investment costs Plant construction ($000)

Less: Contingency (20%)

Plant construction, net of contingency DOE USEC - Portsmouth GDP USEC - ACP Total Annual Capacity Years to Process USEC-ACP pro rata share USEC pro rata investment cost Investment cost in equivalent annual value (c)

Investment equivalent annual cost per Kg DUF6 Annual operating costs Plant operations Less: Contingency (10%)

Plant operations, net of contingency Plant recapitalization costs Transportation to Portsmouth costs Product disposal Surveillance and maintenance costs Decon & Decommissioning Plant D&D cost ($000)

USEC-ACP pro rata share USEC pro rata D&D cost Equivalent uniform annual cost (c)

Equivalent annual cost per Kg DUF6 Federal administrative charge (3%)

Total per Kg DUF6 Total per Kg DU 133,800 (22,300) 111,500 DUF6 (MT) 245,700 533 214,400 460,633 13,500 34 47%

52,026 2,636 2011 dollars per Kq DUF6 per Ka DUF6 (d) 0.42 0.48 (d) 1.76 (0.16) 1.60 0.33 0.37 0.003 1.82 (e) 0.37 (e) 0.42 (e) 0.003 (e) 47,600 47%

22,210 1,125 0.18 0.09 2.99 4.43 0.21 (d) 0.10 3.40 5.03 Assumptions:

(a) Plant remains in operation until the DOE backlog and USEC-ACP DUF6 are processed.

(b)

USEC-ACP DUF6 is treated concurrently with other DUF6.

(c) Using LMI methodology, cost includes a 3.5% annual charge applied to both current capital expenditures and future D&D expenditures over the projected life of the plant.

(d) Cost escalated from 2004 dollars to 2011 dollars based on the following:

(i) the Implicit Price Deflator of the Gross Domestic Product -

IPD-GDP Annual increase 2004 96.770 2005 100.000 3.3%

2006 103.257 3.3%

2007 106.296 2.9%

2008 108.619 2.2%

2009 109.615 0.9%

(ii) CBO's August 2010 estimate of inflation as measured by a forecast of the GDP index -

2010 0.8%

2011 1.0%

(e) DOE's projected operating costs in 2008 dollars were de-escalated to 2004 dollars by LMI using a DOE-suggested factor of 10.5%,

which equals the following annual rates issued by DOE's Office of Engineering and Construction Management in January 2004:

Escalation Rate Assumptions for DOE Projects - Operations and Management:

2005-2.7%

2006-2.6%

2007 - 2.4%

2008 - 2.4%

Compound Rate - 10.5%

Operating costs in 2004 dollars are escalated to 2008 dollars using these inflation factors, then after 2008 using the factors described in note (d) above.

GDP 10-0053 Table 2 Attached

Scenario 1: Process at Paducah in "Base" Plant Based on "An Analysis of DOE's Cost to Dispose of DUF6 - Revision 1 ", LMI, July 2005 2011 dollars Investment costs per Kq DUF6 per Kq DUF6 Plant construction ($000) 151,700 Less: Contingency (20%)

(25,283)

Plant construction, net of contingency 126,417 DUF6 (MT)

DOE 421,200 DOE from USEC - March 2010 19,693 USEC - Paducah GDP 56,856 Total 497,749 Annual Capacity 18,000 Years to Process 28 USEC-GDP pro rata share 11%

USEC pro rata investment cost 14,440 Investment cost in equivalent annual value (c) 823 Investment equivalent annual cost per Kg DUF6 0.40 0.46 (d)

Annual operating costs Plant operations 1.45 Less: Contingency (10%)

(0.13)

Plant operations, net of contingency 1.32 1.50 (e)

Plant recapitalization costs 0.28 0.32 (e)

Transportation to Paducah costs Product disposal 0.37 0.42 (e)

Surveillance and maintenance costs 0.003 0.003 (e)

Decon & Decommissioning Plant D&D cost ($000) 57,150 USEC-GDP pro rata share 11%

USEC pro rata D&D cost 6,528 Equivalent uniform annual cost (c) 372 Equivalent annual cost per Kg DUF6 0.18 0.21 (d)

Federal administrative charge 0.08 0.09 Total per Kg DUF6 2.63 3.00 Total per Kg DU 3.89 4.44 Assumptions:

(a) Plant remains in operation until the DOE backlog and USEC-GDP DUF6 are processed.

(b) USEC-GDP DUF6 is treated concurrently with other DUF6.

(c) Using LMI methodology, cost includes a 3.5% annual charge applied to both current capital expenditures and future D&D expenditures over the projected life of the plant.

(d) Cost escalated from 2004 dollars to 2011 dollars based on the following:

(i) the Implicit Price Deflator of the Gross Domestic Product --

IPD-GDP Annual increase 2004 96.770 2005 100.000 3.3%

2006 103.257 3.3%

2007 106.296 2.9%

2008 108.619 2.2%

2009 109.615 0.9%

(ii) CBO's August 2010 estimate of inflation as measured by a forecast of the GDP index --

2010 0.8%

2011 1.0%

(e) DOE's projected operating costs in 2008 dollars were de-escalated to 2004 dollars by LMI using a DOE-suggested factor of 10.5%,

which equals the following annual rates issued by DOE's Office of Engineering and Construction Management in January 2004:

Escalation Rate Assumptions for DOE Projects - Operations and Management:

2005-2.7%

2006-2.6%

2007 - 2.4%

2008 - 2.4%

Compound Rate - 10.5%

Operating costs in 2004 dollars are escalated to 2008 dollars using these inflation factors, then after 2008 using the factors described in note (d) above.

GDP 10-0053 Commitments Contained in this Submittal

,USEC will incorporate the DFP and DU Plan changes into a revision to the Application.