BETHESDA, Md. - USEC Inc. (NYSE: USU) and its Russian partner, Techsnabexport (TENEX), today marked the 10th anniversary of the commercial implementation of the Megatons to Megawatts program. This unique government-industry partnership, which recycles weapons-grade uranium from Russia into fuel for America’s nuclear power plants, has significantly strengthened our national security by eliminating material equivalent to 8,000 nuclear warheads. At the program’s conclusion in 2013, USEC and TENEX will have eliminated the equivalent of 20,000 nuclear warheads.

“The Megatons to Megawatts program has been one of the most successful nuclear nonproliferation initiatives ever undertaken,” said USEC President and CEO William H. Timbers. “Over the past decade, USEC and TENEX have recycled weapons-grade uranium from Russia into enough fuel to power a city the size of Boston or Seattle for nearly 300 years. About 10 percent of America’s electricity now comes from nuclear power plants using this fuel. Since 1994, USEC’s fuel purchases from Russia have exceeded $3 billion and we have completed 40 percent of the program. Perhaps most remarkably, we have done it all commercially, at no cost to taxpayers. This demonstrates that the national security objectives of the United States and Russia and the commercial interests of USEC are being met by this program.”

Origin and Implementation of the Program

In 1993, the U.S. and Russian governments signed an agreement to eliminate 500 metric tons of weapons-grade uranium taken from dismantled Russian nuclear warheads. The 20-year agreement specified that the program be implemented commercially.

On January 14, 1994, in Moscow, USEC and TENEX, as executive agents for the U.S. and Russian governments, signed the 20-year commercial contract that began implementation of the Megatons to Megawatts program. This $8 billion contract established commercial terms for blending down the weapons material in Russia into uranium fuel to be purchased by USEC. Once the weapons-grade uranium is converted into fuel, it is no longer suitable for weapons purposes. USEC markets the fuel to its utility customers for use in their nuclear power plants to produce electricity.

The first shipment of warhead-derived fuel from Russia arrived in the United States in June 1995. To date, 200 metric tons of Russian nuclear warhead material has been recycled into fuel. The fuel from Russia makes up approximately one-half of USEC’s total fuel sales. The other half is produced domestically by USEC at its uranium enrichment plant in Paducah, Kentucky.

Nuclear power plants produce 20 percent of America’s electricity. Nationwide, about one in 10 American homes, businesses, schools and hospitals receive electricity generated from Megatons to Megawatts fuel. Put another way, Russian warheads that were once aimed at American targets are now generating electricity to serve those communities.

“Through this program, commercial nuclear power plants are proving to be the most effective means of eliminating nuclear warhead material,” Timbers said. “The response from our utility customers and the nuclear power industry has been very strong, with more than 100 American nuclear power reactors—virtually the entire U.S. fleet—having used Megatons to Megawatts fuel. Given this record of success, we should encourage the construction of more nuclear power plants that can eliminate even more nuclear warhead material.”

Timbers added, “Over the past decade, USEC and TENEX have established a strong and cooperative working relationship. We look forward to strengthening this relationship in the years ahead while continuing our focus on preventing this weapons-grade uranium from ever falling into the wrong hands. Over the course of this 20-year program we will have eliminated material for 20,000 nuclear warheads.”

Additional information on the Megatons to Megawatts program can be found on USEC’s website: www.usec.com.

USEC Inc., a global energy company, is the world’s leading supplier of enriched uranium fuel for commercial nuclear power plants.

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