USEC Still Fighting, Looking For Support
USEC (USU) got crushed when a loan guarantee thought to be good as gold was denied by the D.O.E., but neither the company nor certain politicians are willing to give up yet.
In late-July, USEC and the town of Piketon, Ohio were dealt a major blow from the U.S. Department of Energy, which denied the company’s request for a $2 billion loan guarantee. Piketon was to be the site of the American Centrifuge Plant, a project that President Obama pledged to support while on the campaign trail. According to The Herald-Dispatch, USEC had depended on the loan guarantee to finance the plant, and without it thousands of workers in Ohio and other states will be impacted.
In the wake of the loan rejection, USEC has been trying to bolster its case. The company appointed Christine M. Cirrone as senior vice president of external relations last week – a move likely aimed to assist in lobbying efforts. Meanwhile a number of Tennessee state senators have joined other politicians pushing for the project. So far their efforts have convinced DOE secretary Steven Chu to reconsider, offering USEC “the time it needs to more fully test its technology and develop additional financial support for the project.” While it was a step in the right direction for USEC, there is still no telling whether the company will be able to reverse the DOE’s prior judgment.
A loan guarantee for USEC would be good news for other companies in the uranium and nuclear industries. The DOE’s decision to deny the loan was a blow to the entire industry, as stated in The Herald-Dispatch, it “represent[s] a major set back for advanced energy production in this country.”
U.S.-based companies Constellation Energy Group (CEG), American Ecology Corporation (ECOL), EnergySolutions (ES), and Landauer (LDR) are all tied to the nuclear industry, which would undoubtedly benefit from government support for the industry.
The Nuclear Stocks Index is one of the ten worst-performing tickerspy Indexes over the last month, down by -8%.
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(USU) USEC – surprised 3 out of the last 4 quarters by an average of 62.38% (Stock Blog Hub, 2/17/09)
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