This section describes nuclear fuel production and uranium enrichment, DOE's and USEC's involvement in uranium enrichment, and cleanup of uranium enrichment plants. Uranium enrichment is the process of raising the concentration of uranium-235, which is the isotope of uranium that undergoes fission to release enormous amounts of energy. Uranium is categorized by its concentration of uranium-235, expressed as a percentage of weight or "assay" level. DOE categorizes uranium in five general types, each of which is characterized by a different assay level and has different uses (see table 1). Uranium undergoes a number of processing steps to produce LEU nuclear fuel, beginning with the mining of uranium ore and ending with the fabrication of LEU fuel for nuclear reactors (see fig. 1). The uranium enrichment stage falls approximately in the middle of the nuclear fuel cycle. As can be seen in figure 1, the enrichment process results in two principal products: (1) enriched uranium hexafluoride and (2) leftover "tails" of uranium hexafluoride. These tails are also known as depleted uranium because the material is depleted in uranium-235 compared with natural uranium. Tails are generally considered an environmental liability. The Nuclear Regulatory Commission (NRC) requires uranium enrichment facility operators to provide financial assurance that funds will be available when needed for the disposition of depleted uranium. To meet these NRC requirements, USEC has used surety bonds--which guarantee payment for the tails disposition costs by a third party, among other things, in the event that USEC defaults on such obligations--to guarantee the disposition of its depleted uranium and stored wastes. LEU resulting from the enrichment process is valued based on two components: (1) the value of the feed component, which is generally natural uranium in the form of uranium hexafluoride, and (2) the value of the enrichment component, or separative work units (SWU), which is the industry standard for the measure of effort needed to transform a given amount of natural uranium into LEU. According to DOE, the United States needs an assured source of tritium to maintain the U.S. nuclear weapons stockpile. In October 2014, we reported on DOE's practice of using only unobligated LEU to meet national security needs for tritium. To produce tritium, DOE has stated that it can only use unobligated LEU. LEU is considered to be unobligated when neither the uranium nor the technology used to enrich it carries an "obligation" from a foreign country regarding its use, such as a requirement that the material only be used for peaceful purposes. These obligations are contained in international agreements to which the United States is a party. In the 1940s, DOE and its predecessor agencies began operating government-owned uranium enrichment plants first to meet national security needs for enriched uranium and later for use as fuel in commercial nuclear reactors. In 1992, United States Enrichment Corporation was established as a government corporation to, among other things, provide uranium enrichment services for the U.S. government and utilities that operate nuclear power plants and to take over operations of DOE's two GDPs in Portsmouth, Ohio, and Paducah, Kentucky. Then, in 1996, the USEC Privatization Act authorized the government corporation's sale to the private sector. Two years later, the government corporation was privatized through an initial public offering on July 28, 1998, which resulted in proceeds to the U.S. government of nearly $1.9 billion. Through privatization, United States Enrichment Corporation became a subsidiary of the new private company USEC Inc. USEC Inc. then changed its name to Centrus Energy Corp after it emerged from bankruptcy in September 2014. Today, United States Enrichment Corporation continues to be a subsidiary of Centrus. The Energy Policy Act of 1992 required the President to transfer to United States Enrichment Corporation, at its request, any intellectual and physical property related to a type of next-generation uranium enrichment technology called atomic vapor laser isotope separation (AVLIS). In 1973, Lawrence Livermore National Laboratory began conducting research on AVLIS--a technology that uses laser light to separate from natural uranium the specific uranium atoms needed to sustain nuclear reactions. Prior to transferring the technology to United States Enrichment Corporation in 1995 for further research and development and for eventual commercialization, DOE spent more than $1.7 billion developing the technology, which, according to USEC, was expected to use significantly less electricity than gaseous diffusion technology. In June 1999, USEC announced that it was suspending further development on AVLIS technology--on which it had spent over $100 million since the company was privatized--and would instead focus on developing other commercially viable enrichment technologies. According to USEC's 1999 Annual Report, USEC determined that the returns from AVLIS would not be sufficient to outweigh the risks and costs of further development, and centrifuge technology was a well-established enrichment process. In 2002, DOE and USEC signed an agreement that committed USEC to pursue the development of gas centrifuge technology. This technology, which is now known as American Centrifuge, is based on gas centrifuge technology originally developed by DOE from the 1960s to the 1980s, after which DOE suspended development, in part due to budget constraints. According to USEC documents, the American Centrifuge technology would be significantly less energy intensive and more cost- efficient than the gaseous diffusion process used in the Portsmouth and Paducah GDPs. Subsequently, in 2004, USEC announced its selection of the Portsmouth plant as the future home of the American Centrifuge Plant--the facility where the American Centrifuge technology would be deployed--and received a license to operate the plant from NRC in 2007. DOE and USEC signed a cooperative agreement in 2012 to share the cost of supporting a research, development, and demonstration program for the American Centrifuge technology. According to USEC, the program ended in April 2014 and achieved all of its technical milestones on time and within budget. In May 2014, USEC and UT-Battelle--the management and operating contractor of DOE's Oak Ridge National Laboratory--signed an agreement to maintain the capability of the American Centrifuge technology. In accordance with the USEC Privatization Act, the government is responsible for all costs incurred by the uranium enrichment program before July 1, 1993, when United States Enrichment Corporation began operating the two GDPs. Due to decreased demand for enrichment services and high costs of operating the GDPs, USEC ceased enrichment operations at the Portsmouth GDP in 2001 and at the Paducah GDP in 2013. These plants, as well as the Oak Ridge GDP (now known as the East Tennessee Technology Park), which was never operated by USEC, are contaminated with hazardous industrial, chemical, nuclear, and radiological materials. Cleanup activities, known as decontamination and decommissioning, include assessing and treating groundwater or soil contamination, disposing of contaminated materials, and making general repairs to keep the plants in a safe condition until they can be fully demolished. According to DOE's 2010 Uranium Enrichment Decontamination and Decommissioning Report, the decontamination and decommissioning of the GDPs will cost billions of dollars and span several decades. DOE is decontaminating and decommissioning the three GDPs in the following phased approach: Oak Ridge GDP: DOE began decontaminating and decommissioning its Oak Ridge GDP in 1994 and estimates that it will be completed in 2024. Portsmouth GDP: DOE began decontaminating and decommissioning its Portsmouth GDP in 2009, announcing that it had contracted with USEC for accelerated environmental cleanup work to prepare the facility for decontamination and decommissioning. In August 2010, DOE entered into a new contract with another contractor (Fluor-B&W Portsmouth LLC) to decontaminate and decommission the former facilities at Portsmouth. According to a March 2014 DOE Office of Inspector General report, the decontamination and decommissioning work at the Portsmouth GDP is currently estimated to extend until 2044. Paducah GDP: DOE has not yet started decontaminating and decommissioning its Paducah GDP. After ceasing enrichment activities in May 2013, Centrus returned full control of the Paducah GDP to DOE in late October 2014. In July 2014, DOE contracted with Fluor Federal Services, Inc., to conduct activities to prepare the facility for eventual decontamination and decommissioning. According to a March 2014 DOE Office of Inspector General report, the decontamination and decommissioning work at the Paducah GDP is currently estimated to extend until 2044. However, according to DOE officials, the department is currently evaluating the projected lifecycle cost and schedule estimates for the Paducah cleanup completion. Since USEC was privatized in 1998 through June 1, 2015, DOE and USEC have engaged in 23 transactions (see app. II for a detailed description of the 23 transactions). Based on our analysis of documents and interviews with DOE officials, we grouped these transactions into the following six broad categories: Establishment of USEC. DOE and USEC engaged in 3 transactions to help establish the company as a private company. For example, DOE transferred enriched uranium to USEC, as required by the USEC Privatization Act, from 1998 to 2003. These transfers established value for USEC in the marketplace. In addition, beginning in 1998, DOE agreed to provide employment transition services to USEC for employees affected by restructuring activities that occurred at the Portsmouth and Paducah GDPs as a result of USEC's privatization. National security. DOE and USEC engaged in 6 transactions for national security purposes. Specifically, DOE engaged in one transaction in 2012 to secure unobligated LEU from USEC to meet national security needs for the production of tritium for up to 18 months, and DOE engaged in a second transaction later in 2012 to secure unobligated LEU from USEC to meet national security needs for the production of tritium for up to 15 years. The other 4 transactions in this category supported the research and development of the American Centrifuge technology to meet long-term national security needs for unobligated LEU, such as for tritium production. For example, in 2010, DOE and USEC signed a cooperative agreement to share the cost of USEC's development and demonstration of the American Centrifuge technology for a year. To provide its share of the cost, DOE took title to and financial responsibility for the disposal of depleted uranium tails from USEC. Facilities management. DOE and USEC engaged in 5 transactions regarding the operation and management of various facilities, including the Portsmouth and Paducah GDPs, as well as other facilities associated with the development of the American Centrifuge technology. For example, in one transaction, DOE signed a lease agreement with United States Enrichment Corporation in 1993--when it became a government corporation--and the lease was transferred to the private corporation when the company was privatized. The agreement included USEC's lease of the Portsmouth and Paducah GDPs, as well as an electric power agreement and an agreement between DOE and USEC to provide certain services for each other related to the use of the GDPs. In another transaction, after USEC ceased enrichment activities at the Portsmouth GDP, DOE contracted with USEC from 2001 through 2011 for several activities associated with maintaining the facility in a dormant condition and preparing the facility for decontamination and decommissioning. Nuclear materials management and security. DOE and USEC engaged in 3 transactions to support the management and security of nuclear materials. In one transaction beginning in 1999, DOE agreed to pay USEC to provide safeguards and security services for HEU that DOE stored at the Portsmouth GDP. In another transaction beginning in 1999, USEC contracted with DOE for the storage of enriched uranium that exceeded the amount of material USEC could possess in its facilities under NRC limits. In the third transaction, from 2005 through 2008, DOE contracted with a USEC subsidiary to manage the U.S. government's nuclear materials tracking system, called the Nuclear Materials Management and Safeguards System. Issues from prior transactions. DOE and USEC engaged in 3 transactions to address issues with previous transfers of uranium when DOE had inadvertently provided USEC with uranium that did not conform to industry standards or more uranium than originally agreed on by the parties. For example, in March 2000, USEC discovered that uranium that it had received from DOE prior to privatization was contaminated with technetium, a radioactive metal that is considered a contaminant by commercial specifications for nuclear fuel. In a 7- year transaction that began in 2002, DOE (1) contracted with USEC to clean up some of the contaminated uranium, (2) provided replacement uranium and monetary payment to USEC, and (3) took title to some of USEC's depleted uranium. In a second transaction, in 2003, DOE transferred HEU to USEC to replace other material that DOE transferred to USEC prior to privatization that did not conform to industry standards. In a third transaction, DOE and USEC addressed the fact that they had underestimated the amount of material stored in certain HEU cylinders that DOE had transferred to USEC prior to privatization. Specifically, DOE had transferred to USEC about 0.8 metric tons of HEU more than initially agreed on. To address this issue, in 1998, USEC agreed to pay DOE about $35 million more than originally agreed on by the parties. Other. DOE and USEC engaged in 3 other transactions since 1998. One transaction--which occurred from 2005 through 2006 and involved DOE, USEC, and a third party--was intended to determine the feasibility and benefits of re-enriching a portion of DOE's depleted uranium inventory for potential use as nuclear fuel in a commercial reactor. In the other two transactions, USEC and its subsidiaries paid a fee for access to DOE restricted data related to the centrifuge technology. Access to this data allowed USEC to utilize DOE centrifuge technology in the development and design of the American Centrifuge technology. See appendix III for a table of the 23 transactions organized by category. Figure 2 shows how the transactions were distributed over the 17-year period that we reviewed. Our analysis shows that the general nature of the transactions evolved over time. Immediately following USEC's privatization, the majority of the transactions were of the establishment of USEC category. In the middle part of the 17-year period, most of the transactions were of the facilities management and nuclear materials management and security categories. In recent years, the majority of the transactions were of the national security category. DOE and USEC have been continuously involved in transactions since 1998. Of the 23 transactions, at least 6 have spanned a decade or longer, while the other transactions were of shorter duration. In addition to the transactions described above, there were at least three other significant arrangements involving DOE and USEC, which were noteworthy because, in each case, DOE or USEC received something of value as part of the arrangement, even though the arrangement did not meet our definition of a transaction. These arrangements were as follows: Before it was privatized, the U.S. government selected United States Enrichment Corporation as the U.S. government's executive agent for the HEU Purchase Agreement--a 1993 nuclear arms reduction agreement between the United States and Russia. USEC continued its role as sole executive agent after its privatization, and activities under the agreement continued through 2013. Under the agreement, United States Enrichment Corporation, and later USEC, purchased LEU from the Russian government's executive agent, which had produced it by downblending HEU taken from dismantled Soviet-era nuclear warheads. Centrus officials told us that USEC used its large backlog of contracts with commercial utilities to place the LEU in the market. According to Centrus officials, this agreement provided a significant source of supply of LEU to USEC over a 20-year period and resulted in the destruction of the equivalent of 20,000 nuclear warheads. We did not identify any exchange of funds between DOE and USEC related to USEC's service as the executive agent. In a December 2006 agreement, DOE granted USEC a nonexclusive patent license for the use or manufacture of the American Centrifuge technology. In this 2006 agreement, USEC agreed to pay DOE a royalty for the use of the American Centrifuge technology. According to DOE and Centrus officials, DOE has never received royalties from USEC or Centrus under this license. According to Centrus officials, the company has not made any payments because it has not yet commercialized the American Centrifuge Plant or sold any material produced by the centrifuge technology. In 2012, USEC granted to DOE (1) an irrevocable, nonexclusive, royalty-free license, for use by or on behalf of the United States, in all centrifuge intellectual property for government purposes and (2) an irrevocable, nonexclusive license in all centrifuge intellectual property, with the right to sublicense to other parties, for commercial purposes. This arrangement was made at a time when there was uncertainty surrounding the future of the American Centrifuge technology. According to Centrus officials, USEC has transferred title to DOE for more than 30 existing centrifuges, built at USEC's expense, as well as all new machines built during the research, development, and demonstration program. DOE identified various monetary and nonmonetary costs and benefits of the 23 transactions. For most transactions that occurred since 2005, DOE officials provided us with information through documents and interviews about the costs and benefits of each transaction. However, for transactions occurring prior to 2005, DOE officials were not always able to provide definitive information about the costs and benefits of the transactions independent of that which was stated in the transactional documents. For transactions occurring after 2005--which mostly fell into the national security category--the costs DOE identified were incurred through the transfer of appropriated funds to USEC, transfer of various types of uranium, and acceptance of responsibility for the future disposition of depleted uranium tails. The benefits DOE identified were both monetary (i.e., payments or a reduction in obligations for the disposal of depleted uranium) and nonmonetary (e.g., LEU, national security benefits such as the development of the American Centrifuge technology). For transactions prior to 2005, DOE officials were not always able to provide definitive information on the costs and benefits to DOE independent of that which was stated in the transactional documents. In some cases, for example, DOE officials told us that key officials familiar with the transactions had since retired or were deceased, and therefore information on the costs and benefits of these transactions was not available. In addition, DOE officials told us that the department changed accounting systems in 2004, and therefore the officials could not always access definitive cost and benefit information prior to 2005. For example, DOE officials provided us with information on USEC's payments to DOE for the lease of the Portsmouth and Paducah GDPs from 2005 to 2014, but they could not provide us with information on USEC's payments prior to 2005. We provided a draft of this report for comment to the Secretary of Energy on July 29, 2015. DOE provided technical comments that were incorporated, as appropriate. We also provided a technical statement of facts to Centrus Energy Corp. We received technical comments from Centrus and incorporated them, as appropriate. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the appropriate congressional committees, the Secretary of Energy, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff members have any questions about this report, please contact me at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. The objectives of our review were to (1) identify transactions involving the Department of Energy (DOE) and USEC Inc. (USEC, now known as Centrus Energy Corp.) since USEC was privatized in 1998 and (2) describe the costs and benefits, if any, of these transactions to DOE, as identified by DOE. For the purpose of our review, we define a transaction as a contract or agreement providing for an exchange of funds, uranium of any type, or services between or involving DOE and USEC. We included in our scope any transactions that occurred between USEC's privatization on July 28, 1998, and present (July 1, 2015), as well as transactions that commenced before July 28, 1998, but that continued to be executed after USEC was privatized. We excluded interactions involving DOE and USEC if no exchange of monetary payment, uranium, or services occurred. To conduct this work, we reviewed and analyzed documents identifying these transactions and collected information regarding the type, purpose, costs, and benefits of the transactions. These documents include annual DOE budget justification materials for fiscal years 1999 through 2016, USEC/Centrus Energy Corp.'s annual reports and corporate filings with the U.S. Securities and Exchange Commission from 1998 through 2015, contracts and agreements between DOE and USEC, and prior GAO reports. Once we identified a preliminary list of transactions involving DOE and USEC, we asked DOE to review the list. DOE officials amended the list and provided documentation for additional transactions to include. Based on our analysis of DOE documents, and through interviews with DOE officials, we added and consolidated certain transactions and removed others that were inconsistent with our definition of a transaction. We ultimately developed a final list of 23 transactions. We also interviewed Centrus Energy Corp. officials and provided an opportunity to review and confirm the final list of transactions to ensure that the list was comprehensive and accurate, and they concurred with the list. We then provided DOE with a standard set of questions regarding the purpose, costs, and benefits of each of the transactions in the list. In two cases, DOE was able to fully complete the standard set of questions. For the other transactions, DOE officials told us that documentation was not fully available to answer the standard question sets for reasons we discuss in the report. Instead, we conducted interviews with DOE officials to collect information that they did know about each transaction, and we reviewed available DOE and USEC documentation to obtain additional information on the costs and benefits of each transaction. See appendix IV for an example of the standard set of questions we provided to DOE officials on each transaction. For the purpose of this review, in cases where data were available, we are reporting DOE-identified costs and benefits of each transaction. To assess the reliability of the costs and benefits that DOE identified for each transaction, we reviewed documents to corroborate DOE-identified costs and benefits. Such documents included contracts, memorandums of agreement, lease agreements, and summary information from DOE/NRC Form 741. Based on these steps, we determined that the information we are reporting on DOE-identified costs and benefits is sufficiently reliable for the purposes of this review. We conducted this performance audit from November 2014 to September 2015 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The Energy Policy Act of 1992 directed the newly created United States Enrichment Corporation to lease DOE's two gaseous diffusion plants (GDP) in Ohio and Kentucky. On July 1, 1993, DOE and United States Enrichment Corporation entered into an initial 6-year lease for the GDPs. When USEC was privatized in 1998, the lease was transferred to the private corporation and eventually renewed through July 1, 2016. However, USEC returned both GDPs to DOE prior to 2016. Portsmouth GDP: On December 23, 2010, USEC notified DOE of its intent to return the leased areas of the Portsmouth GDP to DOE. After ceasing uranium enrichment operations in 2001, USEC maintained the Portsmouth plant in cold standby at DOE's request and subsequently cold shutdown status until 2011. Paducah GDP: On August 1, 2013, USEC notified DOE of its intent to return the leased areas of the Paducah GDP to DOE on October 21, 2014. DOE and USEC were involved in a 10-year transaction related to the closure of the Portsmouth GDP. Activities related to the closure were performed under one contract and represented two phases at the Portsmouth GDP: (1) cold standby and (2) cold shutdown. Cold standby: In June 2000, USEC announced its decision to cease uranium enrichment operations at the Portsmouth GDP in June 2001. On March 1, 2001, the Secretary of Energy announced that DOE would place the Portsmouth GDP in cold standby mode--a dormant condition that would allow operations to be resumed within 18 to 24 months if needed. In August 2001, DOE and USEC signed an agreement for USEC to provide certain services, including those necessary for maintaining the GDP in cold standby mode. Specifically, beginning in 2001, USEC provided a number of services for DOE related to cold standby, including winterization and removal of deposits of uranium hexafluoride from equipment. Cold shutdown: In 2006, DOE and USEC modified the Portsmouth GDP cold standby contract to begin transitioning the GDP to cold shutdown mode. Cold shutdown mode involved work to maintain and prepare the GDP for eventual decontamination and decommissioning. Under this transaction, which spanned 7 years, DOE and USEC contracted for USEC to clean up contaminated uranium; in exchange, DOE provided replacement uranium and payments to USEC and also took title to some of USEC's depleted uranium. Specifically, in early 2001, USEC notified DOE that up to 9,550 metric tons of about 45,000 metric tons of natural uranium that it had received from DOE prior to privatization was contaminated with technetium--a radioactive metal that is produced as a by-product of fission in a nuclear reactor--at levels exceeding the commercial specification for nuclear fuel. After USEC notified DOE of its contaminated uranium, DOE determined that about 5,517 metric tons of uranium in DOE's inventory was also contaminated with technetium. According to USEC, replacing the 9,550 metric tons of contaminated uranium would have cost USEC approximately $238 million in 2001. USEC requested that DOE replace USEC's contaminated uranium with clean uranium from DOE's inventory. DOE did not admit legal liability for compensating USEC for the contaminated uranium. In addition, according to DOE officials, DOE did not have enough available clean uranium in its excess uranium inventory to replace all of USEC's contaminated uranium. However, starting in 2002, DOE and USEC signed a series of agreements to decontaminate or replace USEC's contaminated inventory (see fig. 3 for a summary of the uranium decontamination process). In June 2002, DOE and USEC agreed that, among other things, USEC would process some of the contaminated uranium at the Portsmouth plant for 15 months to remove the technetium. USEC would initially pay about half of the costs associated with decontamination, and DOE would compensate USEC by taking title to some of USEC's depleted uranium, reducing USEC's costs for eventual disposal of this material. As part of the June 2002 agreement, USEC agreed to formally release DOE from any potential claims of liability as USEC decontaminated the uranium. USEC decontaminated about 2,900 metric tons of uranium under this agreement. DOE and USEC signed two subsequent agreements in September and November 2003 that extended USEC's decontamination work through December 2003. In 2004, DOE and USEC signed additional agreements for USEC to decontaminate uranium. Specifically, under an April 2004 work authorization, DOE paid USEC using appropriated funds for decontamination work conducted from December 2003 to December 2004. USEC decontaminated about 2,050 metric tons during this time. In October 2004, DOE replaced 2,116 metric tons of USEC's contaminated uranium with the same amount of uncontaminated uranium. Two months later, in December 2004, USEC agreed to decontaminate an additional amount of contaminated uranium. In June 2006, we reported that DOE had provided USEC about 1,100 metric tons of uncontaminated uranium, which USEC sold on the commercial market for $84.4 million. In addition, in April 2006, DOE sold uranium to obtain funding to compensate USEC for decontamination services that were expected to last from July 2006 through November 2006. According to DOE officials, uranium cleanup activities continued through 2009. In 2005, DOE's Office of Environmental Management, the Bonneville Power Administration, Energy Northwest, and USEC executed a series of agreements to carry out a pilot project to determine whether a portion of DOE's depleted uranium inventory could be used to produce nuclear fuel for Energy Northwest's Columbia Generating Station, a nuclear power reactor near Richland, Washington, the generating capacity of which Bonneville Power Administration had purchased. The depleted uranium tails would be re-enriched and used instead of natural uranium- based feed to produce LEU for the Columbia Generating Station. In March 2012, USEC's financial condition was weakening and, according to DOE officials, USEC was struggling to support the development of the American Centrifuge technology. DOE requested authority to transfer $150 million from existing funds in fiscal year 2012 to support USEC's development of the American Centrifuge technology, but Congress did not provide this authority. Subsequently, DOE entered into a transaction with USEC in March 2012, under which it accepted title to 13,073 MTU of low-assay tails, along with the responsibility for their disposal, from USEC. This enabled USEC to free up $44 million in previously encumbered funds that were being used as collateral for surety bonds to satisfy NRC's financial assurance requirements for the tails' future disposal. In the wake of USEC's bankruptcy filing in April 2014, the Secretary of Energy tasked its Oak Ridge National Laboratory with maintaining the operability of the American Centrifuge technology. As operator of Oak Ridge National Laboratory, UT-Battelle signed an agreement--called the "Domestic Uranium Enrichment - Centrifuge Information and Analysis" agreement--with USEC on May 1, 2014, to maintain the capability of and, where possible, advance the American Centrifuge technology in furtherance of DOE's national security objectives. According to Oak Ridge officials, this agreement provides for the collection of data and provides reports related to the cascade operations and research and development activities. As of January 23, 2015, UT-Battelle had provided USEC $64.5 million in funding. These costs are funded by DOE through UT-Battelle's contract with DOE. Appendix III: Department of Energy Transactions Involving USEC Inc. or Centrus Energy Corp. by Category Category Establishment of USEC Inc. (USEC) In addition to the individual named above, Allison B. Bawden (Assistant Director), Eric Bachhuber, Antoinette Capaccio, Amanda K. Kolling, and Karen Villafana made key contributions to this report. Also contributing to this report were Doreen Eng, Ellen Fried, Risto Laboski, Mehrzad Nadji, Alison O'Neill, Dan C. Royer, and Rebecca Shea.

Summary:
DOE has had a long and complex relationship with USEC Inc. and its successor, Centrus Energy Corp. Until 2013, USEC, a government corporation that was privatized in 1998, was the only company enriching uranium that, according to DOE, could meet DOE's LEU needs for tritium production. However, USEC ceased enrichment operations in May 2013, and the future of its planned next-generation American Centrifuge enrichment facility is uncertain. GAO has previously reported on financial and other transactions involving DOE and USEC, including transactions that involved the transfer of uranium. GAO was asked to report on the history of the financial relationship between DOE and USEC. This report (1) identifies transactions involving DOE and USEC since USEC was privatized and (2) describes the costs and benefits, if any, of these transactions to DOE, as identified by DOE. GAO defines a transaction as a contract or agreement providing for an exchange of monetary payments, uranium of any type, or services between or involving DOE and USEC occurring from USEC's privatization on July 28, 1998, through July 1, 2015. GAO analyzed key DOE and USEC documents and interviewed DOE and Centrus Energy Corp. officials. The Department of Energy (DOE) has engaged with USEC Inc. (USEC) in 23 transactions since USEC was privatized in 1998 through July 1, 2015. The 23 transactions fall into the following six categories: Establishment of USEC . DOE engaged with USEC in 3 transactions to help establish the company as a private company. For example, from 1998 to 2003, DOE transferred enriched uranium, as required by the USEC Privatization Act, to USEC to establish commercial value for USEC. National security . DOE engaged with USEC in 6 transactions for national security purposes. For example, DOE engaged in several transactions to secure domestic low-enriched uranium (LEU), used in nuclear reactors, for the production of tritium--a radioactive isotope of hydrogen used to enhance the power of nuclear weapons--and support the development of USEC's next-generation American Centrifuge uranium enrichment technology. Facilities management . DOE engaged with USEC in 5 transactions regarding the operation and management of various facilities. For example, after USEC ceased enrichment operations at the Portsmouth Gaseous Diffusion Plant (GDP)--which it leased from DOE--DOE contracted with USEC from 2001 to 2011 to maintain the facility in a dormant condition and prepare it for future decontamination and decommissioning. Nuclear materials management and security . DOE engaged with USEC in 3 transactions to support nuclear materials management. For instance, in a transaction beginning in 1999, DOE agreed to pay USEC to provide safeguards and security services for highly enriched uranium (HEU), which is used in nuclear weapons, that DOE stored at the Portsmouth GDP. Issues from prior transactions . DOE engaged with USEC in 3 transactions to address issues with previous transfers of uranium. For example, in 2003, DOE transferred HEU to USEC to replace previously transferred material that turned out to be contaminated and that did not conform to industry standards. Other . In 2 other transactions, USEC and its subsidiaries paid a fee for access to DOE restricted data related to the centrifuge technology. A third transaction involved a pilot project to determine the usability of certain uranium as nuclear fuel. DOE identified various monetary and nonmonetary costs and benefits of the 23 transactions. DOE was able to identify the costs and benefits for most transactions that have occurred since 2005. For these transactions, DOE incurred costs through the transfer of appropriated funds and various types of uranium, as well as acceptance of responsibility for the future disposition of certain uranium. The benefits DOE received include monetary payments, LEU, and nonmonetary national security benefits. For transactions that occurred or began occurring prior to 2005, DOE was not always able to provide definitive information on its costs and benefits, in part because the agency's accounting system changed in 2004, and agency officials were not able to access information on certain transactions occurring prior to that time. GAO is not making recommendations in this report. DOE reviewed a draft of this report and provided technical comments that GAO incorporated as appropriate.