Exelon, the largest nuclear generator in the U.S., on Thursday signed a $1.2 billion contract to purchase separative work units (SWUs) from USEC’s American Centrifuge Plant to fuel its reactors starting in 2012.

USEC’s American Centrifuge Plant will be the only commercial enrichment facility in the U.S. to use the Energy Department’s U.S. gas centrifuge technology. Earlier this year, the DOE had rejected USEC’s $2 billion application for a loan guarantee, though later this August, the agency agreed to delay final review of USEC’s application for six months to allow it to address shortcomings.

As a result of delays and uncertainty in funding, USEC said on Thursday it had began demobilization of certain project activities in August 2009 while it works to resolve the DOE’s technical and financial concerns. Meanwhile, USEC claims that the deal with Exelon—signed during the World Nuclear Association’s Annual Symposium in London—increases its customer commitments for output from the new plant to $3.4 billion.

Sources: Exelon, USEC