Updated at 5:28 p.m. EST.

Energy Secretary Steven Chu has pledged $44 million to support continued operations at a troubled uranium enrichment plant in Ohio that failed to receive a $2 billion federal loan guarantee.

Chu told House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) in a Jan. 13 letter that the Energy Department will assume $44 million in liability while working with Congress to support the $5 billion American Centrifuge Plant in Piketon, Ohio. The letter was also sent to House appropriators.

"To make a down payment on the research effort while giving Congress the additional time it needs to act, the department has decided to use its administrative authority to provide near term assistance," Chu wrote. "Specifically, the department will assume $44 million in liability for uranium tails while taking precautions to protect taxpayers."

The U.S. Enrichment Corp. currently operates a limited number of demonstration centrifuges at the plant, and the department's support will help transition the facility into a research, development and demonstration program, said Paul Jacobson, a spokesman for USEC. The Ohio plant would be the first to use domestic gas centrifuge technology to produce low-enriched uranium for nuclear reactors.

Chu touted the centrifuge technology in Ohio as an innovative approach to enriching uranium that offers both "national security and economic benefits." He also said DOE's proposal in October to launch a research and development program there is the best way to help the plant achieve commercial viability. DOE had asked for "transfer authority" to use $150 million of existing funds to bring the plant closer to commercial viability.

Despite the praise, USEC has faced repeated challenges in obtaining federal support for the Ohio plant. An omnibus bill funding the rest of the current fiscal year blocked DOE's request for $150 million. The department has also refused to grant USEC a federal loan guarantee since 2008 because of concerns over the company's ability to finance and execute the project.

Ohio Republicans have criticized the Obama administration for not providing USEC a federal loan guarantee and supporting about 8,000 jobs the project could generate. USEC has warned that the project and jobs in the state are in jeopardy if Congress does not step in and that demobilizing the project could make it more difficult to restart operations later.

Sixteen House Republicans -- including House Speaker John Boehner (R-Ohio) -- sent Chu a letter on Jan. 12, asking him to use the agency's existing authority to ensure the Ohio project moves forward. The lawmakers also said they trust Chu will include the project in the president’s 2013 budget request, which would enable Congress to consider it through regular order during the appropriations process.

The Republicans also asked Chu to use depleted uranium "tails" at USEC's plant in Kentucky as a source of enriched uranium.

The issue is likely to gain more political attention in the coming months.

A number of Ohio lawmakers have introduced legislation to support the Piketon plant. Ohio Sens. Sherrod Brown (D) and Rob Portman (R) introduced a measure last month that would shift existing funds at DOE to support the American Centrifuge Plant (E&E Daily, Dec. 19, 2011). Rep. Jean Schmidt (R-Ohio) introduced a similar measure on Dec. 20 that would have given DOE the authority to assess the viability of technologies at the Ohio plant.

Chu sent separate letters to Brown and Portman pledging support for the Ohio plant and explaining the agency's funding decision.

But Democrats and conservatives alike have questioned whether the federal government should be involved in supporting a private venture (Greenwire, Feb. 24, 2011).

Jack Spencer, a research fellow in nuclear energy at the conservative Heritage Foundation, said during an interview that although the centrifuge technology at the Ohio plant is being touted as a national security initiative, administration officials have clearly stated they are interested in making the plant commercially viable and selling uranium into the private market. Whether USEC's technology is viable or not should be a question for the markets, not the federal government, to decide, Spencer said.

Separately, Whitfield and other Republicans are trying to move legislation through Congress that would provide funding to enrich spent uranium at another USEC plant in Kentucky.

Click here to read Chu's letter.