The Department of Energy said Friday that it plans to work with the developer of a uranium enrichment project in southern Ohio on research and development to reduce technical and financial risks that have held up the developer's application for a $2 billion loan guarantee.

The loan guarantee application from USEC Inc. is still pending. But, the government and the Bethesda, Md. -based developer of the planned American Centrifuge Plant in Piketon have agreed on a potential project that would involve testing and building clusters of machines used to enrich uranium, Richard Kauffman, senior adviser to the Energy secretary told The Associated Press on Friday.

"We want to be able to demonstrate that the technology would work on a commercial basis," Kauffman said.

He said that if that if that can be done, then it also would be easier for the company to get contracts and attract other investors.

"DOE, USEC and our partners remain supportive of a path to commercializing the American Centrifuge and believe additional work demonstrating this innovative technology would be beneficial to the project," John Welch, president and chief executive of USEC, said in a statement. "This preserves a path for USEC and our shareholders to obtain value from the investment they have made."

The government's part of the funding of the research and development would be capped at $300 million and would have to be approved by congressional committees.

Ohio's GOP U.S. Sen. Rob Portman encouraged the White House to approve the loan for the plant and said he had requested a meeting with Energy Secretary Steven Chu.

"The workers supporting this important national security and energy security project deserve certainty after waiting for more than three years for a final decision," he said.

Ohio's U.S. Sen. Sherrod Brown, a Democrat, called the agreement a positive step for southern Ohio and said the project "shows that when we transcend partisan politics, we can do big things."

If the centrifuge project is successful, Brown said, it could bring as many as 4,000 construction jobs and 400 long-term, full time jobs to Piketon.

"This is the most significant step yet in realizing the thousands of jobs that would be created through the American Centrifuge Project," said Brown, who also has encouraged the Obama administration to move forward with the loan approval process.

The department says it intends to ask for approval to use existing DOE funds for the first $150 million needed for the first phase of the research program. USEC and its partners would pay for 20 percent of the program through a technical verification phase involving the construction of the cascade or initial cluster of centrifuges and 80 percent of the phase that would involve building remaining clusters into a train of multiple clusters.

"When you bring something innovative to the market and are building a factory you want to be sure everything will work on a consistent and practical basis, Kauffman said.

He said it is in the government's interest to have a domestic producer of enriched uranium because nuclear power is an important part of the U.S. fuel supply, representing about 20 percent of the power produced.

The plant to be built in Piketon, about 65 miles south of Columbus, would be at the site of a former gaseous diffusion plant that enriched uranium during the Cold War. It would produce enriched uranium for use in generating electricity at nuclear power plants.