More power

Leith Dunick, tbnewswatch.com
From the left: MPPs Bill Mauro and Michael Gravelle, announced Tuesday the province will invest $9.6 million in AbitibiBowater's $51 million combined heat and power facility that will allow the company to produce another 40 megawatts of power each year

Today at 14:49

By Leith Dunick, tbnewswatch.com

Looking for any competitive advantage to survive, Thunder Bay’s AbitibiBowater’s paper plant has gotten the go-ahead – and $9.6 million – from the province to generate an additional 40 megawatts of power each year.

The electricity, enough to power 38,000 homes, will be sold back to the provincial grid through a new 10-year deal with the Ontario Power Authority announced on Tuesday. The $51-million investment will allow the company to produce between 61 and 62 per cent of its annual power needs.

That’s up from 22 per cent, said Doug Murray, general manager of the company's Thunder Bay operations.

“It’s going to save quite a little bit,” said Murray, who would not give an exact figure, citing company privacy rules.

“Between the programs we talked about in January, with the Northern Industrial Electricity Rebate program, and what I call this combined heat and power plant make a significant cost reduction in our electrical costs. It should do us well into the future.”

Earlier this year it was reported the NIER and global adjustment programs would save the company up to $25 million on an annual basis.

“This will be in addition to that,” he said. “It’s a significant addition to the facility and it will help secure the future of the facility.”

The combined heat and power plant involves the use of a condensing turbine already in place. The company will use the existing biomass power boilers already in place to recover heat from the condenser of the condensing turbine, used eight months of the year to heat the incoming mill water.

MPP Bill Mauro (Lib., Thunder Bay-Atkiokan) said the provincial contribution, taken from the Forest Sector Prosperity Fund, is being used for just the type of project it was intended for.

“It’s going to reduce their internal cost, it’s going to provide an additional revenue stream for them should they not use all the electricity internally and almost $10 million of financial assistance is going to help create almost 56 permanent jobs associated with this plant,” Mauro said. “So it’s a great, great piece for a lot of different reasons.”

An added 45 construction jobs are expected to be created during the building phase, which the company hopes to have completed in time to have the CHP up and running by fall 2012.

Mauro said he expects the AbitibiBowater example to create somewhat of a ripple effect around the region, as other companies look for ways to cut costs.

“The fund is in place, other companies are taking advantage of this and it is helping them become more competitive in the long-term. And it’s always good when we see the companies themselves investing their own money.”

MPP Howard Hampton (NDP, Kenora) said while he likes the plan, it’s too little too late for thousands for forestry-related workers who have lost their jobs over the past decade.

“I have to wonder how the McGuinty Liberals could forget about all the workers who used to work at Cascades, who used to work at Abitibi Mission, who used to work at Smurfit Stone, who used to work at Red Rock, who used to work at the Marathon mill, the Kenora mill and the Dryden paper mill,” Hampton said.

“That’s thousands of workers out of work, and in many cases those workers are watching the directly competing mill that’s located in Minnesota or that’s located in Wisconsin continue to produce paper and continue to employ hundreds of people.”

The CHP plan was announced in January, but the company had to clear several hurdles first, including escaping bankruptcy protection.