Fibrek to Sell Green Energy into Hydro-Québec Distribution Program

Fibrek Inc. (Montreal, Qué., Canada) this week announced that it has agreed to sell green energy produced with cogeneration facilities at its Saint-Félicien, Qué., mill into Hydro-Québec Distribution's Power Purchase Program for electricity derived from forest biomass cogeneration (PAE 2011-01). The 33.23 MW of green energy currently produced by Fibrek is being sold to Hydro-Québec Distribution beginning this past Saturday (May 5) at a price of $106/MW/hr, indexed to the consumer price index (CPI) for a 25-year period. The contract will generate approximately $16 million a year in EBITDA.

"This production will further increase the previously announced 9.56 MW that Fibrek will be supplying to the government corporation starting this December. By the end of this year, the Saint-Félicien mill will be producing 42.79 MW in green energy for Hydro-Québec Distribution," said CEO Pierre Gabriel Côté. "Revenue diversification is a key component of our business plan. In addition, increasing our green energy production fits well within our sustainable development plan and reflects our vision when it comes to innovation for growth," he concluded.

Fibrek is investing approximately $37 million in the construction of a new power plant that will be used to produce the additional 9.56 MW. Over the long term, green energy production will ensure the competitive position of the Saint-Félicien NBSK (northern bleached softwood kraft) pulp mill despite the challenges facing the pulp and paper industry," the company noted.

Fibrek, now majority owned by Montreal-based AbitibiBowater, doing business as Resolute Forest Products (see news item in Weekly Spotlight section above), is a producer and marketer of virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien and in the U.S. at Fairmont, W.Va., and Menominee, Mich., with a combined annual production capacity of 760,000 metric tons. Fibrek has approximately 500 employees.

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