Major Sault industries get help with electricity costs (Updated)

A provincial program aimed at reducing energy costs for industry will help get St. Marys Paper Corp. restarted says it's Chairman and Chief Executive Officer Dennis Bunnell.

The mill has been down eight months now and is facing a number of challenges to its plan to restart and diversify into other biomass products that would supplement its paper paper production.

One of the primary challenges to its business plan has been the ability to access electricity at a competitive rate.

"This will certainly help us be more competitive," said Bunnell shortly after Sault MP David Orazietti announced the Northern Industrial Electricity Rate Program at Essar Steel Algoma today.

"It's a big step for restarting the paper making operations and moving the company forward into the bio-economy," he said.

Bunnell said there was no specific date he could offer for a planned restart of the mill but that the company is working very hard to make it happen in the very near future.

The combination of the Northern Industrial Electricity Rate Program and a planned co-gen plant at the mill will certainly help move the company forward and bridge it into the new economy, Bunnell said.

The full text of a release from Orazietti's office follows.

************************* Orazietti announces $55.9 million in energy savings for local industry to protect jobs

Province delivers lower electricity costs for residents and businesses in Sault Ste. Marie SAULT STE. MARIE, ON - The province is supporting Essar Steel Algoma, Tenaris Tubes, Flakeboard Company Ltd. and St. Marys Paper with $55.9 million in savings through the $450 million Northern Industrial Electricity Rate Program (NIERP), which is helping these businesses reduce their electricity costs, stay competitive and protect over 4,000 local direct jobs, David Orazietti, MPP announced today. “The province’s electricity cost saving measures are helping our large local companies maintain their competitive advantage while also protecting jobs as our conservation programs continue to reduce the overall cost of generating energy for both residents and businesses,” said Orazietti.

“We are also focused on reducing energy costs for individuals and families, which is why we created a permanent Northern Ontario Energy Credit and increased the Ontario Energy and Property Tax Credit that when combined with the new provincial Clean Energy Benefit provides substantial energy cost savings for northerners.” Ontario’s three year Northern Industrial Electricity Rate Program is part of the Northern Growth Plan and is providing local companies with savings that include:

- Essar Steel Algoma and Tenaris Tubes: $11.5 million this year and approximately $35 million over three years

- Flakeboard Company: $1.9 million this year and approximately $6.4 million over three years

- St. Marys Paper: $1.5 million this year and approximately $14.5 million over three years. The province’s energy cost saving plan for large industry in Northern Ontario is providing electricity rebates of two cents per kilowatt-hour, which is equivalent to savings of up to 25 percent on energy costs. “Flakeboard is very appreciative of the government’s recognition that Northern Ontario businesses are significantly challenged,” said Mike Rosso, Northern regional director of Flakeboard Company. “This program provides the necessary support for our SSM facility to pursue energy conservation initiatives that would otherwise be very difficult to implement. The provincial government is commended for setting up the program that ensures we are accountable for delivering an Energy Management Plan; a plan that provides measurable gains in energy conservation. These gains will help support the long-term viability of the operation for the benefit of all stake-holders in our community and province.” “Most importantly, the NIER Program motivates northern Ontario employers like ourselves to have strong energy management programs, providing an added economic incentive to invest in capital projects and conservation initiatives that will reduce our energy consumption, lower our operating costs and keep us competitive,” said Jim Hrusovsky, CEO, Essar Steel Algoma. “We commend David Orazietti and the Ontario government for their proactive leadership in this regard. “ "Energy efficiency is important for industrial success and the NIER Program is a valuable tool to foster investments,” said Alberto Iperti, managing director of Tenaris Canada. “Thanks to David Orazietti, MPP the Ontario government and Essar Steel Algoma for their continued actions to improve Northern Ontario competitiveness." “Participation in the Northern Industrial Electricity Rate Program is a critical component of the St. Marys Paper Corp. business development and improvement efforts, as it provides the business with a competitive electricity rate while we transition the business into the bio-economy market place,“ said Dennis Bunnell, chief executive officer of St. Marys Paper. Today’s announcement is in addition to the province’s energy rebates and tax credits for northern residents, small to medium sized Northern businesses, seniors and low to middle-income earning families that include: - Clean Energy Benefit reducing all Ontarians electricity bills by 10 percent of the total monthly bill estimated annually at approximately $150 per household, which came into effect January 1, 2011 - $1.3 billion annually Ontario Energy and Property Tax Credit (OEPTC) assisting 2.8 million Ontarians, including 740,000 seniors - $35 million annually new permanent Northern Ontario Energy Credit, which is available to approximately half of all Northern Ontario residents, up to $200 per family and up to $130 for individuals - $11.8 billion in tax relief over three years to Ontario families and single individuals, including personal income tax reductions

- Transition payments totalling $1,000 for families, including senior couples, with net incomes of $160,000 or less and $300 for single individuals with adjusted net incomes of $80,000 or less. Learn more Read more on Ontario’s support for Northern Businesses.

Find out more about the Northern Industrial Electricity Rate (NIER) program.

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