June 14, 2011, Vancouver – Conifex Timber
has finalized an Electricity Purchase Agreement (EPA) and a Load Displacement
Agreement (LDA), through a subsidiary company, with BC Hydro in connection with the company's planned
Mackenzie, British Columbia, bioenergy facility. The transactions are subject
to acceptance of EPA by the British Columbia Utilities Commission as an energy
Planned capital expenditures of about $50
million (Cdn.) will upgrade the existing power island infrastructure and
purchase a 36-MW steam turbine generator set. The bioenergy facility is
expected to generate about 230 GWh/year of net energy, enough to power 24,000
B.C. homes annually. The feedstock for the bioenergy facility will be sourced
from a portion of the residuals and former waste products produced at Conifex's
lumber manufacturing and log harvesting operations.
Under the EPA, Conifex will supply a
minimum of about 200 GWh/year of electricity to BC Hydro over a 20-year term,
with deliveries estimated to commence in the third quarter of 2012. The EPA
provides for a fixed price for energy delivered to BC Hydro.
Under the LDA, Conifex is required to
deliver 30 GWh/year of electricity to BC Hydro over a 20-year term paralleling
that of the EPA. The energy delivered to BC Hydro under the LDA shall offset
and supply the energy requirements of Conifex's sawmills located in Mackenzie
over the term of the LDA. In exchange for the company agreeing to supply such
energy for the sawmills, BC Hydro shall provide incentive funding to be used
towards the completion of the bioenergy facility.