St. Marys Paper to build co-gen plant

Nov. 11, 2010, Toronto – The Ontario Power Authority
and St. Marys Paper Corporation have signed a 10-year contract for the paper
company to generate renewable electricity at a new biomass-fuelled plant to be
built next to its existing mill in Sault Ste. Marie, Ontario. St. Marys
Renewable Energy Corporation will operate the new plant, which is contracted to
supply 30 MW of electricity. About 555 direct and indirect jobs will be
associated with the project, for which construction is expected to start in
2011. It is expected to reach commercial operation by early 2014.

The plant's primary fuel source will be biomass, including
bark and waste wood. The heat it provides will be used in the mill's industrial
processes, and the electricity that is not used by the mill will be sold to the
grid.

"We are delighted to announce this contract," says
OPA CEO Colin Andersen. "We recognize the strategic importance of this
project to the mill and to Sault Ste. Marie, and we are glad we could reach an
agreement that works for St. Marys and serves Ontario ratepayer
interests."

Recognizing the importance of a secure biomass supply to the
success of the project, St. Marys has negotiated a commitment of up to 400,000
tonnes of biomass annually from the Algoma and Northshore Crown Forests for the
life of the project. The project will meet all Ontario Ministry of the
Environment requirements. The biomass boiler technology chosen for the project,
a bubbling fluidized bed boiler, will decrease overall emissions. Existing
boilers at the mill will be decommissioned, thereby improving the emissions per
tonne of fuel consumed.

OPA and St. Marys have been in negotiations since August
2009, working to secure an agreement after the company submitted an initial bid
in OPA's combined heat and power III procurement process for projects using
renewable energy.