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Corner Brook Pulp & Paper to receive temporary energy exchange

The government of Newfoundland and Labrador has approved a temporary energy exchange agreement as the commissioning of the province’s new hydro generating station is affecting energy supply to Corner Brook Pulp & Paper.

The province’s new Labrador-Island Link is a 1,100-kilometre transmission line that terminates at the Muskrat Falls hydro generating station. Currently, the startup is causing lower levels of water in the Grand Lake reservoir, resulting in a decrease of available energy for Corner Brook Pulp & Paper (CBPPL)’s Deer Lake Power plant, which generates power for mill operations.

Nalcor Energy Marketing (NEM) will broker surplus energy NL Hydro during the commissioning period.

This energy will be provided back to NEM from Deer Lake Power when its water supply from the Grand Lake reservoir returns to normal levels. This energy exchange agreement will not affect ratepayers, and the province is not providing financial assistance to Corner Brook Pulp & Paper (CBPPL), the government says in a statement.

According to CBPPL, the mill requires approximately 107 megawatts of power to run its two paper machines.

Without assistance, a deficit of CBPPL-generated power, resulting from the low water levels in the reservoir, would have forced the shutdown of #2 paper machine, which accounts for approximately 40 per cent of the mill’s production.

A shutdown would result in the loss of more than 200 direct and indirect jobs. It would also have a potential impact on integrated sawmill operations in Hampden, Bloomfield and Cottles Island, which rely on CBPPL as a market for small-diameter timber, wood chips, sawmill residue and supply of saw logs.

The cost of the transmission of power to CBPPL will be the incremental transmission tariff that NEM would have to pay to exchange the energy with CBPPL. The approximate transmission tariff to be paid by CBPPL is $250,000.

“Our government is pleased to support the hard-working people at Corner Brook Pulp and Paper Limited by ensuring this temporary energy exchange which will help it maintain important operations at this challenging time,” says Premier Andrew Furey in a statement.

Darren Pelley, vice-president and general manager of Corner Brook Pulp and Paper Limited, says, “We are grateful for the support of the Newfoundland and Labrador government and very pleased with this energy exchange with Nalcor. Thanks to this agreement, Corner Brook Pulp and Paper will continue to operate at full capacity.”