Verso to buy gas-fired power plant co-located at its paper mill in Bucksport, Maine, providing 28% of mill's power; move is in line with plan to cut energy costs for Bucksport mill, which is on two-week shutdown due in part to high natural gas prices
January 27, 2014
(Bangor Daily News)
– Verso Paper Corp. has agreed to purchase the full assets of a power plant that is co-located with its paper mill in Bucksport.
The deal is not final, but Verso plans to acquire 100 percent of Bucksport Energy LLC, which owns and operates a gas-fired power plant that is co-located with Verso's Bucksport paper mill, Verso spokesman Bill Cohen told the Bangor Daily News by phone Monday. The Verso subsidiary acquiring the plant is Verso Bucksport Power LLC. Financial details were not disclosed.
Verso is already a part owner in the power plant. It has owned 28 percent of Bucksport Energy since the plant became operational in 2000. The other two owners of the power plant are Hydro-Quebec and the French company GDF Suez.
Contrary to previous media reports, the power plant does not provide most of its power to the Bucksport mill. Cohen said it provides only 28 percent of the power it generates to the Verso mill while the other 78 percent is sold back to the power grid operated by ISO-New England. In addition to the electricity the plant generates, Verso's mill also uses the power plant's steam in the papermaking process.
Cohen said the deal is a continuation of a strategic plan Verso put in place five years ago.
"As we've looked at all the assets we have or own pieces of, we've slowly been pulling together our comprehensive energy plan and this fits with that," Cohen said. "It provides us with an opportunity to both supply electricity to the mill and to sell power to the grid. This deal provides the mill the opportunity for energy and steam flexibility."
Energy has been a perennial challenge for the Bucksport mill, and other mills throughout the state, as natural gas prices have spiked the past two winters when demand is at its peak. In fact, the Bucksport mill is currently in the middle of a two-week period of downtime, which was taken in part because of high natural gas prices this time of year.
Cohen said the Bucksport mill will start one of its paper machines back up next Monday, with the full mill due to be back in operation by the end of Tuesday, Feb. 4.
He did not speculate on when the deal to acquire Bucksport Energy would be complete.
(c)2014 the Bangor Daily News (Bangor, Maine)
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Industry Intelligence Inc. editor's note: Great Northern Paper LLC's Bucksport, Maine, mill produces lightweight coated groundwood papers for offset and rotogravure printing as well as specialty products, according to the company's website.