IP plans US$100M in capital improvements at its Ticonderoga, New York, paper mill, with expenditure to be offset by 7.8 MW of low-cost power recently allocated by New York State's ReCharge NY program, which helps businesses, others cut operating expenses
TICONDEROGA, New York
May 1, 2014
– International Paper will spend $100 million on capital improvements at its Ticonderoga mill, and ReCharge NY is allocating the company 7.8 megawatts of low-cost power to offset the investment.
State officials were at the Ticonderoga paper mill Wednesday to make the announcement as part of Earth Month.
"This is a signature economic-development initiative," New York Power Authority President Gil Quiniones said at the media event. "The low-cost power provided by the program is a significant way International Paper has been able to cut costs."
He said IP has the only paper mill in the world within a state park, the Adirondack Park.
The mill employs 620 people with a $51.1 million annual payroll and supports an additional 600 to 700 independent loggers and truckers in New York and Vermont.
ReCharge NY was launched by Gov. Andrew M. Cuomo in 2011 to help businesses and other enterprises lower their operating costs, enabling them to reinvest savings in their businesses, protect and create jobs and spur economic development.
The Power Authority administers the program.
It offers up to seven-year contracts for lower-cost power and reserves of at least 350 megawatts for upstate businesses and institutions, 200 MWs for business attraction and expansion and up to 100 MWs for nonprofit organizations.
Getting the power allocation from ReCharge NY is a fantastic benefit for IP, Mill Manager Chris Mallon said from the podium.
"This is an exciting time in the history of the Ticonderoga mill," he said. "We take pride in our location and in sustaining our environment.
"We're very, very appreciative of your (the state's) efforts on our behalf."
The Ticonderoga mill makes a premium paper product, IP Vice President for Commercial Printing Papers John Sims said.
"That's because of our fiber source (in Adirondack forests). We have to produce a competitive, high-quality product, and ReCharge NY helps us achieve those goals."
"What the North Country does best is come together to help ourselves," North Country Chamber of Commerce President Garry Douglas said at the event. "The state made it easier for us -- the governor let us say what our priorities are.
"We said we want to help International Paper modernize its fuel sources. A profound thanks to Gov. (Andrew) Cuomo."
International Paper's conversion to natural gas is dependent on a natural-gas pipeline expansion that Vermont Gas Systems wants to build from Middlebury to Rutland, Vt., with a spur under Lake Champlain for the Ticonderoga mill.
A commitment from IP would cover Vermont Gas Systems' cost of constructing the pipeline.
IP would pay $62 million of the $64.4 million cost of the pipeline branch to the mill. Savings is estimated at more than $2 million a year.
And the papermaker would also pay $45 million toward the $70 million it would cost for Middlebury to Rutland extension.
The project is currently before the Vermont Public Service Board for approval and will be built next year if it gets the green light.
The cost of natural-gas conversion itself is $12 million for the power boiler and limekiln at the mill, with $1 million of that from Empire State Development and $750,000 from the New York State Energy Research and Development Authority.
The last speaker at the media event was United Steel Workers Local 497 President Arnold Ross. Jr., who heads the mill's union.
"We do produce the world's finest printing papers here," he said. "We work together diligently to reduce our energy costs."
Ross said IP treats its workers fairly, and that has recharged his spirits.
"This mill is an extension of our community. We're a family."
International Paper's Ticonderoga mill produces up to 850 tons a day of colored and high-quality printing papers.
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