Boralex plant facing uncertain future
By Kathy McCarty
Staff Writer
Two local mills owned and operated by Boralex Inc. — a Canadian-based energy-producing company — are at opposite ends of the economic spectrum, with jobs at the Fort Fairfield facility secured by a recently-approved two-year contract for sale of energy it produces, while employees at the Ashland branch are facing an uncertain future and possible layoffs.
“Boralex Inc. has concluded a power purchase agreement with a trusted and creditworthy counterparty, starting March 1, for its thermal power plant in Fort Fairfield. This two-year contract allows for continued operation of the facility with similar benefits to Boralex,” said Patricia Lemaire, director, public affairs and communications for Boralex.
Efforts are continuing to secure a similar arrangement for energy produced at the company’s Ashland plant. If such a deal cannot be reached by the end of the month, layoffs may be necessary.
“Boralex is working hard to ensure the continued operation of its Ashland thermal power plant. If no contract is completed by March 2011, there is a strong likelihood that Boralex will be forced to suspend operations for an indefinite period,” said Patricia Lemaire.
In its end-of-year financial report, it was noted the 133 percent increase in the wind power asset portfolio and the acquisition of Boralex Power Income Fund were the key developments in 2010 for Boralex Inc., pointing to a good performance in fiscal 2011. These items saw the corporation record its all-time best fourth-quarter earnings before interest, taxes, depreciation and amortization (EBITDA).
The integration of the Fund’s power stations and the commissioning of over 140 MW of wind power during fiscal 2010 significantly increased the corporation’s annual power generation, totaling 2,044,784 MWh in 2010, compared with 1,574,874 MWh in 2009. This growth was also reflected in revenues from energy sales, which rose to $202.9 million in 2010, up from $184.8 million in 2009.
Getting power from the Ashland facility to market has been hampered by limited access to transmission lines to connect to grids either in Canada or points south in the U.S., as well as other factors. Despite the difficulties with the Ashland facility, the company, overall, reports 2010 saw financial improvements in some areas over 2009. Wood residue revenues did, however, decline.
According to the company’s fourth-quarter report for 2010, the corporation’s wood-residue thermal power stations reported revenues from energy sales and EBITDA for fiscal 2010 of $105.4 million and $23.5 million, respectively, compared to $123.4 and $40 million, respectively, in 2009. These declines resulted, in part, from the adverse impact of the termination of the U.S. tax credits program, lower market prices for electricity, foreign currency fluctuations and a drop in REC (Renewable Energy Certificate) prices.
The renewal of the power sales contract at the Fort Fairfield power station and the implementation of a new sorting system for old bark piles at the Senneterre (Quebec) power station are expected to have a positive impact in fiscal 2011.
“Management remains cautious about the thermal power segment’s outlook for 2011, but we’re confident the segment has attractive potential over the longer term,” stated Patrick Lemaire, president and CEO of Boralex.
For the year ended Dec. 31, 2010, Boralex reported net earnings totaling $23.1 million or 61 cents per share (basic and diluted) compared with $24.4 million or 65 cents per share (basic and diluted) for 2009.
“Boralex is poised to reap the benefits of its new assets in 2011, as operating results reflect the full contribution of the wind power stations commissioned in 2010 and the Fund’s power stations,” said Patrick Lemaire. “As the result of the development and acquisition of new assets in 2010, Boralex doubled the installed capacity of its energy portfolio, now totaling 700 MW, in addition to a development project pipeline with partners, exceeding 400 MW. As a result, the strategic goal of 1,000 MW in operation and development has nearly been met.”
