Town looking into impact on mill power deal

FORT FRANCES—With news last month that Abitibi-Consolidated has applied to the Ontario Energy Board to split off its hydro-electric generation assets into a subsidiary, the Town of Fort Frances will be looking into how this might affect the historic power agreement here.
“The power agreement is extremely important. The operation of the paper mill is extremely important,” Mayor Dan Onichuk said in an interview Monday.
“There’s a lot of questions out there.”
The mayor noted representatives from the Fort Frances Power Corp.’s board of directors will be at the Aug. 28 council meeting to address the issue.
“We want to talk about the pros and cons. Whether we should be involved in this, whether we should be supporting it or not supporting it,” said the mayor.
“The carrier of that responsibility is the power corporation. We’re going to get a report from them next Monday.
“As far as any sort of direction, that will come from council,” the mayor continued. “But the group responsible for ensuring the power agreement is in place is the [FFPC] board of directors.”
“We’re going to give them [council] an update as to the status of the power agreement in regards to Abitibi pursuing to set up a separate entity for its generation assets,” said FFPC CEO Jim Kibiuk.
The FFPC is the administrator of the historical local mill power agreement on behalf of the Town of Fort Frances, but the deal with the mill is with the Town of Fort Frances, Kibiuk noted.
Mayor Onichuk stressed the application made by Abitibi is “not a done deal.”
But he added there definitely is concern among communities, such as Iroquois Falls, as well as several unions, that the power generation could be split off from the mill, be made into a separate company, and then sell power back to the mill at a profit—making the mill “less viable.”
As for his own opinion as to whether having a separate hydro-electric company will be beneficial or not to the community, Mayor Onichuk said he’ll have to wait for more information.
It was reported back in mid-July that Abitibi-Consolidated has made an application to the Ontario Energy Board to split off its hydro-electric generation assets into a subsidiary.
“We are transferring some our of our hydro assets to another Abitibi-Consolidated affiliate, and this part of our overall plan [is] to look at growing our power business,” Seth Kursman, Abitibi’s vice-president of communications and government affairs, said at that time.
“There’s been some notices put in the paper and that’s because over the next few months, we do need to go through the regulatory process in Ontario to receive the appropriate licences and approvals for the energy affiliate,” he added.
(Fort Frances Times)