Coal, Gas

Northland Power to build CHP plant at recycled newsprint mill

17 October 2006 — Northland Power Inc. is pleased to announce that its wholly-owned subsidiary, Thorold Co-Gen LP, has signed a long-term contract with the Ontario Power Authority to supply electricity to Ontario consumers from a new combined heat and power plant to be built at the Abitibi-Consolidated Co. of Canada recycled newsprint mill in Thorold, Ontario.

Under the contract, the plant will supply an annual average capacity of 236 MW of electric power to the OPA. The contract was awarded following Northland’s successful bid under the Request for Proposals issued by the OPA in April 2006. Construction of the facility is scheduled to begin in the first quarter of 2007, following the completion of all permitting and financing, and full commercial operations and supply of electricity is expected to commence June 2009.

The plant will be a gas-fired co-generation facility producing both electricity and steam. A 170-MW industrial gas turbine and associated 95-MW steam turbine will generate enough electricity to provide power to the equivalent of 100,000 homes in Ontario. The plant will result in an investment of over $400 million in the Thorold region.

In addition, the plant will provide electricity and up to 350,000 lbs per hour of steam to the Abitibi-Consolidated mill, for use in its newsprint manufacturing process. The high efficiency of the new plant, which will replace Abitibi-Consolidated’s ageing steam boilers, will reduce the mill’s production costs to allow it to improve its competitiveness in the market, and help reduce airborne emissions.

The project will be financed by Northland Power Inc., The Manufacturers Life Insurance Company, Sun Life Assurance Company of Canada, Bank of Montreal, and Northland Power Income Fund.