St. Marys Renewable Energy Corporation has announced that a [ten-year] power-purchase agreement has been reached with the Ontario Power Authority. Under this agreement, the OPA will purchase the electricity produced by a bio-mass-fueled co-generation plant to be built by SMREC adjacent to Sault Ste. Marie's St. Marys Paper Corp.

"We are excited by this agreement, which has taken several years of hard work by the shareholders and employees of St. Marys, and by the dedicated staff at the OPA," said St. Marys Paper Corp. chairman and CEO Dennis Bunnell.

On Friday Bunnell announced that St. Marys Paper Corporation is in the process of re-starting paper-manufacturing operations. With today's announcement, SMPC is a step closer to accomplishing a primary cornerstone of its business plan by expanding into green, renewable, forestry-based businesses. The co-generation plant will replace SMPC’s aging boilers and allow wood waste to be used as fuel in state of the art boilers- the first of their type in Ontario - which together with a bag house and /or electrostatic precipitators will improve air emissions and meet or exceed Ontario’s new air emission standards to be in force in 2013.

"The construction project alone will create more than 400 jobs provincially and generate $4.5 million in provincial taxes in the region, Once complete the facility will employ 30 people plus provide employment for 125 persons in providing biomass fuel and logistics, while ensuring that St. Marys will have a sustainable, long-term future for our employees, shareholders, and customers," said Bunnell. “Conversion of raw wood fibre to usable high value products requires energy, and this new plant is an essential step the transition of SMPC’s business into the bio economy”

"We want to thank everyone who has worked so hard on the project design, the application process, and the approval process. The direction given by the Ministry of Energy to procure renewable biomass energy, the support for SMPC’s vision by our local MPP David Orazietti, and the efforts expended by SMP and Provincial government staff to this point have been enormous. St. Marys is now in a position to step into the twenty-first century while looking confidently toward the future. We plan to finalize the funding and begin construction in 2011. The co generation plant capital budget is $135 million plus additional capital for integration and soft costs of an additional $40 million. We expect to be producing electricity by early 2014."