OAK BROOK, IL, Feb. 27, 2014 /CNW/ - Primary Energy Recycling
Corporation (TSX: PRI), a clean energy company that generates revenue
from capturing and recycling recoverable heat and byproduct fuels from
industrial processes, today announced the signing of a new 10-year
tolling agreement between Cokenergy and its site host.
The new 10-year contract, which will be in place through September 30,
2023, replaces the previous contract that had been extended beyond its
original term during negotiations. The new contract provides for
Cokenergy to toll all the electricity and steam generated by the
facility to the site host utilizing waste heat from the adjacent
baseload coke battery.
The pricing structure under the new contract escalates annually and
consists of fixed payments consistent with historical revenues during
year one, and a tiered variable structure for the final nine years of
the contract term. During the tiered variable structure, the economics
of the contract are expected to be substantially similar to those
derived from the original contract provided that Cokenergy performs to
pre-specified operating levels which are within historic operating
ranges.
As a part of this agreement, Cokenergy expects to complete the
approximately US$40 million facility upgrade, begun in 2010, by the end
of 2015. The upgrade schedule has been substantially accelerated from
the original expected completion date of 2018 in order to increase
reliability and efficiency of the plant, as well as to maximize project
revenues and economics for the Company's shareholders. Major upgrades
include, but are not limited to, retubing all 16 boilers, updating the
facility's control system and optimizing the flue gas scrubbing
system.
"The final definitive Cokenergy contract demonstrates our ability to
collaborate with our site hosts to successfully extend contracts on
mutually beneficial terms, just as we have done with the prior contract
extensions on Harbor Coal, North Lake and Portside," said John Prunkl,
President and Chief Executive Officer of Primary Energy. "A key
component of this new contract is compensation for our performance.
Further, with the completion of the Cokenergy contract renewal, the
weighted average contract life of our five facilities is now 14 years
and our next contract expiration is not until 2020."
Cokenergy, Primary Energy's largest facility, is an integrated,
first-of-its-kind combined heat and power facility that provides
electricity, process steam, and environmental services that are
integral to the site host's steel-making operations. The facility has
capacity to supply up to one-fourth of the site host's total electrical
requirements or more than half of its process steam needs.
About Primary Energy Recycling Corporation
Primary Energy Recycling Corporation, headquartered in Oak Brook,
Illinois, owns and operates four recycled energy projects and a 50
percent interest in a pulverized coal facility (collectively, the
"Projects"). The Projects have a combined electrical generating
capacity of 298 megawatts and a combined steam generating capacity of
1.8M lbs/hour. Primary Energy Recycling Corporation creates value for
its customers by capturing and recycling waste energy from industrial
and electric generation processes and converting it into reliable and
economical electricity and thermal energy for resale back to its
customers. For more information, please see www.primaryenergy.com.
Forward-Looking Statements
When used in this news release, the words "anticipate", "expect",
"project", "believe", "estimate", "forecast" and similar expressions
are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions pertaining,
but not limited to, the anticipated benefits of the Cokenergy contract
described in this press release, operating performance, regulatory
parameters, weather and economic conditions and other factors discussed
in the Company's public filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press
release and the Company assumes no obligation to update or revise them
to reflect new events or circumstances except as required by applicable
securities laws.
SOURCE Primary Energy Recycling Corporation
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