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.
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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