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Great Lakes committed to competitive rates.

Company signs deal to build $120-million cogeneration plant

Maintaining a competitive rate is the greatest challenge faced today by Great Lakes Power of Sault Ste. Marie, according to the company's president and chief executive officer.

Don Watson says his company is committed to keeping its power rates below Ontario Hydro's to help its major industrial customers - Algoma Steel and St. Marys Paper. He says that it does so with superior productivity and better planning.

According to Watson, the rate difference saves Algoma $4.5 million and St. Mary's $2 million annually.

"We're helping them stay in business in a pretty tough time," Watson says. It is that commitment which has helped earn Great Lakes Power the Northern Ontario Business award for Company of the Year (50 plus employees), an award sponsored by The Royal Bank.

Great Lakes Power was founded in 1895 when the late Francis Clergue recognized the potential of the St. Mary's rapids and bought a troubled hydro-electric project from the town for $260,000.

In return for the investment, the town agreed to exempt the power company from paying taxes for 10 years. It also granted the Tagona Water and Light Company, a subsidiary, an exclusive 20-year franchise to supply the town with water and light.

Work began on a much larger power canal, and four years later the hydro-electric lighting system was operational.

Today Great Lakes Power operates 12 hydraulic power plants on four river systems, and it employs a staff of 140 people. More than half of the electricity it produces supplies four industrial customers, 35 per cent supplies the Sault Ste. Marie Public Utilities Commission and the remainder is sold to customers in rural areas.

Acquired by Brascan in 1973, Great Lakes Power has 50-per-cent ownership of the Louisiana Hydroelectric Company and also half ownership of the Lake Superior Cogeneration Plant.

In 1983 Great Lakes Power invested $116 million to increase the generating capacity of the original Sault. Ste. Marie plant.

In 1990 it completed a $115-million development on the Magpie River near Wawa. The project included a public park with picnic facilities and hiking trails to allow people to enjoy the scenic beauty of the falls.

Earlier this year Great Lakes Power entered into a purchase contract with Ontario Hydro which will result in the construction of a 100-megawatt natural-gas-fired cogeneration facility in Sault St. Marie. The contract was significant because it was the first signed by Hydro since the utility placed a freeze on new private generation projects in late 1991.

The new $120-million facility will produce power for Ontario Hydro and steam for St. Marys Paper. Hydro has signed a 20-year purchase agreement.

Watson says the agreement ended a year of hectic negotiations. But the effort was worthwhile because the cogeneration plant will help eliminate the need for electricity from southern Ontario.
COPYRIGHT 1992 Laurentian Business Publishing, Inc.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Northern Achievement; Great Lakes Power of Sault Ste. Marie
Publication:Northern Ontario Business
Date:Nov 1, 1992
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