Chesapeake Utilities Corporation, Florida Public Utilities Company and Rayonier Advanced Materials Celebrate Groundbreaking of Eight Flags Energy, LLC
FOR IMMEDIATE RELEASE
March 25, 2015
CHESAPEAKE UTILITIES CORPORATION, FLORIDA PUBLIC UTILITIES COMPANY AND RAYONIER ADVANCED MATERIALS CELEBRATE GROUNDBREAKING OF EIGHT FLAGS ENERGY, LLC COMBINED HEAT AND POWER PLANT
Chesapeake Utilities Corporation, Florida Public Utilities Company and Rayonier Advanced Materials celebrate the groundbreaking for the Eight Flags Energy, LLC Combined Heat and Power plant in Fernandina Beach, Florida. From the left: Paul Boynton, Chairman, President & Chief Executive Officer, Rayonier Advanced Materials; Jeff Householder, President, Florida Public Utilities Company; and Mike McMasters, President & Chief Executive Officer, Chesapeake Utilities Corporation.
Dover, Delaware — Chesapeake Utilities Corporation (NYSE: CPK) (“Chesapeake”) is pleased to announce the groundbreaking for the new Eight Flags Energy, LLC (“Eight Flags”) Combined Heat and Power (“CHP”) plant. The groundbreaking ceremony was held yesterday in Fernandina Beach on Amelia Island in Nassau County, Florida. The event was hosted by Chesapeake, its subsidiary, Florida Public Utilities Company (“FPU”), and Rayonier Advanced Materials, Inc. (NYSE: RYAM), and was attended by many state, local and company officials.
Eight Flags’ CHP plant, fueled by natural gas, will be built on a site leased from Rayonier Performance Fibers, LLC, a subsidiary of Rayonier Advanced Materials, Inc. The site is adjacent to a Rayonier Performance Fibers cellulose specialties plant. The CHP plant will generate steam for sale to Rayonier Performance Fibers for use in the operation of its cellulose specialties production facility. The CHP plant is expected to be operational in mid-2016. The projected investment to be made by Chesapeake and its subsidiaries in constructing the CHP project and associated facilities is approximately $40.0 million.
“The Eight Flags CHP project is a significant accomplishment. Working with Rayonier, we developed a solution that will provide benefits for all parties involved that are greater than the parties could have achieved individually. FPU customers will enjoy reliable, environmentally friendly electricity in their homes and businesses and recognize significant cost savings in the coming years,” said Michael P. McMasters, President and CEO of Chesapeake Utilities Corporation. “With the additional steam generated by the new CHP plant, Rayonier Advanced Materials will gain greater operational flexibility for their production facility. Finally, Chesapeake’s stockholders benefit as we expand our energy expertise into new unregulated arenas and increase our long-term earnings capacity from projects like this CHP project.”
The CHP plant will produce approximately 20MW of base load power, which FPU will purchase for distribution to its electric retail customers. The Florida Public Service Commission (“FPSC”) has approved a Purchased Power Agreement (“PPA”) for a 20-year term, which is expected to generate approximately $28.0 million in savings to FPU’s electric customers over the life of the PPA.
The FPSC also approved the extension of an existing energy purchased power contract between FPU and Rayonier Performance Fibers. Currently, boilers at the Rayonier Performance Fibers site provide steam and generate electricity, and the company sells the excess electricity generated to FPU. The original contract has been in place and has produced savings for FPU customers for around two years.
The approved extension will extend the term of the original contract for an additional 14 years, from October 2022 to September 2036, and will generate an estimated savings of $8.2 million for FPU customers over the amended contract term and align the term of this contract with that of the PPA.
“We are thrilled to be working with Rayonier Advanced Materials and to start construction on the Eight Flags CHP plant,” added Jeffry M. Householder, President of Florida Public Utilities Company. “Approximately 50 percent of Amelia Island’s electric requirements will be generated on the Island reducing line losses and risks due to a single transmission line.”
“Chesapeake and FPU have proven to be great partners and Rayonier Advanced Materials is excited to be an integral part of their combined heat and power plant project,” stated Paul Boynton, Chairman, President and CEO of Rayonier Advanced Materials. “This new facility not only benefits both companies’ stockholders but it also provides significant value to the residents of Amelia Island through more dependable and cost-effective electric service.”
About Chesapeake Utilities Corporation
Chesapeake Utilities Corporation is a diversified energy company engaged in natural gas distribution, transmission and marketing; electricity distribution; propane gas distribution and wholesale marketing; and other related services. Information about Chesapeake Utilities Corporation and the Chesapeake family of businesses is available at www.chpk.com .
About Florida Public Utilities Company
Florida Public Utilities Company is a wholly-owned subsidiary of Chesapeake Utilities Corporation. Headquartered in West Palm Beach, Florida, FPU distributes natural gas and propane and provides electric services to approximately 100,000 customers in markets throughout Florida. For more information, visit www.fpuc.com .
About Rayonier Advanced Materials, Inc.
Rayonier Advanced Materials is the leading global supplier of high-purity, cellulose specialties natural polymers for the chemical industry. Working closely with its customers, the company engineers natural polymeric chemical chains to create dozens of customized high-purity performance fibers at its plants in Florida and Georgia. Rayonier Advanced Materials’ intellectual property and manufacturing processes have been developed over 85 years, resulting in unique properties and very high quality and consistency. The company’s facilities can produce up to 675,000 metric tons of cellulose specialties products for use in a wide range of industrial and consumer products such as filters, cosmetics and pharmaceuticals. Rayonier Advanced Materials is consistently ranked among the nation’s top 50 exporters and delivers products to 79 ports around the world, serving customers in 20 countries across five continents. More information is available at www.rayonieram.com .
– ### –
Cautionary Note Regarding Forward-Looking Statements: Statements in this release that are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “likely,” “outlook,” “forecast,” “would,” “could,” “should,” “can,” “will,” “project,” “intend,” “plan,” “goal,” “target,” “continue,” “sustain,” “believe,” “seek,” “estimate,” “anticipate,” “may,” “possible,” “assume,” variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that could cause actual results to vary materially from those indicated, including the factors described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each of which is incorporated herein by reference, and in other documents that we file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, the Company does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
For more information, contact:
Jeffry M. Householder President
Florida Public Utilities Company 904.261.3663