<b>High Energy Costs Force Shutdowns</B>

The escalating price of power, especially on the West Coast is creating havoc for many energy intensive operations. With the deregulation of the California power industry the cost of power for some manufacturers has soared to a level where some operations are considering shutting down.

A California paper mill, Shasta Paper, announced its closure. The company, a division of Plainwell Paper, cited high natural gas prices as the reason for the close. The company is presently working with the gas company, Pacific Gas & Electric, for lower energy costs.

The company hopes to re-open the mill by next week. The mill produces printing and writing paper, packaging paper and market pulp.

The close of this facility earlier this year was followed by the announcement, late this week, that Georgia-Pacific Corp. would close its Bellingham, Wash., pulp and paper mill. The company cited soaring energy costs as the main reason for the shutdown. According to local press reports the mill’s energy costs have climbed to five times the regular amount.

With no immediate sign of energy costs to decrease, it may become increasingly difficult for many large manufacturers to continue operations. What is adding to the difficulties is that the finished product prices for many finished products is under pressure.