Late Payments Force Cuts in Steam Supply

TransCanada Power Castleton LLC halted its shipments of steam to Fort Orange Paper, Castleon, N.Y., earlier this month due to the paper company failing to make payments on outstanding bills, according to a spokesman for TransCanada. The cut in providing steam has forced the paper company to halt production while the two companies look to remedy the situation.

According to Glenn Herchak, a spokesman for the power supplier, an indirectly owned division of the Canadian-based power supplier TransCanada, the New York based Fort Orange has failed to make payment on steam that was supplied to the operation since the middle of last summer. The total bill now owed is $400,000. Fort Orange had signed a contract with the power producer than runs until 2010.

While the power supplier has halted steam delivery to run the machinery, Herchak says that the company is continuing to send enough steam power to the paper company for Fort Orange’s space heating requirements. This should prevent the machinery at the mill from becoming damaged.

According to local press reports, late last week the company opted to shut down completely due to difficult markets and the high cost of operating the mill. 

Brett Harte, president of United Paperworkers International Union Local 1-420, said the company called its 65 union workers Wednesday, March 6, telling them to come in Thursday to collect their final checks, clean out their lockers, and return their uniforms.