Mar. 30--FITCHBURG -- A Fitchburg paper factory hopes to work with an energy company to construct a biomass power plant at its River Street factory, engineering and facilities director for the company Thomas Shannon said last week.

The project is the second biomass power plant proposed in Fitchburg, with Simmonds International, a saw and steel manufacturing company on Intervale Road, also planning on installing a biomass plant.

"This project will help keep this mill competitive," Shannon said.

He said Munksjo spends about $6 million per year on electricity and fuel to produce steam for its paper-manufacturing processes.

"It's a huge chunk of our operating costs," he said.

He said making power on-site through a renewable resource will "significantly reduce" the company's energy costs.

Shannon said Munksjo officials had thought about the idea of installing an on-site power-production plant for years, but he said discussions became much more serious when oil rose to record highs last summer.

"We're just such a huge consumer of electricity," he said.

A biomass power plant uses wood chips and other biological components to burn and produce steam and electricity.

"It's not that much unlike a wood stove," he said.

CCI-Energy, the third-party investor that Munksjo has been working with, is running engineering studies about how big of a plant to build, Shannon said.

James Sweeney, president and owner of the Plymouth-based

CCI-Energy, said the project could be up to a $25 million investment in the city and could create 25 to 30 new jobs, plus additional jobs while the plant is being constructed.

"We're definitely working on the project," Sweeney said. "Right now, we're working on the permitting for the site."

Shannon said the new plant would likely produce about six megawatts of electricity, but the exact size of the plant has not yet been finalized.

Shannon said Munksjo uses about three and a half megawatts of electricity, mainly in the steam process of drying the paper.

Shannon said excess power could be sold back to the grid at a profit for CCI-Energy.

Shannon said the viability of the project will help the company stay in operation in Fitchburg

"In these tough economic times, our mill is affected as much, if not more than, everyone else," Shannon said. "(This project) really comes down to the mill being viable in the long term."

He said the time frame on the project would likely be within a few years.