What are the factors that influence the price of wood pellet fuel?
Diesel fuel, wood, packaging and electricity are the major costs in the manufacturing of pellets. Initially, during the 2008-09 season with the rapid spiking of the oil price, diesel costs soared as did the other related products. Subsequently wood prices have jumped dramatically, and consequently, we have had to accept these higher costs as having wood, the raw material for pellet making, is paramount. Electricity is a major cost and we have been working with Zilkha Biomass which has built a cogeneration facility adjacent to our Jaffrey plant. This facility once functioning will greatly assist our operations by keeping our electrical costs lower. In the long run this will help stabilize a major cost inherent in the pellet price. Also, we should note that we (NEWP) have very little control over retail prices. Our wholesale prices have increased only 13% since the beginning of the heating season when our 08-09 prices were originally announced. Is the supply of pellet fuel balancing out
