MONTREAL, Quebec, Canada 6/20/12 (PennWell) -- Canadian paper company Domtar is selling its hydropower assets on Chaudiere Island to Hydro Ottawa's renewable energy subsidiary, Energy Ottawa.

The US$43.8 million deal includes three hydroelectric generating stations that provide a combined output of 38 MW, plus Domtar's 38.3% share in a consortium that owns the Chaudiere Falls Dam.

Energy Ottawa now owns six of the seven generating stations at Chaudiere Falls, which has been in operation since 1891. Hydro-Quebec owns the remaining one, although the energy produced by that station is purchased by Energy Ottawa under a long-term power purchase agreement.

"It's a jewel of an investment," says Hydro Ottawa President Bryce Conrad. "It's in our backyard, it's got a secure revenue stream, it's generating a profit today."

The company says its units at Chaudiere Falls could eventually be expanded to 60 MW.