In this paper, we examine the utilization of mathematical programming tools for optimum energy management of the power plant in pulp and paper mills. The-objective is the fulfillment of the total plant requirements in energy and steam with the minimum possible cost. The proposed methodology is based on the development of a detailed model of the power plant using mass and energy balances and a mathematical formulation of the electrical purchase contract, which can be translated into a rigorous mixed integer linear programming optimization problem. The results show that the method can be a very useful tool for the reduction of production cost due to minimization of the fuel and electricity costs.