A method of generating heat in a boiler such as by combusting a fuel material which includes a plurality of densified fuel pellets is provided. The densified fuel pellets may be formed by a process which includes compacting a mixture which includes about 5 to 15 wt. % molten thermoplastic polymeric material and at least about 75 wt. % cellulosic material. Many embodiments of the method are suitable for use in a coal-fired furnace and/or in other industrial boiler applications.