[NEWS] Maine Biomass Facility Closures Likely, Despite Proposed Bailout

– by Tux Turkel, April 13, 2016, Portland Press Herald


Photo: Press Herald / Whitney Hayward

No more than three of Maine’s six biomass energy plants are likely to keep operating in the near term, even if a bill to help subsidize the struggling plants and save hundreds of logging jobs is approved by the Legislature and signed by Gov. Paul LePage.

Two of the plants — in West Enfield and Jonesboro — already have shut down. James Regan, a spokesman for their owner, Covanta Holding Corp., said Monday that details in the proposed law “make it unlikely” they will resume operations.

“We believe that the draft law will primarily benefit larger facilities,” he said.

The future of one or two of the four biomass plants owned by ReEnergy Holdings also is at risk, according to Sarah Boggess, a company spokeswoman.

“We have made it clear that one or both of our plants in Aroostook County is at risk of closure, without a power purchase agreement,” she said.

ReEnergy’s Aroostook plants are in Ashland and Fort Fairfield. It also operates plants in Stratton and Livermore Falls.

ReEnergy also has been exploring a $100 million project in Aroostook County with J.D. Irving, the state’s largest landowner. The New Brunswick-based company has a new $35 million sawmill in Ashland, which sends waste wood to the ReEnergy plant.

In a statement sent to the Portland Press Herald on Tuesday, Irving spokeswoman Mary Keith said the company is in the very early stages of investigating whether waste heat and steam from the biomass plant could be used to dry fiber in a new facility. That facility would likely be a pellet mill, she indicated, but not for the residential, retail market. And although she didn’t specify an end user, her description was in line with North American mills that export pellets to Europe, where they are pulverized and used in coal-fired power plants to reduce carbon emissions.

“If this project were viable,” she said, “it would be targeted at users who are looking to replace coal with a lower greenhouse gas feedstock for a co-fired facility.”

Lawmakers are under pressure to help the biomass industry. The six power plants, which are free-standing and not associated with a paper mill or other manufacturing facility, have been hurt by factors including low wholesale prices for natural gas, which generates half of New England’s electricity. Supplying the plants has become critical for many logging and trucking companies, which have lost markets as paper mills have closed.

After a plan to make electricity customers subsidize above-market power costs at the plants failed, a bill was drawn up that would use $13.4 million from the state’s rainy day fund. The goal is to throw a lifeline to the plants — and the loggers who depend on them — for a couple of years, while a study group comes up with a long-term plan for a viable biomass power industry in Maine.

A bill to form the study group was approved Tuesday in the House and now goes to the Senate. The study group would report back to lawmakers in December.

A vote on the subsidy proposal is expected in the next few days. But as lawmakers prepare to take up the measure, it already may be too late for some plants and their suppliers.

That’s because it’s not just the number of operating plants that matters — it’s their locations.

The Covanta plants, in coastal Washington County and Penobscot County, provided outlets for loggers that have lost markets in Lincoln, Old Town and Bucksport, where paper mills recently have closed. The Covanta plants directly employed 44 people and were served by 200 loggers and truckers, according to Dana Doran, executive director of the Professional Logging Contractors of Maine.

READ MORE at the Portland Press Herald

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