Millinocket councilors study example of Madison utility

Posted Feb. 15, 2009, at 8:06 p.m.
Last modified Feb. 13, 2011, at 11:06 a.m.

MILLINOCKET, Maine — When Backyard Farms LLC was looking in 2006 to start growing its indoor tomatoes, its owners chose to settle in Madison, a Somerset County town of 4,500 on the Kennebec River near Skowhegan.

The town’s major attraction was its public utility, Madison Electric Works, which sold electricity at 9 cents a kilowatt-hour, the lowest rate in New England, utility officials said Friday.

Today the utility offers 13 cents a kilowatt-hour, still one of Maine’s lowest rates, and Backyard Farms employs 130 full-time workers at its 27-acre greenhouse, the largest building in New England. Backyard is building a second, 19-acre greenhouse for spring that will put about 175 workers on the company’s payroll.

Madison Electric considers itself part of the company’s success, said Calvin Ames, the utility’s general manager. With its 15-lot industrial park, the utility helps the town promote itself as a good place to do business.

“The biggest thing is that we are nonprofit. We don’t have to make any money,” Ames said Friday. “Our biggest concern is our ratepayers. We go out of our way to have the cheapest electricity in Maine, and the town uses that as a major selling point.”

Following up on an idea suggested by Councilor Scott Gonya in November, Millinocket Town Council members will head for Madison on Thursday to learn how to possibly form a public electric utility in Millinocket to serve the town or the Katahdin region.

“If we could do this, it would have a great impact on our citizens and it will be a great enticement for business,” Councilor Michael Madore said Friday. “It only makes sense to go down and visit them and learn from them to create a blueprint for success up here. If we can get some ideas, some expediency through this, we can do it in a very timely fashion.”

Gonya suggested using a $75,000 regional economic development payment, issued by and per an agreement with Brookfield Renewable Resources in the event of a mill shutdown, to help fund the public utility startup or research.

Lincoln officials have also discussed forming a public utility.

Madison has some resemblance to Millinocket. It has about 4,500 residents, sits on the Kennebec River and has a paper mill. As of 2007, Madison Paper Industries was listed as employing 260 people making catalog papers and paper for The New York Times Magazine.

Millinocket has about 5,000 residents and a paper mill, which, though temporarily shut down since September, employs about 150 people. It has an industrial park, a great deal of open space in and around it, electricity-generating dams on the Penobscot that might be used for wholesale power production and several wind farms proposed or running nearby that could contribute electricity.

But a public utility might be a massive undertaking for a town, and its benefits aren’t that easy to acquire, said Joy Hikel, Madison’s economic development director.

Created in 1888 to power streetlights, Madison Electric doesn’t generate electricity and didn’t have to answer to the Public Utilities Commission and its plethora of regulations at its creation. It buys power from wholesalers and transmits it to customers over utility wires it built and maintains, as Millinocket would likely do, Madore said.

“Knowing the economic situation in Millinocket, they are looking at everything. I don’t blame them,” Hikel said of the councilors’ visit. “I think it’s a great effort. But how would they make it affordable if they have to lease the lines from another power company?”

Despite its lower electricity rates, Madison’s industrial park has had only one tenant in 10 years, a veterinarian’s office, she said.

“I don’t know how much they could really mimic Madison,” Hikel said. “I think if I were sitting in Millinocket, I would go with recreation as something to develop.”

nsambides@bangordailynews.net

794-8215

BANGOR DAILY NEWS FILE PHOTO

An employee picks tomatoes at Backyard Farms in Madison in 2007. The company’s 23-acre greenhouse was completed last year and the first harvest was in January 2007. The 27-acre facility employs 130 full-time.

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