No quick restart seen for Millinocket paper mill

By Nick Sambides Jr., BDN Staff
Posted March 18, 2009, at 1:22 p.m.

MILLINOCKET — Landowners are happy to supply it with biomass and the state will accept its electricity, but the Katahdin Avenue paper mill’s lack of a partner to run its proposed biomass boiler may be the biggest impediment to its reopening in 2010, mill owners say.

Daniel Whyte, a vice president of government and stakeholder relations for Brookfield Renewable Power, told town leaders during a 11/2-hour meeting late Tuesday that efforts to revitalize the mill are progressing, but that he had no “silver bullets” that promised a mill restart this year.

Brookfield must secure 15- to 20-year contracts with the Maine Public Utilities Commission for the electricity generated by the mill and the company’s hydropower dams and with several large landowners before an investor will come forward, Whyte said.

“Without those two steps, it will be nearly impossible to get an investor to buy in [to the mill] and get this running on a merchant basis,” Whyte said. “We believe that it’s do-able. If we didn’t, we wouldn’t have spent $350,000 a month over the winter keeping it [the mill] warm.”

Talks with several landowners have been very fruitful and Brookfield plans to apply next month to PUC to secure a contract that would allow the mill to sell electricity to the New England power grid at a favorable rate, Whyte said. However, the biomass conversion will take 10 to 12 months.

Though not at all happy at the prospect of at least another year before a mill restart, Town Council members said they believed that Brookfield and its parent company, Brookfield Asset Management, were making a good-faith effort to restart the mill.

The town’s biggest employer, the mill shut down in September, idling most of its 207 workers, because of its profit-killing use of oil, which the mill burns to create steam needed for papermaking. The mill burned more than 200,000 barrels of oil in 2007. It and its Katahdin Paper Co. LLC mill in East Millinocket are the Katahdin region’s largest employers, with more than 350 workers.

“It appears that they have been diligent in working on their process,” said Town Councilor Scott Gonya, a mill worker idled when the mill closed. “I was hoping it would be a shorter process, but that’s the way that it is.”

Whyte did not deny a possible mill restart in late spring or summer, when warmer temperatures – and depressed-market oil prices – make mill operations less costly, saying only, “that’s a decision for Fraser.”

Fraser Papers is a Brookfield-owned company that manages the mill for Brookfield.

http://bangordailynews.com/2009/03/18/business/no-quick-restart-seen-for-millinocket-paper-mill/ printed on April 24, 2014