Boiler operator missing from mill equation

By Nick Sambides Jr., BDN Staff
Posted March 18, 2009, at 10:34 p.m.

MILLINOCKET, Maine — Landowners are happy to supply the Katahdin Avenue paper mill with biomass and the state will accept its electricity, but it still needs a partner to install and run its proposed biomass boiler, mill owners say.

Daniel Whyte, a vice president at Brookfield Renewable Power, told town leaders during a 1½-hour meeting late Tuesday that efforts to revitalize the mill are progressing, but 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 40 megawatts 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 doable. If we didn’t, we wouldn’t have spent $350,000 a month over the winter keeping it [the mill] warm.

“We don’t do all this without believing in it,” Whyte added.

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.

Under Brookfield’s plan, the new boiler would reuse mill steam and burn biomass — tree bark and other wood waste — to generate steam and electricity for the mill and the New England power grid. Talks with several landowners have been very fruitful, and Brookfield plans to apply next month to the PUC to secure a contract allowing the mill to sell electricity to the grid, Whyte said.

However, the biomass conversion itself will take 10 to 12 months once a partner is found. Brookfield thought it had one last summer, but that party dropped out when it learned of the engineering work needed to install a biomass boiler at the mill.

Brookfield Asset subcontracted for and finished that work over the winter, but has no interest in installing or running a biomass boiler at the mill. Such work is outside the multibillion-dollar international conglomerate’s “core competencies,” company officials have said.

Whyte did not deny that it would be possible to restart the mill in late spring or summer, when warmer temperatures — and depressed-market oil prices — make mill operations less costly. Brookfield is not considering a spring or summer restart, Whyte said, but “that’s a decision for Fraser.”

Fraser Papers is a Brookfield-owned company that manages the mill for Brookfield. Jeff Dutton, Fraser’s chief operating officer, did not return a message seeking comment on Wednesday.

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

“I was hoping it would be a shorter process, but that’s the way that it is,” said Town Councilor Scott Gonya, a millworker idled when the mill closed.

Town officials heard no deal-breakers, just necessary steps in the restart process, Councilor Michael Madore said.

Gonya, Madore and Town Manager Eugene Conlogue expressed doubt that the mill site would be revitalized as a power-generation facility without the mill also restarting, but conceded the possibility.

“My feeling from day one was that the mill was going to reopen,” Conlogue said. “They [Brookfield] know what they are doing. We have to give them the latitude to bring all the elements together in the form of an action plan that includes an investor.”

Per their promise, Brookfield executives have met at least quarterly with town officials to apprise them of the mill restart process after town and state government officials complained that the September shutdown was handled abruptly.

Conlogue said he believed that with the biomass and electrical supply contracts nailed, a biomass partner would not be too difficult to find. Town, state and federal officials have promised to do all they can to revitalize the mill.

http://bangordailynews.com/2009/03/18/news/boiler-operator-missing-from-mill-equation/ printed on July 28, 2014