PERC waives penalties for town waste shortfalls

Posted Feb. 05, 2010, at 9:43 p.m.

ORRINGTON, Maine — Bangor and 54 other Maine communities that didn’t send enough trash last year to meet guarantees outlined in their contracts with the Penobscot Energy Recovery Co. of Orrington have been given a reprieve from penalties.

Because of the poor economy, many Maine residents made fewer purchases and conserved as much as possible, which in the end meant less rubbish to take to PERC.

While eliminating some of the waste stream is good news for the environment, it wasn’t so good for 55 of the 186 communities whose waste deliveries fell below their contracted annual tonnage. Under their contracts, those communities could have faced penalties totaling up to $150,000.

Recognizing the hardships that the economy has brought to Maine people and their communities, the private owners of the PERC facility — John Noer and Kevin Nordby, both of Minneapolis, Minn. — agreed to waive the penalties, Greg Lounder, executive director of The Municipal Review Committee Inc., said in a prepared press release. The committee represents the 186 communities committed to deliver 192,872 tons per year of municipal waste to the Orrington facility.

Less trash means PERC has less recyclable products to sell and less waste to burn as fuel to generate electricity, which it also sells.

A private-public partnership, PERC is owned 77 percent by Noer and Nordby and 23 percent by the 86 original member towns and cities that became part of The Municipal Review Committee Inc. before 1998.

“PERC’s owners weighed two key factors in reaching their decision to waive the penalties,” Peter Prata, PERC’s plant manager, said in a prepared press release Friday. “The owners recognized the impacts of the economic downturn, which has brought hardship to individuals and entities, both public and private, across the state of Maine.” In addition, the private partners highly value the long-standing public-private partnership that has strengthened over time, he said.

No penalties have been imposed under the system since 1991 because the contracts allow the communities to pool their tonnage. As long as they deliver in excess of the guaranteed annual aggregate tonnage, the pooling provision helps those communities that might have had a shift in the community, such as a mill closing. As long as the member communities met the total guaranteed tonnage, no one was penalized.

In 2009, however, the combined deliveries fell short of the committed total amount by 2,857.

“The MRC is very pleased that PERC’s private partners opted to waive penalties for 2009,” Lounder said Friday. He said the waiver “provides another example of how our strong relationship with the PERC private partners keeps costs down across the region.

Bob Farrar, interim Bangor city manager, said Bangor was one of the contributors to the shortfall. “We were in the range of about 2,200 tons short, which is about what we had projected we would be roughly half to two-thirds of the way through the year, as we sort of saw the trend.” he said Friday.

Because of the pooling arrangements, Farrar said he was thankful for those municipalities that made up for Bangor’s shortfall. “We were very, very pleased with the partners decision to waive those penalties.” He said city officials never figured how much the penalties would have been for Bangor because of the complex formula used.

Based on last year’s tonnage, many communities, including Bangor, revised their tonnage in their contracts for 2010 early last fall by trading with other municipalities. Farrar said Bangor reduced its guaranteed annual tonnage for next year by about 2,000, hopeful that will be more reflective of what the city generates next year in waste.

Dover-Foxcroft Town Manager Jack Clukey said the regional facility his town operates managed to meet its contractual tonnage.

“I think it’s a good decision by the company to waive those penalties,” Clukey said Friday. “It’s always been my understanding that those [penalties] were an option and there might be some need for penalties under certain circumstances and I’m not sure that need was evident in this case.” He said it was certainly helpful to those towns that did not meet their contracted tonnage.

Noer and Nordby in a prepared statement said the value of strong, long-term partnerships is more important than ever in today’s world. “We are confident that the municipalities will continue to do all they can to direct municipal waste originating within their borders to the facility for disposal.”

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