Kestrel Aircraft looking at New Hampshire because of energy costs

Posted Oct. 20, 2011, at 5:53 p.m.
Last modified Oct. 20, 2011, at 6:51 p.m.

BRUNSWICK, Maine — The state’s high energy costs may again have proven to be a factor in pushing jobs that could have come to Maine elsewhere.

Kestrel Aircraft Co., which is trying to begin production on a new six- to eight-passenger turboprop aircraft, announced this week that its longstanding plans to create up to 600 jobs at Brunswick Landing, which is the former Brunswick Naval Air Station, could be scaled back and that some of those jobs could go to Berlin, N.H., or some other state.

Though the major reason for the change in plans has to do with trouble Kestrel is having securing millions of dollars worth of federal loan guarantees, company President Alan Klapmeier has said that a $275 million biomass plant being built in Berlin is another factor. Because Kestrel’s aircraft design is based on a composite shell, intense heat is needed to bake and cure components, some of which measure up to 45 feet long. Klapmeier has said that he can do that cheaper in Berlin than in Brunswick.

Klapmeier was unavailable Thursday afternoon but a spokeswoman for his company, Kate Dougherty, reaffirmed his comments about energy costs.

“You can imagine what the energy costs would be for a kiln to cure half a fuselage or a 45-foot wing spar,” said Dougherty. “If the biomass plant would help us with our energy prices, anywhere where we can be efficient is very important, especially as a start-up company.”

Steve Levesque, executive director of the Midcoast Regional Redevelopment Authority, said Thursday evening that Kestrel long has said it may build components elsewhere to be used in Brunswick so the company’s interest in Berlin is not unexpected.

In addition, state officials are working on alternative sources of financing after problems arose with the company’s efforts to secure New Market Tax Credits, said George Gervais, commissioner of the Department of Economic and Community Development.

Berlin City Manager Patrick MacQueen said Thursday that Portsmouth-based Cate Street Capital has been working with the city and state of New Hampshire for nearly two years on its application to build what will be called the Burgess Biopower Facility at the former 62-acre site of a Fraser Paper pulp mill in Berlin. That mill closed in 2006 and since then has been mostly scrapped, said MacQueen. Cate Street, which in an unrelated project recently purchased paper mills in Millinocket and East Millinocket, broke ground on the Berlin biomass project earlier this month. Construction is expected to take two years or more.

Scott Tranchemontagne, a spokesman for Cate Street, said his company has been in preliminary talks with Kestrel about selling energy from the biomass plant to the aircraft manufacturer but that so far no deals have been struck.

“We’re talking to everyone and anyone who has an interest in co-locating on that site,” he said. “One benefit of co-locating with us would be the availability of low-cost energy.”

As for the news about Kestrel building components in Berlin, MacQueen said he and other city officials learned of the possibility just days ago through the media.

“We have not had any conversations with them,” said MacQueen of Kestrel.

Kenneth Fletcher, director of Gov. Paul LePage’s Office of Energy Independence and Security, said Thursday afternoon that he had not heard many details about Kestrel’s change in plans but that he intended to reach out to the company to discuss energy options in Maine.

“I am not aware that they’ve contacted anyone at the state level about what their options are,” said Fletcher. “Maine’s energy prices are high, but lower than New Hampshire’s.”

Fletcher said one factor working in Kestrel’s favor is its location at the former Navy base, which is one of the relatively few areas of Maine that is served by natural gas. Fletcher said his office also can offer technical assistance on ways for companies to be more energy-efficient through conservation and electricity-purchasing programs that take advantage of sudden changes in the price of energy. He also said Kestrel may qualify for a number of loan and grant programs, some of which are administered by Efficiency Maine.

As for biomass in Brunswick, Fletcher said geography works against that option.

“In the northern part of the state, using biomass is effective because that’s where the wood is,” he said. “In more urban areas, it may not be as cost-effective as natural gas.”

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