Shuttered Greenville biomass plant could restart, rehire 20 employees in January

Posted Dec. 04, 2012, at 5:51 p.m.

GREENVILLE, Maine — A company from Connecticut plans to purchase and restart the Greenville Steam biomass plant, rehiring approximately 20 employees who were laid off when the plant shut down in April 2011.

New Leaf Energy has signed a letter of intent to purchase the plant from its current owner, Gallup Power Greenville, according to Daniel Haas, New Leaf’s CEO. Details of the transaction are not being disclosed, Haas said.

“We intend to acquire [the facility] and return it to full operation as soon as possible,” Haas told the Bangor Daily News.

Right now, assuming the deal is closed successfully, the restart date is scheduled for January, Haas said.

Gary Lamb, Greenville’s town manager, welcomed the news that the facility could reopen. He said it was one of the town’s 10 largest employers when it closed. In addition to the loss of 20 or so good-paying jobs, the facility also generated approximately $74,000 in property and equipment taxes to the town, Lamb said.

The principals behind New Leaf — there are four including Haas — say they have the industry experience and hands-on knowledge of the facility to make it successful where past owners have failed.

One of Haas’ partners in the company, which was created in February, is Ted Hill, who oversaw the Greenville facility as the former vice president of operations at Gallup Power Greenville, which is a subsidiary of Dallas, Texas-based Tang Energy.

“I’m very familiar with the asset and the market conditions that were present then and prevalent now,” Hill said.

Hill, reached at his office in Florida, said several factors contributed to Gallup Power Greenville’s decision to shutter the plant. First, a federal program that subsidized fuel costs for biomass plants was postponed; power costs were depressed because of the abundance of natural gas, making biomass-generated energy less competitive; and the value of Renewable Energy Certificates, which renewable energy generators can sell as a commodity to supplement its income, had dropped to $12 per megawatt hour, Hill said.

“It was the business version of a perfect storm because it all happened within six months,” he said.

But the situation has changed, according to Hill. The values of RECs has increased to as much as $62, meaning the potential for an additional $5.6 million in revenue for the facility, he said. In addition, the plant could be qualified to sell RECs in Rhode Island, as well as Maine and Massachusetts.

“We looked at it again with a fresh eye, and because the RECs are healthy, power is reasonably priced and the opportunities beyond Massachusetts and Maine are tangibly there, we decided we’d go ahead and offer on it,” he said.

Besides his past experience with the Greenville facility, Hill was also chief operating officer for KTI Inc., which owned a wood processing plant in Lewiston, the Maine Energy Recovery Co., and the Penobscot Energy Recovery Co., before its merger with Casella Waste Systems in 1999.

The Greenville biomass plant, which can generate 120,000 megawatt hours per year, has gone through several owners over the past several years. Tang Energy purchased the facility from NextEra Energy in 2010. Prior to NextEra, the owner was New Energy Capital Corp., which invested $10 million in 2006 to retrofit the plant to improve its emissions and qualify it to sell RECs in Maine and Massachusetts, Hill said.

Another of New Leaf’s principals is Andrew Grant, an engineer who was involved in the 2006 retrofit, Hill said. “Between the two of us we know the plant and its politics nine ways from Sunday,” he said.

While the immediate plan is to restart the facility, Hill has other ideas that could increase its future viability. One such idea, which is “buried in the business plan,” he said, is to build a torrefied wood facility next to the biomass plant that would create torrefied wood pellets, which coal-fired plants can use in lieu of coal because the pellets burn as hot as coal without coal’s pollutant. Currently, Thermogen Industries LLC is building New England’s first torrefied wood facility in Millinocket.

A torrefied wood facility would improve the enterprise value of the asset, Hill said, but whether it ever gets built will depend on the markets.

“At the moment, it would appear a good market opportunity, especially in the EU, and Searsport would be the obvious target … because it is closer to the EU than most eastern seaboard ports,” Hill said. “Is it a plan we would embrace immediately? No, but it’s on the map, so to speak, for consideration.”

New Leaf is working with Wall Street firm IQ Venture Advisors to line up the funding required to acquire and restart the facility, according to Hill. He said two companies, one in the United States and an offshore company interested in launching a U.S. subsidiary, are interested in being the lead investor in the project.

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