Casella scraps plan to build pipeline from Old Town landfill to UMaine over financing

The natural gas pipeline that had been proposed from the Juniper Ridge Landfill to the University of Maine
Casella Waste Systems | BDN
The natural gas pipeline that had been proposed from the Juniper Ridge Landfill to the University of Maine
Posted Feb. 07, 2014, at 5:29 a.m.

ORONO, Maine — A proposed seven-mile methane gas pipeline between Juniper Ridge landfill in Old Town and the University of Maine to provide cheap, renewable heat to the campus has been scrapped over financing, according to an official with the landfill’s parent company.

“One of the conditions of going forward with the pipeline project was that we obtain financing for it. We were not able to do that,” Don Meagher, manager of planning and development for Casella Waste Systems Inc., said Thursday.

He added later that, “for this particular project, we had entered into an agreement with the university. [With] that particular [financial agreement] structure we were not able to get financing.” The agreement called for the university to pay Casella a floor price for the gas of $3.50 per million metric British thermal units with a cap of $9 per million metric British thermal units.

The university and Casella reached the fuel deal in November 2011 after about three years of discussions. The pipeline was projected to cost between $11 million and $13.5 million to build. UMaine officials at the time the deal was reached expected to save $15 million over the life of the 20-year agreement — or $750,000 annually — and reduce the Orono campus’ carbon footprint by using the captured landfill gas.

“Both the university and Casella are reserving the right to continue discussions should the opportunity present itself,” UMaine spokeswoman Margaret Nagle said in an email Thursday afternoon.

The proposed 12-inch high-density polyethylene pipeline would have run from the approximately 70-acre landfill south to Route 43 and along the road to the intersection with College Avenue Extension, where it would have continued on to the University of Maine steam plant to run boilers and provide heat for the state’s flagship university.

Because the proposed pipeline crossed several right of ways, Casella filed an application last year with the Maine Public Utilities Commission to become a utility, under its subsidiary EcoGas. The project was opposed by Bangor Gas Co. LLC, who claimed the pipeline would hurt its business.

After Bangor Gas filed a lawsuit in April 2013, Casella and the utility attempted to negotiate terms both companies could live with, which included one plan with Bangor Gas building and operating the pipeline. The Public Utilities Commission granted a fifth extension in August to give the companies more time to talk.

“We hadn’t really gotten to the end of that process,” Meagher said of the negotiations. “The last [PUC] extension took us through the end of 2013. When we, Casella, got to the point that we concluded we were not going to be able to finance the project, we then withdrew our application with the PUC because it was no longer needed.”

The landfill is burning off the equivalent of about 8,000 gallons of heating oil on a daily basis, Jeremy Labbe, engineer and environmental compliance manager for Casella, told those who attended a September open house at the landfill.

“It’s a waste,” he said.

Meagher said the company is not giving up on finding a buyer for the methane created at the state-owned landfill.

“We are certainly looking at other alternatives for using the landfill gas. It’s a renewable energy resource,” Meagher said. “We very much want to find a use for it.”

 

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