Bill aiming to restart East Millinocket mill passes committee

Posted March 25, 2014, at 8:41 p.m.
Rep. Steve Stanley
Linda Coan O'Kresik
Rep. Steve Stanley

AUGUSTA, Maine — A legislative committee unanimously approved a pending bill Tuesday that would allow negotiations aimed at restoring 212 jobs at an East Millinocket paper mill by May 1, officials said.

The Legislature’s Joint Standing Committee on Energy, Utilities and Technology voted 11-0 to pass LD 1792, An Act To Protect Jobs in the Forest Product Industry, said Rep. Barry Hobbins, D-Saco, co-chairman of the committee. Sen. Troy Jackson, D-Aroostook, and Rep. Aaron Libby, R-Waterboro, were absent, Hobbins said.

Gov. Paul LePage could sign the bill into law within two or three days, said the bill’s co-sponsor, Rep. Steve Stanley, D-Medway. The committee’s vote increases pressure on hydro dam owner Brookfield Asset Management to fulfill the bill’s intent and negotiate a profit-sharing agreement with mill owner Cate Street Capital to help restore the laid-off workers, Hobbins said.

“It goes to the floor with unanimous bipartisan support and with the support of the governor. It sends a signal,” Hobbins said Tuesday. “This is a permissive bill. All the arguments that Brookfield made against the bill, everything that would stall or delay getting the mill back in operation and making paper, is gone.”

LePage announced the profit-sharing agreement proposal on Feb. 12. It is among several goals that Cate Street subsidiary Great Northern Paper Co. LLC officials say they must achieve to restart the mill. Great Northern Paper stopped production on Jan. 23 and laid off 212 of 256 millworkers on Feb. 6, devastating an already limp Katahdin region economy.

The bill would lift a state law enacted in 2002 that limits conditions under which Brookfield can sell electricity to the wholesale market. Under the present law, Brookfield must sell all of the electricity generated by its three Penobscot River dams to the mill while it is operating, but it can sell electricity wholesale when the mill is in temporary or partial shutdown, officials have said.

The new law would allow Brookfield to sell electricity to the market at all times so long as it shared profit with Cate Street and “as long as there is no reduction in labor force associated with the cessation or reduction of paper production,” the bill states.

Due to the 2002 law, which was aimed at preventing the mill’s owner from closing East Millinocket’s mill and solely producing electricity, GNP was the only mill in Maine that couldn’t sell electricity through what’s called “load-shedding.”

Brookfield has been negotiating a sharing agreement with Cate Street but opposes the bill. Brookfield attorney Harold Pachios said the bill’s enactment would violate a 10-year power supply contract that Cate Street signed on Aug. 30, 2011, guaranteeing the mill very low power rates, originally set in 2001, during high-cost times such as winter.

He called an earlier version of the bill unconstitutional because it would have forced the revenue-sharing agreement, but the committee rewrote the bill to permit the agreement, not mandate it.

Pachios did not immediately respond to an email seeking comment. Cate Street spokesman Scott Tranchemontagne said the company is “pleased with the committee’s diligence and desire to pass a compromise that will allow this important bill to move forward.”

“A vote to allow GNP to benefit from load shedding, which other Maine mills currently do, is a vote for preserving jobs, creating a level playing field for GNP, and supporting the Katahdin region’s economy,” Tranchemontagne said.

Brookfield has declined to say exactly how much money it made selling electricity since Jan. 23, but Cate Street officials have estimated that Brookfield has made $4 million to $5 million per month since then.

If Brookfield doesn’t make the deal, the Legislature would have no power to force it, Hobbins said, but legislators and residents won’t “be too happy.”

“They will look at Brookfield in a different light,” Hobbins said. “Cate Street has been quiet and they [Brookfield] have been very aggressive in their public statements. I think there will be a shift in public opinion regarding Brookfield outside the Millinocket area.”

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