October 22, 2018
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Biomass bailout to restart former Covanta plants, boost Aroostook generators

Gabor Degre | BDN
Gabor Degre | BDN
Covanta Energy's West Enfield facility.
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PORTLAND, Maine — Maine regulators on Tuesday approved splitting $13.4 million in subsidies across four biomass facilities, including two shuttered by Covanta in Penobscot and Washington counties.

The Maine Public Utilities Commission voted unanimously to accept bids from Stored Solar, a subsidiary of the French energy firm Capergy that bought the Covanta plants, and ReEnergy Holdings.

Stored Solar on Nov. 17 notified federal regulators that it closed the purchase of the former Covanta plants on Oct. 18, in an application seeking to restart operations and sell into the regional wholesale market as early as this month. Regulators have not issued a decision on that request.

Covanta closed the plants, which employed about 44 people, in March and April.

A bailout bill passed into law in April directed the PUC to offer biomass generators a deal. Those that could show economic benefits and an inability to compete at market rates could vie for two-year contracts for their electricity, at prices more generous than on the open market.

Harry Lanphear, spokesman for the PUC, said Stored Solar’s bid came in after it secured a purchase and sale agreement for Covanta’s plants, but in time to meet the bidding deadline of July 29.

The company apparently has larger plans, delivering a presentation in September to the Forest Resources Association of Maine about a plan that “calls for the repurposing of existing sites as energy parks, aquaculture, greenhouses and biofuel manufacturing facilities,” according to an event listing posted by the Small Woodland Owners Association of Maine.

The Forest Resources Association reported in its December newsletter that Stored Solar had begun buying wood fuel at both plants and company officials said they plan to restart by the end of the month.

“In addition to the existing biomass energy plants, Stored Solar LLC is seeking heat and steam users to co-locate at the facilities and is pursuing funding for a biorefinery,” the newsletter reported.

A Stored Solar representative did not immediately respond to a request for comment Tuesday.

The industry has been hit hard in recent years, facing pressure in the wholesale market from low oil prices and the loss of some markets in southern New England, as states tightened renewable energy requirements.

Loggers turned out in force to support the subsidy bill, driven in part by a dwindling market for their harvests, after the rapid contraction of the pulp and paper industry over the past few years.

With Covanta’s plants shuttered, it appeared earlier this year that ReEnergy would be the only bidder, an important detail as the law required the process to be “competitive.” Regulators said Tuesday that they received multiple bids, including from undisclosed out-of-state generators.

Regulators indicated Tuesday that both companies would evenly split the $13.4 million subsidy, transferred to the PUC from the state’s general fund. They specified that the contracts — for up to 80 megawatts of electricity generation — would span only two calendar years, regardless of any shutdowns that may occur.

The law required that 50 percent or less of the subsidy went to biomass generators operating on the northern Maine grid, which ReEnergy’s facilities serve through its Ashland and Fort Fairfield plants. Regulators said the mix of bids selected evenly distributes some of the economic benefits of the subsidy.

The law also requires regulators to track those benefits and allows them to reduce the subsidy if certain economic impact goals aren’t met.

Detailed pricing of the bids and other information was not disclosed during deliberations Tuesday.


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