Loggers: State-subsidized biomass firm stopped paying in February

Posted March 21, 2017, at 2:21 p.m.
Last modified March 21, 2017, at 5:51 p.m.

PORTLAND, Maine — One company that has received thousands of dollars in state subsidies resulting from a 2016 biomass industry bailout designed to bolster Maine’s sagging forestry industry allegedly isn’t paying loggers.

Dana Doran, executive director of the Professional Logging Contractors of Maine, said some of his members have not been paid by Stored Solar since early February.

“For them not to be paid upward of four to six weeks, that’s 30 to 50 days beyond what they’re normally paid on,” Doran said. “That’s significant and for many of these family-based businesses, that can put them under. Many are wondering whether they can continue to make payroll.”

Doran declined to identify individual logging contractors that Stored Solar owes, but said many are stopping deliveries to Stored Solar’s West Enfield and Jonesboro plants.

ReEnergy, the other biomass generator getting part of a $13.4 million state subsidy, is paying as expected, he said.

William Harrington, a partner in Stored Solar who signed the company’s subsidized power contract, declined to comment Tuesday by telephone. He said “Nick” was the person to speak with, but did not provide a last name or contact information.

Stored Solar has received $426,000 in subsidies for electricity generated in January and February, according to regulatory filings.

[ Maine’s $13M bailout of biomass plants will mean jobs, but at a cost of $23,700 each]

Doran said he’s not sure how much is owed to loggers but that the amount is “significant.”

To get the subsidies, the two companies together promised to employ 87 people and buy 1.1 million tons of Maine wood waste each year.

To make sure they meet those goals, they have to put up a security deposit of cash or credit. The security deposit allows regulators to recover monthly subsidies at the end of the year if the economic promises go unfulfilled.

Gov. Paul LePage this month asked regulators for changes to those rules that he wrote “could provide them more financial flexibility and make their long-term success more likely.” He wrote the changes should provide the “same level of assurance regarding in-state benefits.”

LePage’s request would have regulators verify delivery on the economic promises more often than once a year. In effect, that could lower the deposit required to secure the full subsidy payment.

Angela Monroe, acting director of the Governor’s Energy Office, wrote in an email that the administration “cannot comment” on the financial situations of individual businesses. Monroe wrote that the governor’s office wanted the PUC to explore the rule change to continue to protect taxpayer dollars but also “to make it easier for the plant owners to make investments in the state and to make their long-term success more likely.”

She or the governor’s office did not comment on whether Stored Solar’s financial troubles or payments to loggers prompted LePage’s letter. It’s dated a little more than a month after the company fell behind on its bills.

Stored Solar’s leaders have also proposed a larger $240 million region-wide biomass plan. Its centerpiece would be a refinery making fuel from wood waste at the former Great Northern Paper Co. site in East Millinocket.

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According to a letter ReEnergy filed Tuesday, LePage wasn’t writing to regulators on their behalf. The company said it first learned of LePage’s letter Monday.

“ReEnergy was fully aware of this credit support requirement when it submitted its proposal, and we want to confirm that we are prepared to fulfill our obligations with respect to the existing credit support requirements in our contract with Emera Maine,” William H. Ralston, ReEnergy’s chief risk officer, wrote.

But if the rules do change, ReEnergy said it wants the changes to apply to its business, too.

Harry Lanphear, a spokesman for the Maine Public Utilities Commission, said Monday the commission is considering the governor’s request.

 

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