Loggers disagree with LePage over biomass contract changes

Posted April 07, 2017, at 6:20 a.m.
Last modified June 02, 2017, at 3:25 p.m.

PORTLAND, Maine — Maine’s logging industry association has come out against changing a biomass subsidy program, opposing the request of one company and Gov. Paul LePage.

Dana Doran, executive director of the Professional Logging Contractors of Maine, wrote that any changes to the terms of a $13.4 million taxpayer-funded biomass subsidy “would seriously undermine the intent and the integrity of the process that produced it.”

“It’s like changing the rules of the game after the game has already started,” Doran wrote.

Doran’s letter, dated Wednesday and made public Thursday, came in response to biomass generator Stored Solar’s request to change its contract with Central Maine Power Co.

The request followed allegations from loggers in Doran’s organization that Stored Solar didn’t pay them for more than a month. Stored Solar told regulators last week that it had settled with suppliers. The loggers association did not confirm that.

[ Biomass company says it paid aggrieved loggers, wants to rework subsidy]

Under the subsidy agreement, Stored Solar gets $13.40 in state aid for every megawatt-hour it generates, on top of the market price. To get that subsidy, the company had to put up an initial security deposit of about $1.2 million.

The deposit assures regulators they can claw back the subsidy or part of it if the company falls short of its economic promises by year’s end. That includes employing 42 people and buying 500,000 tons of Maine wood annually, and this year making $2.5 million in capital investments this year at its West Enfield and Jonesboro facilities.

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

The company has asked if it can just hand back the subsidies it’s received so far, get its deposit back and instead collect any subsidy payment at the end of the year.

That’s different than LePage’s earlier request for changes. The governor asked regulators to consider reviewing economic promises more often under the subsidy. That could lower the amount of the security deposit required, LePage wrote, and could free up cash for the business.

The other subsidy recipient, ReEnergy, told regulators the governor’s request was not on their behalf.

At the time of LePage’s request, Stored Solar was dealing with what it called an “invoicing dispute” with suppliers of its Jonesboro facility, which caused the plant to operate at less than half capacity.

According to regulatory figures released Thursday, the Jonesboro plant was idle from March 23 through the end of the month. It also was idle multiple days at the beginning of the month.

The plant averaged about one-fourth of its potential output for the month, averaging less than in January and February.

Through the first three months of the subsidy, Stored Solar amassed $602,000 from the state subsidy fund. ReEnergy collected more than $359,000 in March, the first month it operated its Ashland and Fort Fairfield plants under the subsidy arrangement.

 

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