A Lincoln contractor has sued the operator of two troubled wood-to-energy plants that lawmakers hoped to prop up with part of a $13.4 million state subsidy.
Fastco Corp. on Aug. 11 filed a complaint against Stored Solar LLC in Maine District Court in Lincoln, seeking about $34,000 in return for unpaid work on a job it stopped in mid-April at Stored Solar’s West Enfield plant. Notice of the complaint was filed Monday with the Penobscot County Registry of Deeds.
The claims add to complaints from wood suppliers, who also said they’ve not been paid for months. The Town of Jonesboro, where the company has a second plant, is also seeking back payments for property taxes.
Wendy Schoppe, Jonesboro’s tax collector, said the town is still owed between $80,000 and $90,000 for the plant’s 2016 tax bill, which it still has listed under the previous owner, Covanta. A town official in West Enfield said taxes are current for the plant there.
The extent of back bills with suppliers has apparently caused most loggers to avoid dealing with the company, according to Dana Doran, head of the Professional Logging Contractors of Maine.
“I believe that all contractors have shut them off except for one,” Doran said. “You always pay your suppliers first.”
He did not disclose the supplier or identities of the other members of his group who are owed money by Stored Solar, but he estimated their total back bills at around $500,000.
That’s roughly twice what the company disclosed to regulators in a filing on July 28. The company said at that time that it had not settled payments for about 11,500 tons of deliveries during the first half of the year.
It’s not clear what the company paid for each shipment, but Doran said he’d estimate an average rate of $25 per ton for a “back-of-the-envelope” calculation. At that rate, that’s about $287,500 the company disclosed for overdue bills.
Doran also said that Stored Solar’s business practices “are very inconsistent with the rest of the industry,” referring to its practice of delivering checks to suppliers in person.
George Moon, a Hancock-based logger, told the Bangor Daily News on Monday that he typically received his checks by hand and was not provided detailed accounting of his deliveries, despite multiple requests for those settlement sheets.
Moon said he’s owed about $50,000 for deliveries dating back as far as 150 days, for which his attorney sent the company a demand letter Aug. 8 seeking payment.
Stored Solar’s also fallen behind on power generation and its promised economic benefits under the state subsidy arrangement, according to regulatory filings.
Fastco’s lawsuit seeking a lien on Stored Solar’s West Enfield property is the first recorded in deed records with either Penobscot or Washington counties, where both Stored Solar facilities are located.
Earlier this year, Stored Solar reduced the amount of Jonesboro property held by the subsidiary it uses to operate both facilities, transferring 72.4 acres next to the Jonesboro plant to Capergy Real Estate LLC, according to property records.
Capergy Real Estate was incorporated in Delaware in October 2016, around the time Stored Solar bought out Covanta’s Maine plants, according to records in Delaware.
Capergy refers to the joint venture owned by Stored Solar Vice President William Harrington and business partner Fahim Samaha. Together, they own Capergy US, whose subsidiaries lead various businesses that seek to turn Maine’s forests into marketable energy.
That includes a massive $240 million plan for a biorefinery in East Millinocket, where the company said a lawsuit stalled its financing plan.
The company made its first U.S. investment in a biomass plant in New Hampshire, through the Portsmouth-based investment firm Cate Street Capital. Cate Street led the failed restart of the Great Northern Paper Co. in East Millinocket, ending in bankruptcy. The bankruptcy trustee overseeing the case attributed the depth of that bankruptcy, in part, to mismanagement.
Harrington declined to comment on the overdue bills and allegations when reached by telephone Monday. He directed a reporter to speak with “Dan,” but did not provide a last name or contact information. He previously directed a reporter to speak with a “Nick.”
Kevin Crossman, whom Moon identified as the manager for the West Enfield and Jonesboro plants, left Stored Solar earlier this month, according to his LinkedIn profile.
The subsidy arrangement with the state could deliver Stored Solar millions in taxpayer dollars, a deal approved by lawmakers and signed into law by Gov. Paul LePage at the end of the 2016 legislative session. LePage has also taken steps to help Stored Solar, asking regulators to make changes to the timing of its subsidy payments on the company’s behalf and hosting a reception for a related effort in Washington, D.C., during a biomass conference.
Stored Solar has generated enough power to collect about $1 million in state subsidies but has missed out on about $1.3 million in subsidies intended to make their way to employees of the facilities and, primarily, back into the woods to support loggers hit hard by the decline of Maine’s paper industry.
That’s because the subsidy depends on how much power the company generates and also how it stacks up against employment and wood-purchasing promises, both areas where it’s fallen short.
Doran said it’s a silver lining that the subsidy depends in part on the company’s payroll and the amount of wood it’s purchased from Maine suppliers.
“The taxpayer is being protected because [Stored Solar] has to provide proof that they paid contractors before they receive any public funds going forward,” Doran said.
The company will have to make its case to the Maine Public Utilities Commission at the end of the year. Those regulators will decide whether the company lived up to its economic impact promises and, if not, will cut back the tax dollars Stored Solar receives.