WEST ENFIELD, Maine — Two biomass energy plants in Maine owned by Morristown, New Jersey-based Covanta Holding Corp. are closing in March because of low energy prices, company spokesman James F. Regan said in a statement released Thursday.
“At the end of March, Covanta is planning to take the operations of our Jonesboro and West Enfield, Maine, biomass facilities offline,” Regan said. “Unfortunately, this happens with some frequency in the biomass industry, when energy prices are not sufficient to cover the costs of operation and fuel supply. We have experienced similar situations in the past and resumed operations when the economics improved. We will continue to evaluate the future of the facilities.”
West Enfield Power Station and the Jonesboro plant began commercial operation in November 1987 and were acquired by Covanta in 2008. Both facilities take wood waste from forest operations, thinnings and sawmills and burn it in specially designed boilers to generate electricity, according to covanta.com. The electricity is sold to ISO New England, the region’s bulk power system.
The closings will have no impact on Covanta’s plans to invest with Fiberight, a Maryland-based company working with the Municipal Review Committee, to create a solid waste recycling and biofuels processing facility in Hampden, Regan said.
Covanta Energy Corp. plant manager Bryan Osgood in West Enfield said 24 employees at his plant and 20 at the Covanta Jonesboro Power Station were told the news of the closing Monday. All have been offered severance packages and the option to apply for other jobs with Covanta, which operates more than 40 other waste-to-energy plants across the country, he said.
“The energy market, the warm weather” have contributed to the closure, said Osgood, who estimates energy prices are “30 percent below normal” for this time of year.
“All energy prices are down,” Osgood said. “December was the warmest I can ever remember. That really doesn’t help, especially since the energy price is predicted [this year] to be lower than last year.”
Control room operator Chris St. Peter, who has worked at the West Enfield plant for 10 years, said he was pretty upset, “just like everyone else,” when he heard the news.
“It kind of took us off guard,” St. Peter said while sitting in the control room Thursday. “Most jobs in this area are hard to come by.”
He said with all the “ mills closing everywhere” it is going to be difficult to find a new job “without possibly traveling a long ways.”
Paper and pulp mills in Bucksport, Lincoln and Old Town have closed in the past 13 months.
“Covanta is working with us with job relocation offers,” St. Peter said.
The company knows the local employees are hard workers, Osgood said.
“They definitely are all good employees and make this plant go,” the plant manager said.
The ripple effect will be felt in the logging, trucking and other industries that supply the plants with resources, Osgood said.
“We pay a dollar out and it probably goes through six or eight hands,” the plant manager said.
“We pay the wood suppliers, and the wood drivers, and the wood driver stops and pays for coffee,” Osgood said, giving an example of how people outside of Covanta will be affected by the closures.
The Professional Logging Contractors of Maine issued a statement Thursday urging Gov. Paul LePage and legislative leaders “to take action to sustain Maine biomass electricity production” in the wake of the Covanta closings announcement.
The logging group says the closure will affect “more than 2,500 jobs in the state’s logging industry.”
“This announcement should serve as a wake-up call to both the LePage administration and Maine legislators about the dangers of inaction when it comes to formulating energy policies that will benefit our state’s economy, environment, and future,” said Dana Doran, executive director for the Professional Logging Contractors of Maine. “This is a perfect example of an area where common sense needs to be applied to policy to consider the true cost of our energy, not just the price per kilowatt hour.”
Biomass is responsible for 25 percent of Maine’s overall power supply and represents 60 percent of the state’s renewable energy, according to Biomass Magazine.
“State policies that encourage greater use of biomass in Maine and neighboring states will support local jobs, ensure greater energy security, and reduce fossil fuel emissions,” the logging group’s statement says. “The economic value of a strong Maine biomass industry and the direct and indirect jobs, payroll, and tax revenue it generates will more than offset the current higher cost per kilowatt hour of such energy, while preserving the industry for the day when fossil fuel prices inevitably rise again.”
Osgood echoed the loggers’ concern.
“We were one of the last ones to take a large volume of [wood] product,” the plant manager said, adding the nearest other plant that takes biofuels is in Aroostook County.
There are between 15 and 20 trucking companies that deliver wood products to the plant in West Enfield, St. Peter said.
Fiberight announced in December that Covanta would be a major equity investor in its plan to build a $69 million facility in Hampden that would turn trash into biofuel and recycle other materials. Craig Stuart-Paul, chief executive of Fiberight, said by phone Thursday that nothing has changed.
“Covanta is partnering with Fiberight on the project and Covanta is a major investor,” Stuart-Paul said.
Fiberight has negotiated a 15-year deal with Covanta, which would construct and operate the Hampden plant.
“It will not impact that project in any way,” Regan said.