It’s been more than a year since Penobscot Energy Recovery Co. in Orrington, the plant that for three decades has burned trash to generate electricity, was rocked by back-to-back changes that were years in the making.
At the start of 2018, PERC reached the end of a lucrative power-purchase agreement with Emera Maine that gave it above-market rates for the electricity it produced. Its electricity revenue has since fallen from $173 per megawatt hour to around $30 or $40.
As it stopped receiving those above-market rates, the company also lost a large chunk of its trash business. More than 100 communities that sent their waste to PERC for years decided to send their waste to a new competitor, the Fiberight plant in Hampden that is slated to begin commercial operations this month after more than a year of delays.
Now, as the Bangor region enters an era with two waste processing facilities just a few miles apart that each take in tens of thousands of tons of trash annually, PERC is close to finishing a series of upgrades aimed at reducing its operating costs and eventually returning it to profitability. In the process, PERC is completely changing the technology it relies on to prepare the waste it receives for incineration.
PERC, which first opened in 1988, was profitable in the years leading up to 2018. But the 42-acre operation has been losing money since the end of its agreement with Emera Maine, according to Plant Manager Henry Lang.
Up to that point, a group of towns and cities that sent their waste to PERC had a 23 percent ownership stake in the Orrington operation. USA Energy Group of Minnesota owned 52.7 percent, and another entity, PERC Holdings, owned 24.3 percent.
But in 2016, a number of communities agreed to sell their shares to the rest of the partnership for $5.4 million. The partnership had enough money on hand to make those payments, Lang said. Seven communities that still send their waste to PERC continue to have ownership stakes, according to Lang.
Now, the facility does not have any debt, and its leaders hope that a series of new investments that have reduced its operating costs, along with a seasonal uptick in energy demand, will help it turn a profit in the final quarter of this year, according to Lang.
“We are getting ready to hit our stride, and from there, look out,” Lang said. “We’ve had to rethink how we do everything. It’s a different operating paradigm. It makes everybody anxious when there is an unknown, but people have really stepped up to the plate.”
After laying off more than a fifth of its staff last year, PERC now employs about 55 workers.
The total number of communities that send their waste to PERC has dropped from more than 200 to around 60, including 44 that directly contract with the company. They include Ellsworth, Hermon, Lincoln, Old Town and Searsport. PERC is charging those communities $76 per ton of waste, compared with $70 at Fiberight.
The total amount of waste that PERC received dropped by about 105,000 tons between 2017 and 2018, but the company still receives between 10,000 and 20,000 tons of trash each month to fuel its boilers. That worked out to 209,063 tons in 2018 and 87,438 so far this year, according to figures PERC supplied.
Besides accepting waste directly from Maine communities, PERC also has a contract with Casella Waste — which has landfills and trash-hauling operations across New England — to receive shipments from inside and outside Maine. That arrangement partly helps make up for the waste that no longer comes to PERC from the many towns and cities that opted for Fiberight.
PERC has also invested more than $2 million into technology that is close to fully implemented and that will reshape the facility from one that selectively burns about three-quarters of its waste to one that sends almost all of it to the incinerator.
Those changes — which have effectively transformed PERC from a refuse-derived fuel incinerator to a mass-burn incinerator — have expanded the portion of delivered waste that PERC can convert to marketable electricity from about 77 percent to 99 percent, according to Lang. The other two incinerators in Maine — ecomaine in Portland and Mid-Maine Waste Action Corp. in Auburn — both use the less expensive mass-burn technology.
With less waste coming in, PERC has changed its operation in another way: Instead of operating both its boilers 24 hours a day, seven days a week, PERC now runs just one of its two boilers at a time, reducing the overall power output.
PERC’s new strategy at the front end has centered on the purchase of three new grinders over the last three years. Each of the new machines is a model called the “Terminator” that cost about $800,000 and resembles a bright green shipping container on treads.
The Terminators can move around the facility and have allowed PERC to phase out the complicated system that it previously used to prepare waste for incineration.
That system used a large array of conveyor belts and screening systems to shred waste into pieces small enough for the boiler and to separate out those materials that couldn’t be burned. PERC has been developing a smaller system of conveyor belts to complement the new grinders.
While it lasted for years, the old approach was inefficient and sucked up about $1 million in maintenance costs each year, according to Lang.
The new grinders will also allow the facility to burn a greater array of waste, including glass and bulky materials — such as large tires, asphalt shingles and plastic tarps — that it previously couldn’t, Lang said.
“With this new change, we’re just grinding all the material down to size,” he said. “We’re no longer pulling out a lot of that material.”
The improvements could help PERC to accept new types of waste and collect additional disposal fees. For example, it has begun accepting deliveries of the heavy plastic rope used by lobstermen on Matinicus Island that’s otherwise hard to dispose of.