As loggers get stiffed, Maine learns a lesson about propping up struggling industries

Last year, lawmakers approved a $13.4 million bailout for the state’s biomass industry. The money, collected from Maine’s taxpayers, flows to two companies that generate electricity by burning waste wood at plants in Maine. The aim of the deal was to keep Maine loggers working to provide wood to the biomass plants.

Instead of helping the loggers directly, however, the scheme, which Gov. Paul LePage backed and signed into law — despite his recent claims to the contrary — requires Maine people and businesses to buy electricity produced at the biomass plants at above-market rates. Under its contract, ReEnergy, which has plants in Fort Fairfield and Ashland, will receive a fixed price of $46.50 for each megawatt-hour of electricity it produces. When the market price for its electricity is below that rate, the state fund will pay the difference. If the market price is above that level, ReEnergy would reimburse the state for the difference. The average wholesale market price for Maine in 2016 was $34.71 per megawatt-hour, according to data from the regional grid operator, ISO-New England.

Stored Solar’s contract gives it a fixed subsidy of $13.40, on top of the market price, for every megawatt-hour it generates. Its plants are in Jonesboro and West Enfield.

In exchange for the money, the two companies pledged to keep 87 people, including loggers, employed for two years. They must also buy 1.1 million tons of Maine wood waste each year. The state requires the companies to set up a security deposit to ensure the job and wood purchase pledges are upheld. The deposit is held until the state completes a review, at the end of each year, to ensure the requirements are met. Central Maine Power Co. is holding a nearly $1.2 million deposit from Stored Solar, and the company is expected to deposit another $800,000 next week.

The Fiddlehead Focus / St. John Valley Times staff are pleased to feature content from our sister company, Bangor Daily News. To read the rest of “As loggers get stiffed, Maine learns a lesson about propping up struggling industries,” an article by contributing Bangor Daily News staff, please follow this link to the BDN online.

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