AUGUSTA –– The Legislature voted Friday to back a $13.4 million taxpayer bailout of at least two of the state’s six ailing biomass energy plants that support hundreds of logging jobs.
The 25-9 vote in the Senate and the 104-40 vote in the House followed lengthy debate and closed-door negotiations. Legislative leaders sought to balance the goal of saving the iconic jobs of loggers with the less attractive job of finding public money to prop up ailing power generators owned by multinational private-equity firms.
The amended proposal generated lengthy debate. Opponents argued that the bill contained no guarantees that it would save the remaining biomass energy plants and will likely only benefit three of them. Supporters countered that lawmakers had no choice but to try to save a group of workers who stand alongside fishermen and lobstermen as cogs in the state’s blue-collar economy and its cultural identity.
“This is far greater than a couple of energy plants and their employees,” said Sen. James Dill, D-Old Town. “Logging is a Maine legacy.”
Sen. Dawn Hill, D-Cape Neddick, the assistant minority leader, added, “They’re not asking for a handout, they’re asking for a hand up.”
Supporters and opponents were defined by neither party nor region, but rather, differences over whether the biomass industry can be saved and if the state should step in to help it.
Opponents were skeptical that the proposal would work. Sen. Garrett Mason, R-Lisbon Falls, said the industry was at the mercy of market forces that it cannot control. He said the bill, L.D. 1676, would likely only benefit two of the six biomass generators, an assessment confirmed when the owner of three of the plants told the Press Herald that the bill would not allow them to refire plants that have been shut down.
“I’m not against the industry or the people who work in it,” Mason said. “It’s because I don’t believe it will help.”
Sen. Eric Brakey, R-Auburn, agreed.
“I think we all have the best intentions … but I don’t see any guarantee that we won’t be back here in two years,” he said. “I can’t in good conscience take taxpayer money and throw good money after bad.”
Sen. Andre Cushing, R-Camden, said lawmakers needed to step in to help an industry hit by “an economic hurricane.”
Sen. David Woodsome, R-North Waterboro, said the $300 million generated by the loggers and the biomass industry was worth the public investment.
Roughly two dozen loggers whose livelihoods could be temporarily spared by the proposed rescue cornered lawmakers in the Senate chamber to plead for support. Outside the chamber, lobbyists for companies and trade groups that could benefit from the deal huddled privately with legislative leaders over a new, potentially more politically palatable, funding source. Last week the Energy and Utilities Committed voted 10-2 to support a bailout that uses money in the state’s rainy day fund. However, that funding mechanism posed problems for Gov. Paul LePage and legislators who have repeatedly argued that the state needs to replenish the fund.
The amendment approved Friday would effectively intercept money earmarked for the rainy day fund by tapping the funding stream, known as the cascade, that it draws from.
Only one of the plant owners, ReEnergy Holdings LLC, is expected to benefit from the bailout. Covanta Holding Group Corp. told the Press Herald this week that it was unlikely to restart two plants – in West Enfield and Jonesboro – that have already shut down. That means the logging companies that supply the Covanta owned plants will have to determine if trucking the waste wood and low-grade forest products that the ReEnergy Holdings plants burn is too far and economically viable.
ReEnergy Holdings is owned by Riverstone Holdings LLC, a New York-based private equity firm founded in 2000 by two former Goldman Sachs bankers, and worth an estimated $33 billion.
Rep. Gay Grant, D-Gardiner, said the proposal would ultimately benefit companies like Riverstone, not the loggers lawmakers sought to help.
“This is the kind of deal that will come back to haunt us,” Grant said, adding that the public money will end up in power generators’ pockets, not loggers.
Rep. Beth O’Connor, R-Berwick, agreed.
“There is not enough lipstick in Maine to make this bill pretty,” O’Connor said, adding that the proposal was nothing more than “corporate welfare.”
In amending the bill Friday, lawmakers removed a provision that would have specifically benefited a proposed $100 project in Aroostook County involving J.D. Irving and ReEnergy. Irving owns a sawmill in Ashland, which sends wood waste to a ReEnergy plant, and was in the process of considering whether to use waste heat and steam from the plant to dry fiber in a new facility – likely a wood pellet mill that would export product to Europe.
Critics of the bill argue that it doesn’t address the longterm issues facing biomass plants that are costly, inefficient, and are having trouble competing amid low oil and natural gas prices. Additionally, Covanta and ReEnergy have lost access to Renewable Energy Certificates from Massachusetts and Connecticut as the states restructure the credits to encourage more efficient power and heat generation.
Despite external forces working against the industry, legislative leaders have been repeatedly drawn to the prospect of helping save the hundreds of logging jobs that depend on biomass. According to the Professional Logging Contractors of Maine, an estimated 1,300 jobs are linked to the six plants left in Maine.
More votes are needed for final passage, but the margins in the initial votes suggest the measure is on its way to LePage.
Staff Writer Steve Mistler can be contacted at 620-7016 or at:
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