ORONO — With the threat of appeals behind it, the organization representing the solid waste interests of more than 100 Maine communities is moving forward with its part of the deal for a new solid waste plant in Hampden.
Meanwhile, the Maryland-based company that will build and operate the plant said it may reach financial closure soon.
The Municipal Review Committee voted at a meeting Wednesday to buy the site for the project and the utility corridor and enter into agreements with the town of Hampden and the Hampden Water District, all on certain conditions.
An officer from Fiberight, which is planning to build the plant that would sort out recyclables and break down organic materials into biofuel, also presented the latest update on how soon it hopes to close with its financial backers.
The new plant is intended to provide a solution to the increased tipping fees the towns in the committee would face after its contract with the Penobscot Energy Recovery Co., known as PERC, ends in 2018. At that time, PERC’s contract to provide energy to Emera Maine at above-market rates also comes to a close, forcing it to charge tipping fees of up to $84 to $89 per ton. Towns now pay $76 per ton, which drops to $59 per ton after rebates.
The committee board has said that the most financially viable option for its member communities is the yet-to-be-built plant in Hampden, but it has met opposition along the way from environmental advocates and potential competitors, forcing Fiberight to scale back the plant.
FINANCIAL CLOSE BY JUNE?
Steve Davey, the chief operating officer of Fiberight, said private equity has committed all of the money needed for the plant.
He would not identify who the private equity parties are, but he said legal counsel is negotiating the terms.
The private equity parties also have hired an independent engineer to vet the project, Davey said, as well as a waste consultant to vet the waste supply.
“The project is moving with great pace at this point,” he said. “Getting the appeal behind us has transformed all of our interested parties.”
When Fiberight and the committee received their permits from the Maine Department of Environmental Protection, PERC filed an appeal of the state’s decision in Kennebec County Superior Court along with its managing general partner USA Energy and Exeter Agri-Energy.
According to Fiberight, the appeals process is to blame for the slow crawl toward financial close.
“We spent the last seven months going sideways,” Davey said. “You just cannot advance financing if you don’t have the permits.”
The company hopes to close on its loans by June, but he said that “may or may not slip.”
“It’s our hope, our aspiration to get this plant ready in a year,” he said. “That’s still possible.”
When asked how soon construction would start after financial closing, Davey said he didn’t know but that “we’ll be hitting the ground running.”
In light of the delay of the financial closing process, the board voted unanimously to defer until Aug. 1 its right to end the agreement. The termination rights previously had been deferred to May 1 when financial closing wasn’t reached by Jan. 1.
AGREEMENT WITH HAMPDEN WATER
The board approved an agreement with the Hampden Water District, a quasi-municipal entity that is not owned by the town but provides service to residents, that will settle a months-long discussion about who should pay to extend the waterline and upgrade a pump system.
The Municipal Review Committee had chosen a route for the waterline extension that was technically feasible but not completely consistent with the town’s economic development planning. While the town “strongly preferred” that the committee extend the waterline up Cold Brook Road, it was the water district that asserted it had the ability to require that route, Hampden Town Manager Angus Jennings said in an interview.
If the committee had wanted to question the water district’s authority, Jennings said, it would have had to go to the Public Utilities Commission.
The water district maintained it had authority over the issue because the committee is required to provide water not just to the plant but to the whole parcel.
“As soon as you have multiple people tying in, it falls under public,” Jennings said.
Besides the different extension, the water district was advised to upgrade its infrastructure because of the projected volume of usage from both the facility and future development, Jennings said. One upgrade was a “costly pump station,” to which the water district asked the committee to contribute.
Committee Executive Director Greg Lounder said it went back and forth about who should have the responsibility for the development.
Ultimately, the board voted to approve the contract under the condition that it pay a fixed amount of $202,375.
The contract was unclear about the exact price and whether the water district could charge the committee for overages.
“I don’t trust that the target won’t move, and they seem to think that we are a cash cow,” said board Treasurer Sophie Wilson, of Orono.
Because of the lack of time, Wilson was chosen as the authorized signing officer for the amendments.
A memorandum of understanding between the town and the committee also was approved, 6-1, with board President Chip Reeves opposed. It says Hampden will contribute $167,000 to the infrastructure, which it will receive back as tipping fee rebates from Fiberight.
Jennings said the Town Council voted to contribute to the costs because “at the end of the day, they felt that the town would be much better off having water along that road.”
The board also approved an indemnity agreement, 6-1 with Reeves opposed, that would require Fiberight to reimburse the town in the event that there is no plant and thus no tipping fees.
In other business, the board voted to exercise the option to purchase the project site and utility corridor. The owner of the 90-acre site, H.O. Bouchard, dropped the price to $260,000 to contribute $25,000 to reimburse the town of Hampden.
The owner of the $160,000 corridor, Maine Ground Developers, Inc., have yet to get approval from Hampden for their own sewers. At the meeting, Jennings said the town has been waiting for additional documents from the developers for a year. The purchase would be contingent on the sewer line being approved.
The cost of phase two of the road and utility project, which is $2.91 million, also was approved. The work is expected to be complete by October.
The board also authorized Reeves to sign amendments to the Master Waste Supply and Site Lease Agreement. The rebate structure was adjusted to reflect the change in the amount of tonnage the plant can expect to receive. Rebates aren’t expected to kick in until 2020 or 2021, and then they will vary, reaching up to $12 per ton.
Part of the tip fee from towns who sign on with Fiberight directly but don’t join the committee also will be distributed to the joining members as a kind of rebate of up to $2.21 per ton.
WORST-CASE SCENARIO
The component that may take the longest to get delivered to the Hampden plant is the materials recovery facility, or MRF, which will do the front-end work of receiving and separating the recyclables. As long as the MRF is in place, the Fiberight plant can receive waste by its proposed start date of April 1, 2018.
In the worst-case scenario, if the MRF is not ready by April, the committee would have to find a way to get all of the towns’ waste to the landfill in Norridgewock, which is its contingency plan. Lounder presented one option in which the towns were divided up based on location, but some questioned whether the plan would work with the regulations.
The towns closest to Fiberight would take trash there and then have it hauled to Norridgewock, which essentially would make the Hampden plant a transfer station. Some of the board members said they didn’t want to consider that option, as it would require further permitting.
While some argued that having a “backup to the backup plan” was a good idea, others said the board shouldn’t belabor the issue.
“We’ve contingencied this project to death and … we recently just heard that we’re gonna be on target,” Reeves said. “We’re beating ourselves up over something that might not come to fruition.”
The board voted to ask that the committee staff look at the options for a “plan C” and report back with more information, including the option of transferring trash, 4-3. Board members Cathy Conlow, of Bangor; Sue Lessard, of Bucksport; and Wilson voted against the motion because they didn’t agree with looking into an option that would require permitting.
Madeline St. Amour — 861-9239
mstamour@centralmaine.com
Twitter: @madelinestamour
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