Waste and baled recyclables in Fiberight’s Hampden waste recovery plant. The plant has been temporarily closed until the Municipal Review Committee can find a buyer. Courtesy of Fiberight/Coastal Resources of Maine
Four entities have expressed serious, written interest in buying and managing the Coastal Maine LLC recycling and waste-to-energy plant in Hampden, according to a committee representing the solid waste disposal interests of 115 Maine municipalities.
Michael Carroll, executive director of the Municipal Review Committee, said Wednesday in a virtual board of directors meeting that encouraging progress had been made in the search for a buyer. Four entities seriously interested in the facility had signed nondisclosure agreements and two other entities reached out to the bondholders’ counsel to introduce themselves, he said.
Coastal closed its facility temporarily May 28 because of financial issues. As part of an agreement, any solid waste needing to be diverted from Coastal would go to Crossroads-Waste Management in Norridgewock. After the closure, solid waste from the 115 MRC municipalities was sent there, as well as to Juniper Ridge in Alton, near Old Town.
But to reduce the amount of waste being landfilled, Waste Management agreed to allow about 75% of that waste to go to Penobscot Energy Recovery Co. in Orrington, even though Waste Management had exclusivity to the waste.
“This was a significant revenue loss to Crossroads, but they felt this was the right thing to do,” Carroll said Wednesday.
The review committee is a nonprofit corporation that seeks to ensure affordable, long-term and environmentally sound disposal of municipal solid waste and has worked several years to sponsor Coastal, which owns and operates the Fiberight facility. Coastal’s parent company is Fiberight. Coastal sought to turn about 80% of the material it received into biogas, plastic fuel briquettes, paper pulp and similar products.
The MRC announced July 1 that Coastal had defaulted on the $1.5 million loan it received from the review committee and sent Coastal a notice of default on May 27. But Jon Pottle, the review committee’s legal counsel, said the committee was not exercising its right to terminate the agreement with Coastal, in part, because the review committee believes keeping everything in place provides a lot of value and makes the facility more attractive to potential owners and financial investors. Coastal’s default does not equate to termination of the contract, according to Pottle. He said there’s an ongoing default and ongoing efforts to reopen the facility.
With Coastal in violation of its contract, individual municipalities are not free to dispose of waste elsewhere. Their waste is being bypassed, which means they are obligated to send it to Waste Management. The alternative agreement is to send some of it to PERC, but the waste disposal agreement and contracts are still in place, according to Pottle.
The review committee announced in late May that Coastal was unable to secure a $14.7 million loan to help improve the plant and cash flow and that is why operations were suspended. One of the reasons it had difficulty is that it was unable to sell its product while awaiting state Department of Environmental Protection permits. Those permits are now in place.
Trash is dropped off at the hopper at the China Transfer Station on Sept. 11, 2019. China is one of 115 municipalities that use the Fiberight plant in Hampden. Rich Abrahamson/Morning Sentinel file
Meanwhile, the company that operated and staffed the plant, NAES Corp., of Washington state, filed a lawsuit against Coastal, saying it was not getting paid for its services and could no longer support the plant with its own money.
Asked Wednesday if any litigation Coastal faces would have to be resolved before the MRC can enter into an agreement with a new owner-operator, Pottle said MRC wouldn’t be entering into an agreement. The agreement currently in dispute is between Coastal and the operator (NAES) at the time. If and when the facility reopens, the owner would enter into its own agreement. Pottle said he did not see the current litigation as a barrier.
The plant maintains a skeleton crew, equipment is in working order and tours are conducted there, according to committee officials.
Carroll said all waste at the plant was removed and disposed of, the plant is in compliance with a state Department of Environmental Protection list, Carroll talks with the DEP every Monday and DEP officials tour the facility every Thursday.
He said potential buyers must have management on-site and agree not to raise tipping fees. He emphasized, as he has in the past, that it is important for MRC member municipalities to stay in the MRC because they are stronger together and have more negotiating leverage. Towns trying to go on their own will pay more for municipal solid waste disposal, according to Carroll.
Board President Karen Fussell said the next virtual town-hall style meeting will be at 10 a.m. Aug. 19 and updates will be provided.The goal of the next few weeks is to procure additional levels of commitments from those interested in the facility, she said.
“Everyone is trying to move toward the next level, assuring folks are truly interested in working with us to reopen the plant,” she said.
Fussell said it is important that prospective buyers have proper qualifications, technical capability and economic and financial wherewithal.
She said the board and MRC members are looking for progress and the MRC does not have the capability to hold the plant in “this sort of state of suspension, indefinitely.”
“We are really looking for more forward progress in the next three to four weeks,” she said.
George Aaronson, MRC’s technical consultant, said any delays in the process would be detrimental.
“Our recommendation is to put a premium on moving fast,” he said.
Asked when the facility would reopen after a contract is signed with a new owner, Aaronson said a lot of things must be resolved between a number of parties.
“Frankly, we don’t have a firm date,” he said. “We’re hoping we can do that within a few months.”
Aaronson noted that some of the parties interested in buying the plant were listening to Wednesday’s meeting.
Officials in towns that are part of the MRC, including Unity, Oakland and China, said in June that they hope the plant reopens.
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