Hampden waste plant could be ‘rendered useless’ after natural gas shutoff
The $90 million Hampden waste plant that has been shut down since last year could be “rendered useless” if its natural gas service isn’t restored soon.
That’s according to the Municipal Review Committee, which represents the 115 communities that sent their trash to the plant for about six months before it shut down in May 2020, unable to pay its expenses.
The Municipal Review Committee has filed a petition with the Maine Public Utilities Commission to force Bangor Natural Gas to provide gas service to the trash processing plant off Cold Brook Road. The plant has been without natural gas as the weather has grown colder and the winter approaches, according to filings with the commission.
The inability to secure gas service comes as the Municipal Review Committee and the bondholders who funded the plant’s construction attempt to sell the facility after it’s been dormant for more than a year-and-a-half and after their chosen buyer, Delta Thermo Energy, lost its exclusive right to purchase it this past summer as it struggled to secure financing.
The Municipal Review Committee filed its petition on Nov. 17, more than two weeks after it requested a new account with the gas company on Nov. 1 to maintain gas service to the defunct plant for winter heating and to keep the facility in a condition that would allow for a sale. The group also warned of potential environmental damage if gas isn’t restored.
“If the heat is not turned on at the Hampden facility and temperatures drop below freezing for any length of time, it is highly likely that there will be no plant to sell,” Municipal Review Committee Executive Director Michael Carroll said in an email to Bangor Natural Gas.
Bangor Gas, which declined comment for this story due to pending litigation, refused to create that account. It said that Coastal Resources of Maine, which developed the plant and was its original operator, still owed it money from its time operating the plant, according to the filings with the utilities commission.
The gas company on Monday said in a filing with the Public Utilities Commission that court orders had eliminated its obligation to provide gas to the facility. It also described the Municipal Review Committee’s claims of potential environmental damage from a lack of gas service as “scare tactics” and “red herrings” to get the Public Utilities Commission to intervene in a matter over which it has no jurisdiction.
The Municipal Review Committee owns the land where the plant is located and is one of the parties that holds the plant’s solid waste processing license from the Maine Department of Environmental Protection.
The cold weather has not yet resulted in damage to the facility or environmental hazards, as far as the Municipal Review Committee knows, Carroll said. But he acknowledged the possibility of building damage and the potential that it could make it impossible to sell the plant to another operator.
“If pipes freeze, there will be both a mechanical and environmental issue so significant that the plant will be rendered useless,” he said in the Nov. 1 email to Bangor Natural Gas.
In its case before the Public Utilities Commission, the Municipal Review Committee is arguing that Bangor Natural Gas can’t deny it service under the commission’s rules. It also said it had not been ordered by a court or administrative agency to pay Coastal Resources’ outstanding gas balance. The committee said it was a credit-worthy customer and noted that it had struck an arrangement with Versant Power to pay the plant’s electric bill.
Bangor Natural Gas stopped service to the facility as it sued Coastal Resources of Maine due to unpaid bills and breach of agreement. That lawsuit, filed on Aug. 24, seeks over $173,000 in past gas service and over $300,000 for an anticipated breach of contract by Coastal Resources regarding minimum volume payments.
A judge has sealed the lawsuit from public view, a clerk at the Penobscot Judicial Court said Monday.
In that lawsuit, Bangor Gas also accused the U.S. Bank National Association, the trustee for the bondholders that own the plant, of negligent misrepresentation and unjust enrichment. Finally, it accused the Municipal Review Committee of unjust enrichment.
Bangor Gas received default judgments against both Coastal and U.S. Bank in that lawsuit, though U.S. Bank, which declined to comment due to pending litigation, is currently challenging that judgment and has filed a motion to dismiss the case.
While the Municipal Review Committee owns the land that the Hampden plant sits on, the plant and all its machinery are owned by the Coastal Resources of Maine. However, the plant and equipment are collateral pledged to a collection of bondholders who funded the plant’s construction and are now trying to sell it.
In addition to broken and exploding pipes, a lack of gas service in the building could ruin machinery and cause environmental problems from a release of chemicals, including bleach, diesels, lubricants and polymers, Carroll said in an affidavit filed with the Public Utilities Commission.
It could also put the plant’s anaerobic digester tanks at risk. Those tanks hold more than 550,000 gallons of sludge water that must be kept at a temperature well above freezing, Carroll said.
Delta Thermo Energy had pledged to pay for winterization and other costs for the Hampden facility, including gas, under a December 2020 memorandum of understanding that gave the Pennsylvania company exclusive rights to purchase the property. Those pledges were binding, according to court documents.
However, Delta Thermo did not pay “a substantial amount of winterization costs,” including for utilities like gas, electricity, water, and sewer, according to filings.
That failure to pay contributed to the August 2021 decision to end Delta Thermo’s exclusive right to purchase the plant, though the company had also missed several deadlines to show proof that it had financing to complete the purchase, according to the Municipal Review Committee.
Delta Thermo CEO Rob Van Naarden said Monday that his company ended the memorandum of understanding — and thus its obligation to pay utility costs — after it lost the exclusive ability to buy the operation.
“[W]hy should we pay for anything while the MRC negotiated with another party while we were paying expenses?” he said.
He said Monday that no one had provided his company information on costs after it agreed to pay utilities. He noted that Delta Thermo had continued to employ someone to monitor the Coastal Resources facility up until recently.
“This was an act of continued good faith at our expense,” Van Naarden said. “This ended last week.”