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Maine Regulators Recommend Slashing Biomass Company's State Subsidy

Jay Field
/
Maine Public
A wood chipper at a Maine biomass plant.

Maine utility regulators are recommending that an embattled biomass company forfeit 20 percent of its $1 million state subsidy for falling well short on purchases of waste wood from Maine loggers — a reduction that some loggers say is not nearly enough.

When Stored Solar won a slice of the $13.4 million taxpayer bailout two years ago, it agreed to a range of conditions. Those conditions are reviewed by the Maine Public Utilities Commission which determines whether the biomass operator has delivered on its promises.

“Basically there were three metrics that were required to be measured for the purposes of this contract,” says Harry Lanphear, administrative director of the PUC.

Lanphear says Stored Solar had promised to purchase 500,000 tons of low-grade wood from logging contractors that would then be burned for fuel. The company also had to maintain over 40 jobs while spending over $2.5 million to upgrade its biomass plants in Jonesboro and West Enfield.

But a preliminary review of Stored Solar’s performance by PUC staff has found that the company only met one of those three benchmarks — maintaining jobs — while falling well short of the other two: It purchased less than 40 percent of the waste wood it promised and it spent $1 million less on capital expenditures than it was supposed to.

Waste wood purchasing is the primary reason the Legislature authorized the taxpayer bailout for the state’s ailing biomass industry in the first place, because Maine hundreds of Maine loggers depend on biomass sales to stay afloat.

“The incentive really doesn’t match the performance,” says Dana Doran, director of the Professional Logging Contractors of Maine, an industry group that questions whether the PUC’s recommended 20 percent subsidy reduction for Stored Solar is enough.

Doran’s group has been critical of Stored Solar because the company has failed to pay logging contractors at various points last year — and it still owes some of them money.

The late payments prompted state lawmakers to target Stored Solar with an unusual bill that would effectively void its subsidy contract while calling for an investigation by the Maine Attorney General. Lawmakers have slowed that proposal because the PUC is in the middle of reviewing Stored Solar’s performance.

But some have raised questions about whether the company should have ever qualified for the subsidy program following an examination of the bailout law by Maine Public Radio. Now, Doran believes lawmakers should pay close attention to the PUC’s draft findings.

He says because Stored Solar didn’t purchase the required amount of waste wood, that suggests it wasn’t producing electricity as often as it claimed — or is required to by law.

“If the PUC is saying that they purchased 60 percent of wood than they said, then certainly there must an equal reduction in the amount of hours they actually ran,” Doran says.

In a written statement, Stored Solar said the PUC’s draft findings confirm that the company followed the law and is eligible for the state subsidy. But the company did not address questions raised by the PUC’s analysis.

The report is redacted in several key areas, but it appears that Stored Solar attempted to argue that access to biomass fuel was the same as actually purchasing it — an argument the PUC rejected. Stored Solar was also thwarted in its attempted to have its purchase of logging equipment count toward investments in the energy plants.

Doran says he’s puzzled by the logging equipment purchase.

“I’m not sure why a company that makes electricity from burning wood wants to be in the logging business,” he says.

Doran says his group will file comments on the PUC’s findings soon.

Other stakeholders are expected to do the same before the three-member PUC rules on the subsidy contract in early April. If the staff report is approved, Stored Solar will receive over $1.2 million in taxpayer funds — about $325,000 less than it would have had it met all three requirements in its contract.

Journalist Steve Mistler is Maine Public’s chief politics and government correspondent. He is based at the State House.