Stored Solar, the biomass generator scheduled to receive state subsidies at its plants in West Enfield and Jonesboro over the next two years, has settled with loggers who claimed they were not being paid. The company also told state regulators it would like to rework its share of a two-year subsidy agreement to defer the actual payments until it demonstrates in-state benefits are actually achieved.
In December, the PUC split $13.4 million in state subsidies over two years between Stored Solar and the state's other biomass power company, ReEnergy Holdings, as part of a stop-gap plan approved by the 127th Legislature to assist Maine's struggling loggers who had been hit hard by paper mill closures and the closure of the biomass plants in West Enfield and Jonesboro by former owner Covanta Energy in March 2016.
Covanta's closures occurred after Massachusetts changed how it pays for biomass energy. Stored Solar bought the two facilities in October. Covanta Holding Corp. (NYSE: CVA) is based in Morristown, N.J. Stored Solar LLC, which is wholly owned by Capergy US LLC, is part of Capergy SA, a French corporation.
In mid-March, following allegations by the Professional Logging Contractors of Maine that some loggers had not been paid, the PUC asked Stored Solar to provide a full financial accounting of its West Enfield and Jonesboro facilities and "the status of any payment obligation to suppliers, contractors or employees."
In a March 27 letter replying to the PUC, Stored Solar Vice President William Harrington told regulators the nonpayment issue had been resolved.
"Stored Solar is not in default under any of its obligations with respect to the facilities," he wrote. "The contractors or employees are fully paid."
Harrington said the alleged non-payments involved an "invoicing dispute with a few biomass suppliers" and told the PUC the company has reached agreements with those suppliers and outside of those agreements "there are no biomass invoices more than 15 days past due."
Harrington provided additional context, alleging that the failure of a "few biomass suppliers to honor their contractual commitments" caused "substantial harm to Stored Solar" by forcing its Jonesboro facility to operate at less than one-third of its 20 megawatt capacity, "causing substantial loss of revenue." That drove Stored Solar to pay higher prices for biomass deliveries, he wrote, creating "uncertainty around future operations, which in turn severely hindered Stored Solar's ability to attract investors and lenders for its efforts to revitalize Maine's bio-economy. Investors will not invest if it's unclear whether the suppliers will honor their commitments."
Summarizing Stored Solar's economic impact since purchasing the closed West Enfield and Jonesboro facilities from Covanta Energy last October, Harrington reported the company as of March 24 had:
He also told the PUC the company sees opportunity in Maine based on the "wealth stored in its forests."
"Maine is at the crossroads with respect to its bioeconomy," he wrote. "Maine has experienced (and is experiencing) a significant economic downturn due to the closure of the pulp and paper mills, but there is now a major opportunity to become the epicenter of the national bioeconomy."
In a separate letter to the PUC, also dated March 27, Harrington asked the PUC to rework the company's subsidy payments, stating that it did not want to receive any payments under its share of the $13.4 million until its annual report proved it had achieved the in-state benefits called for in its contract with Central Maine Power.
"The perception that Stored Solar is an organization who is a beneficiary of a subsidy is inconsistent with the Stored Solar's business plan for developing the biomass plants," Harrington wrote.
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