PERC, municipalities settle legal dispute
Owners of the Penobscot Energy Recovery Co.’s waste-to-energy plant in Orrington and the organization that represents most of the Maine municipalities that have brought their trash to the facility for three decades have withdrawn their respective lawsuits against each other.
Both parties announced Thursday that they had reached an agreement that clarifies how they will wrap up their business relationship at the end of March 2018.
Nearly 200 Maine towns and cities send trash to PERC’s 25.3 megawatt incinerator, which can process over 300,000 tons of municipal trash annually.
The lawsuits date back to 2014, when the Municipal Review Committee representing the communities filed suit against USA Energy Group LLC, PERC’s majority owner, and USA Energy subsequently filed a countersuit against the MRC. Both lawsuits have been dismissed with prejudice, meaning that they cannot be brought back.
No judgment was entered against either party and neither one will receive any payments as a result of the lawsuits.
The settlement does, however, resolve and clarify a number of business issues related to the wind up of the existing arrangements between the municipalities and PERC.
"This is a win-win for PERC and the MRC, as well as the communities we serve," John Noer, president of USA Energy, said in a statement accompanying the announcement. "We are pleased to put the litigation behind us and to be able to now direct all of our energies to serving our customers and implementing our post-2018 operating plan."
Greg Lounder of MRC agreed, stating that the “agreement allows both parties to move forward with their respective plans to provide service post-2018 while providing predictability as the parties wind up their existing business relationship at the end of March 2018."
Details of the settlement spelled out
The agreement reached between PERC and its municipalities includes the following items:
A new partnership agreement that clarifies the process for wrapping up the existing partnership between PERC's private partners and the municipalities that collectively own 23% of the PERC facility and that are represented by the MRC.
An agreement for communities that have an ownership in PERC (i.e., “equity charter” municipalities) to sell their interest to PERC's private partners. Those equity charter municipalities that have a post-2018 waste disposal agreement with PERC will have the opportunity to remain owners.
A guaranteed stream of cash distributions for MRC communities for the remaining term of the existing agreements.
Both sides said in their joint statement the agreement brings certainty to the termination process and allows them each to go their separate ways “in a clear, orderly and amicable fashion” once their current waste disposal contract expires at the end of March 2018.
The initial framework for settlement was reached in late August and signed by both parties this week, following several months of discussions and negotiations about the many details in the agreement. The MRC board approved the agreement at the annual membership meeting on Dec. 14, 2016. It takes effect immediately.
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