Courtesy / Municipal Review Committee
A map shows the location of members of the 115-municipality MRC
October 1, 2020
Struggling Hampden waste-to-energy plant could be running by early 2021
Courtesy / Coastal Resources of Maine
The waste-to-energy plant in Hampden has been sold to the Municipal Review Committee, a nonprofit representing the member communities who planned to utilize the plant.
By Maureen Milliken
What is the Municipal Review Committee and what's its role in the Coastal Resources plant?
More Information
More Information
The struggling Coastal Resources waste-to-energy plant in Hampden may have a new owner by the end of the year, and be back in full operation shortly into 2021, after three potential buyers submitted proposals to take it over.
The plant closed in May after a little more than a year in operation. It's owned by Fiberight, the Maryland company that developed the technology it uses to turn waste to energy, and private equity firm UltraCapital. The plant sits on land owned by the Municipal Review Committee, a group of 115 towns and cities that collaborate on waste disposal.
The plant went into receivership in July after defaulting on a $1.5 million loan from the Municipal Review Committee.
The Municipal Review Committee board said Wednesday it will review three proposals to buy and operate the plant, with a possible closing in December and a ramp-up that would allow waste to be processed there within a couple months after that.
Board members as of Wednesday had yet to review the proposals, and the names of submitters weren't made public. The timeline is a best-case scenario and an actual one will depend on who is picked, said Eaton Peabody attorney Jon Pottle, MRC's legal counsel.
In the interim, waste from the member municipalities has been going to landfills and the Penobscot Energy Recovery Co. incinerator in Orrington.
Karen Fussell, board president, said the interim solution for the waste is "less than ideal," and not consistent with what the MRC set out to do when it partnered on the Fiberight plant five years ago.
"But we're looking toward the long-term goal plan of a plant that will enhance our overall [waste] diversion for decades into the future," she said.
'One shot to get it right'
The Municipal Review Committee partnered with Fiberight beginning in 2015, as the end of a 20-year contact with PERC neared. The group, which had been with PERC since 1991, would be losing a discount rate on fees when its most recent contract ended in 2018. It was also looking for a more environmentally sustainable way of disposing of rubbish, and the new Fiberight technology, which streamlines recycling and turns more of the waste stream into energy, was chosen.
When MRC began looking for alternatives to PERC in 2012, it had 187 members, but many of them were wary of the Fiberight technology and chose different rubbish disposal solutions when the PERC contract ended. Municipalities that dropped out were skeptical of Fiberight’s technology and its ability to recycle as much waste as it said it would.
The plan for the $70 million, 144,000-square-foot waste-to-energy plant was to convert 80% of the 180,000 tons a year of waste it would take in into renewable energy or recycling, with the rest going to a landfill. Typically, 70% to 90% of municipal waste goes to landfills, which have higher fees because, unlike waste-to-energy plants, there is no revenue return.
While the technology had been used at the Fiberight's Virginia prototype plant for several years, the Hampden plant was the first large-scale commercial use, officials from the company said at the time.
The technology uses machines to sort straight from garbage bags, so people don't have to separate out recycling at home. It then sorts it further, separating recyclable items from organic waste. The organic waste goes into a pulper that breaks down the organic material, forming a biomass and removing contaminants, then removing remaining recyclables, like metals. The pulp is eventually converted to fuel in the anaerobic digester
Since the Coastal Resources plant opened in February 2019, a year after it was scheduled to, it was beset with issues including fewer global options for recycling and delays in permits.
Board members stressed at Wednesday's meeting that requirements for a new owner and operator include a local onsite representative, the ability to meet the financial requirements of running the plant, the technical ability to run it and the awareness that time is of the essence.
"We don’t want to make the mistake the second time that was done the first time, because frankly we’ve got one shot at this to get it right from the get-go," said George Aronson, technical consultant for MRC.
He said information on previous issues is known and available to potential buyers. "They should have an approach to addressing the issues," he said.
No fee hike with new owner
One reason the group of municipalities originally agreed to the Fiberight proposal was that a discount agreement with PERC on tipping fees — the amount per ton a municipality pays to have its trash hauled away — was ending.
The contract Coastal Resources included a tipping fee of $71.44 for charter MRC members and $73.65 for new members. The fee is adjusted on Jan. 1 by the Consumer Price Index, but otherwise can't be raised until a new contract is negotiated.
"We've said from day one that when they bring in new owner, [raising the tipping fees] is not one of the options," Mike Carroll, MRC executive director, said at Wednesday's meeting. "Those are under contract, and those are locked in."
Pottle, of Eaton Peabody, agreed, saying that any change in tipping fee would involve a vote by the 115 members. "It would be a longer process to even go down that road," he said. But, he said, those proposing to buy the plant are aware of what the tipping fee is and proposals should include that in their plan.
The Coastal Resources plant, operating at full function, would send 20% to 40% of waste to landfills.
Looking to the future
Board members said the three proposals will be reviewed in the coming weeks with an eye toward a December closing. It could take four to six weeks, or longer, to get the plant operating again.
Aronson said the group will look at the proposals from the perspective of which would provide the most long-term success to members as well as long-term environmental sustainability.
The plant has been maintained and the equipment "is warm," Carroll said, so it wouldn't take a long time to get it working again. He also said that there are former employees in the area still available to work for a new operator "and are looking forward to coming back."
Waste Management Inc. has the contract for any waste that is diverted from the plant, and since it's been closed, that's been all of it. Originally, diverted waste to landfills in Norridgewock and Alton. But, keeping with the mission of following the state's hierarchy for waste disposal, since the plant shut down 75% has been going to PERC, though Waste Management does not haul to the incinerator.
Fussell said Waste Management's agreement to that solution, and other entities working together "have helped work through this process for us, to the betterment of everybody."
Municipal Review Committee
The Municipal Review Committee was formed in 1991, made up of municipalities looking for a long-term group waste disposal agreement at the Penobscot Energy Recover Co. incinerator, which opened in 1988. PERC had performed below expectations and the MRC worked with the plant and its investors to restructure waste supply and other operating agreements; to implement capital projects to improve technical performance; to reserve money from cash flow for the improvement projects; and to put in place economically feasible arrangements to manage residual materials, MRC said.
MRC in 2012 began looking for alternatives for when the PERC contract ended in 2018, and in 2015 partnered with Fiberight on the Coastal Resources project. The MRC, which once had 187 members, now has 115, made up of charter members and ones that joined in 2018.
Most Recent
Most Recent
0 Comments