It could take 2 years for the Hampden waste-to-energy plant to make a profit once it is back in operation

An official with the Municipal Review Board, which represents the solid waste interests of 115 Maine communities, said Thursday that it could take up to two years for a waste-to-energy plant in Hampden to return to profitability. once it is operational again.

Karen Fussell, chair of the board of directors of MRC, told a virtual public hearing that a significant part of the investment in the plant will come after its purchase, because there is a cost to restart and increase waste in installation and make it profitable.

“We estimate these costs will be in the range of $20 million, which is not negligible,” Fussell said.

The MRC has discussed how to fund this cost and has worked with state and federal agencies, as well as other entities.

“It is very difficult to find a source of financing because everyone is looking for guarantees…”, she said.

The MRC announced earlier that it planned to buy the plant from Coastal Maine Resources for $1.5 million if no qualified bidders bought it by June 30.

He voted unanimously last month for a deal with the facility’s bondholders, who control the plant, to allow a final sale of the plant on that date, with the bondholders covering the cost of reinstatement. a receiver to conduct the bidding process.

Thursday’s meeting defined this process. MRC chief executive Michael Carroll said an investment banker will be hired to conduct a series of solicitations for a buyer and an asset purchase agreement will be signed between the MRC, the receiver and the bondholder.

Buyers will be considered qualified if they have the financial ability to acquire the plant – in fact have the money in the bank, according to Carroll. The buyer must have the ability to operate the plant knowing it will do so at a loss before positive cash flow is realized, Carroll said.

The cost to build the plant was about $85 million, of which $52 million was provided through bond financing, and those bondholders are the ones who now control the plant, according to Fussell. The out-of-state bondholder administrator is the US Bank National Association.

Asked on Thursday why bondholders are willing to accept just $1.5 million for the plant after investing far more than that, officials said they believe bondholders are hoping maybe more than that with qualified potential buyers. They also said they believe bondholders are realizing the deal is their best option after a long and difficult process to find a buyer.

The remaining $30 million for the plant’s construction was funded by private capital and those backers have been gone since they lost their investment, Fussell said ahead of Thursday’s meeting. The plant had operated for about seven months in full commercial operation before closing on May 27, 2020, she said.

The MRC owns the land on which the plant is located and is therefore its owner.

In January, the MRC board met to discuss finding other ways to reopen the plant after months of unsuccessful efforts to find a qualified buyer. Discussions eventually led the board of directors to position the MRC as a potential buyer.

The Hampden facility closed for financial reasons. Coastal Maine Resources was created by the company Fiberight to finance, manage and operate it. During the plant shutdown, approximately 25% of RCN member waste is directed to Waste Management in Norridgewock, and the remaining 75% goes to the Penobscot Energy Recovery Co. in Orrington.

The bondholders attempt to sell the plant with the help of the MRC. MRC’s interests and efforts to do so, however, have been hampered by the complex ownership structure and inaction on the part of the bondholders, who occupy the primary position in the receivership and sale process, according to the members of the MRC Board of Directors.

A Pennsylvania company, Delta Thermo Energy Inc., attempted to buy the plant but lost exclusive rights to do so in December because it failed to demonstrate that it could finance the sale. MRC officials said Delta also failed to cover the costs to keep the plant running through the winter.

According to Fussell, the MRC is currently developing the outline and concept of a financing option that would involve full trust and credit guarantee by member municipalities.

“We anticipate that we will have this more fleshed out and made available to members probably in early April,” she said.

Members interested and able to participate and support the concept would receive a waiver fee discount for a period of time.

The $1.5 million is the amount the MRC could afford to buy the plant, she said.

Carroll said if MRC bought the plant, it would hire an entity to operate it.

Central Maine communities that are members of the MRC include Albion, China, Freedom, Oakland, Palmyra, St. Albans, Thorndike, Troy, Unity, and Vassalboro. Many communities had sent their waste to the Hampden facility under a long-term agreement brokered by the MRC.

Fussell said MRC officials expect another public meeting to take place in mid-April. A regular MRC board meeting is scheduled for April 27, she said.

She said MRC members were excited about the latest developments. Getting to this point, she said, has been a long road and the MRC knows everyone wants the process to be completed and moving forward with a plant that is operating and processing the waste as planned.

“Looks like we’re on this road,” she said.


Use the form below to reset your password. After you submit your account email, we’ll send you an email with a reset code.

” Previous

Following ”

Comments are closed.