PERC awaits votes by communities on higher fees

The fate of the Penobscot Energy Recovery Co. waste-to-energy incinerator hangs in limbo.

Ninety-one communities send their trash to the plant in Orrington. The company has said that it needs to charge its customers more.

Its customer communities are in the process of voting on an interim agreement that, in some cases, calls for tripling the tipping fees. The interim fee of $19 would be charged while PERC and its customers negotiate a long-term contract.

From Albion to Winthrop votes are being cast on the contract. To date, 33 communities have approved the interim agreement, 7 have rejected it, and 51 have yet to vote.

Officials from PERC and a regional agency are out soliciting support, hoping to convince the remaining 51 communities to support the interim contract.

The vice president of operations of KTI Energy Inc. and the managing general partner of PERC, Lynn C. Johnston, earlier in the year said that the interim agreement needed approval by communities that deliver 90 percent of the waste to the plant.

During an interview Thursday he backed away from the 90-percent figure but would not specify how many communities needed to approve the agreement to keep the plant open.

He said the communities that approved the interim contract represent 66 percent of the waste stream; those that rejected it represent 15 percent. The remaining communities, mostly small towns and villages, will vote on the interim agreement in the coming weeks.

“The communities I work with don’t like the situation but they prefer it to the plant closing,” Don Meagher said Thursday. Meagher is a vice president of Eastern Maine Development Corp. and district coordinator of one of its agencies, the Penobscot Valley Refuse Disposal District, which represents 30 PERC communities.

Brewer is one of the communities that voted to reject the interim contract. Thursday afternoon City Manager Harold Parks said, “The position of the City Council is that they have a binding contract. Brewer continues to haul its trash down to the incinerator. We have 28 years left on a 30-year contract at $9.82 a ton.”

The other communities who voted to pay more, for the most part, go along with the difference. In southern Maine, many customers of Maine Energy Recovery Co. in Biddeford, PERC’s southern sister, voted to approve the interim agreement only if all the other customers agreed.

The difference means that some PERC customers may avoid higher fees for a time.

“To try to cut off the comunities before we had a long-term agreement was something we wanted to avoid,” Meagher said. “At the time of the long-term agreement, communities who voted against the interim contract would have to make up the difference.”

They would have to pay the additional $19 a ton before signing the new contract.

Should the necessary number of communities fail to approve the interim or long-term agreement, the investors in PERC have said they would have one alternative.

“From an investor’s standpoint, there’s not really any alternative to shutting it down,” said Gary Chandler, vice president and chief financial officer of Energy National Inc., a general partner in PERC.

When Bangor approved the interim agreement, councilors also said they wanted alternatives explored, such as what happens if PERC declares bankruptcy.

Shutting down, and declaring bankruptcy would endanger the contract PERC has to sell power to Bangor Hydro-Electric Co., which is a sweet deal for PERC.

“If the hydro contract goes, the plant is shut down, period,” Chandler said.

Chandler and Johnston said that the power company has been seeking ways to get out of the contract.

Things are a little different at MERC, which sells electricity to Central Maine Power. “CMP has been very cooperative, and Bangor Hydro has been just the opposite,” Johnston said.

A spokesman at Bangor Hydro would not comment extensively.

“While the people involved in PERC are out negotiating with towns, we will make no public comment,” said Bill Cohen, who is also a Bangor councilor. As a councilor Cohen has neither commented nor voted on matters relating to PERC, and when it is the only item on the agenda, he has not attended the meeting.

Of the price Bangor Hydro pays for power from PERC, he did say, “It’s among the most expensive we have today.”