Maine’s struggling forest and wood-energy industries received a boost Wednesday when the Public Utilities Commission voted to approve a portion of a subsidy meant to keep two stand-alone biomass power plants alive, as well as the jobs linked to them.

In making the determination, the three commissioners agreed with staff findings that Stored Solar LLC failed to meet all the performance metrics required to get the full subsidy, but had provided enough benefits to get 25 percent of what was possible, or roughly $1.2 million.

Stored Solar LLC received a $1.2 million state subsidy intended to keep its wood-fired power plants operating and their workforces intact in the Penobscot County town of West Enfield, above, and the Washington County town of Jonesboro. Staff photo by Brianna Soukup

Controversy had been growing for weeks over whether Stored Solar has adequately met the terms of a 2016 contract, part of a $13.4 million taxpayer-funded bailout approved by the Legislature.

The PUC staff has spent months trying to determine whether Stored Solar has created an agreed-upon number of jobs, purchased enough wood fuel and made sufficient capital improvements at its plants in West Enfield and Jonesboro to earn its share of the money.

But Stored Solar fell far short of what it could have received.

Stored Solar was supposed to buy 500,000 tons of low-grade wood from logging contractors, maintain more than 40 jobs and invest $2.5 million in the plants. The PUC staff found the company largely met the jobs goal, but bought only 40 percent of the wood and invested only 60 percent of the required money.

Based on that, the staff recommended trimming the subsidy, resulting in a payment of roughly $1.2 million.

DETAILED REVIEW OF DATA

During deliberations, PUC Chairman Mark Vannoy pointed out that if the company had reached 100 percent of those targets last year, it would have been eligible for $4.6 million. To get to the $1.2 million payout, Vannoy chronicled the scrutiny undertaken by the PUC staff. That included reviewing scale reports and check stubs for wood delivery, asking for sworn statements from suppliers, and confirming planned and forced generation outages with ISO-New England, the region’s grid operator.

The PUC also disallowed credit for wood delivery that it determined didn’t meet the standards of the contract, as well as more than $900,000 that Stored Solar had spent on logging equipment that it wanted to book as capital improvements.

Despite these disallowances, one of the principles in the company, Fahim Samaha, said he appreciated the PUC’s decision and was grateful to the company’s employees and suppliers. He pledged to make the plants self-sufficient contributors to Maine’s emerging bioeconomy.

“Stored Solar reopened two shuttered biomass-fired generating facilities and brought back good-paying jobs to economically challenged areas in Penobscot and Washington counties,” Samaha said.

But the PUC’s decision was not embraced by some logging contractors and allied lawmakers, both Democrats and Republicans. They say the company failed to maintain the number of logging and trucking jobs that were the prime intent of the taxpayer subsidy.

They have readied a bill, L.D. 1745, aimed at preventing the PUC from giving Stored Solar its subsidy. The bill also seeks to have the Attorney General’s Office investigate the company.

NEXT LEGISLATIVE STEP UNCERTAIN

The next step for that legislation wasn’t clear Wednesday. But one of Stored Solar’s chief detractors, Rep. Seth Berry, D-Bowdoinham, expressed disappointment that the company received any money. He said it’s counter to the accountability benchmarks sought by the Legislature.

“We now have clear, undisputed evidence that Stored Solar didn’t make good on its commitments,” Berry said “So why would we not withhold these funds? Taxpayers rightly expected Stored Solar to pay its bills, to purchase the true amount of fuel required by their contract, and to be a good corporate neighbor and support rural Maine.”

Wednesday’s action had attracted sharper scrutiny after Fahim Samaha and his wife and partner, Kimberly Samaha, charged a day earlier in the Press Herald that their business was being undermined by unsubstantiated charges made by the head of Maine’s logging trade group. They claimed that Dana Doran, executive director of the Professional Logging Contractors of Maine, had been spreading false rumors that the Stored Solar’s biomass plants are in financial trouble and have laid off most of their workforce.

A PLANNED SHUTDOWN

The Samahas told the newspaper that the plants are currently in a planned shutdown because an early mud season has made timber harvesting difficult, and because demand for electricity has tapered off with mild weather. The plants will ramp up again in a couple of months, they said, along with timber harvesting activity, to deliver fuel for high summer power demand in New England.

Doran declined to comment Tuesday on the allegations, and said he hadn’t received a Jan. 25 letter from Stored Solar in which it accused him of making false public statements that the company owes loggers and suppliers money.

He also declined Wednesday to comment on the PUC’s decision.

The Samahas acknowledge problems making payments to suppliers as well as past-due property taxes early in 2017. Those cases have been well-documented in the media. But they say accounts now are current, and Doran’s persistent comments appear to be part of an orchestrated campaign to harm Stored Solar.

Maine’s biomass power plants use leftover wood from forestry operations and sawdust from lumber mills to make electricity. They’re a crucial outlet for low-grade fiber and a source of employment for hundreds of logging contractors and truckers in rural areas where paper mills have closed.

But outdated technology means the plants can’t compete with wholesale electric prices in New England without subsidies. The two-year bailout was intended to be a temporary bridge, to give plant owners time to diversify.

Stored Solar says it’s transforming West Enfield and Jonesboro into combined heat and power facilities that won’t need government support. It said it will break ground this spring on a shrimp farm that will use excess heat and power from the West Enfield plant.

Making the plants profitable will take a combination of hard work and luck, said Eric Kingsley, vice president of Innovative Natural Resource Solutions, a forestry consulting firm in Portland.

“They need to find enough co-location partners to make one or two of those facilities viable in the long term,” he said.

Kingsley also said that while the company only harvested 199,000 tons of biomass last year, rather than the 500,000 ton target, every ton of wood kept some loggers working. Looking to 2018, Kingsley said low wholesale power prices and a warm winter following the January cold snap poses an ongoing challenge.

“Whether they can they fulfill their obligations this year depends on what happens in the broader wholesale electricity market,” he said.

Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

Twitter: TuxTurkel

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