MRC seeks support from member towns to restart Hampden waste-to-energy plant

The first load of municipal solid waste is delivered to the Coastal Resources of Maine processing facility in Hampden on April 22, 2019. The plant would close within a year and the Municipal Review Committee, which represents the solid waste needs of 115 Maine cities and towns, is working to reopen it. Contributed photo

The group charged with managing the solid waste needs of 115 cities and towns in Maine plans to ask the member municipalities to help finance the cost to restart a waste-to-energy plant in Hampden if the group ends up buying the plant.

The nonprofit Municipal Review Committee plans to buy the Coastal Resources of Maine plant for a little more than $1 million by the end of June if a qualified bidder with enough cash does not come forward. If the committee becomes the buyer, it would need $20 million to ensure it can restart and operate successfully.

MRC officials said during a meeting Wednesday that they hope the plant, which closed in 2020 for financial reasons, will start taking municipal solid waste again late this year or early next year.

Officials explained how its member cities and towns can help support the purchase, either by co-signing for part of a $20 million loan or becoming investors by loaning cash to the MRC.

Karen Fussell, MRC’s board president, said a significant part of any investment in the plant would come after it is purchased as there is a cost to restart and ramp up waste into the facility and make it profitable. That is what the $20 million would be used for.

She said there is a good chance a qualified bidder will buy the plant, but if the MRC becomes the sole owner — and it makes sense for the MRC to own it — its members would benefit because there would be long-term economic gains and more services for them. The MRC believes it can make the plant profitable.

“In short, we would be the master of our destiny, beholden to no one,” she said.

Michael Carroll, the MRC’s executive director, said many tours of the plant for interested buyers were conducted over the last three weeks. A receiver has been appointed, an investment banked retained and preliminary bidder qualifications are due May 16, he said. Final bidder qualifications and draft agreements are due May 27. The review committee will screen proposals for financial and technical capability from May 17 to June 3, and the receiver will designate qualified bidders June 7, he said.

On June 14, an auction will be held for the highest price bid among those qualified buyers, and the target date to close on the facility is June 30.

The MRC worked with state and federal agencies, as well as other entities, to try to find funding to help it restart the plant. Federal and state guarantee programs are not assured and take a long time to secure, officials said.

MRC board member Sophie Wilson, who is Orono’s town manager, said she is frustrated that the state does not see the crisis that the MRC sees and is not pitching in funds to help get the plant up and running. Without the plant, a lot more waste will go into landfills and costs will be higher.

“Specifically, I think the state could come to the table and help us solve this instead of issuing platitudes and pats on the back,” Wilson said.

The MRC voted unanimously in February to support an agreement with Coastal Resources plant bondholders, who control the plant, to allow for a final sale by June 30, with the bondholders covering the cost to reinstate a receiver to conduct the bid process. If no qualified buyers come forward, the MRC would buy the plant.

The cost to construct it was about $85 million, with $52 million of that provided through bond financing, and those bondholders are the ones now in control of the plant. The trustee for the out-of-state bondholders is the U.S. Bank National Association. The other $30 million for construction was financed through private equity and those financiers have gone away since they lost their investment. The plant had run about seven months at full commercial operation before it shut down on May 27, 2020. The MRC owns the land the facility is on and is its landlord.

In January, the MRC board met to discuss seeking other ways to reopen the plant following failed, months-long efforts to find a qualified buyer. Discussions eventually led the to board to position the MRC as a potential buyer.

Coastal Resources was formed by the company Fiberight to finance, run and operate it. While the plant is closed, about 25% of MRC member waste is taken to Waste Management in Norridgewock, and the other 75% goes to the Penobscot Energy Recovery Co. in Orrington.

The bondholders had for months tried to sell the plant with help from the MRC. A Pennsylvania company, Delta Thermo Energy Inc., tried to buy it but lost exclusive rights to do so in December because it failed to show it could finance the sale. MRC officials said Delta also did not cover the costs to keep the plant in working condition over the winter.

If MRC buys the plant, it would bring in 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 been sending their waste to the Hampden facility as part of a long-range deal brokered by the MRC.