Athens Energy new tax credit eligibility helps spur investments
A biomass power plant in Athens, Maine, received certification for Maine New Markets tax credits from directors of the Finance Authority of Maine. The facility is run by Athens Energy LLC, a sister company of Maine Woods Pellets Co., which runs a wood pellet manufacturing plant in Athens.
“The new energy facility will supply electricity and heat to the wood pellet facility, and burn very low quality biomass that wouldn’t be used by the pellet facilities,” said Kris Eimicke, Athens Energy and Maine Woods Pellet Company’s representing attorney. “The two companies create tremendous efficiencies.”
The certification will help the company trigger investor interest in the biomass power facility. “This is a key step in achieving the overall financing for the project,” Eimicke said.
Beyond incentivizing investors, the certification will help the entire state, specifically the Somerset County area. “It helps the state in many ways, but probably the most important way is the jobs this project saves and retains,” Eimicke said. “The pulp and paper industry has suffered a number of downturns, and the state as a whole needs to look for new ways to leverage one of its most significant resources, its timberlands.”
Maine Woods Pellets Co. and Athens Energy provide some of the needed leverage. Eimicke sees pellet mills and biomass electric generation as an important use of timber resources, “evidence by the fact that this investment will result in the creation or retention of at least 230 jobs,” he said.
The Maine New Markets Capital Investment Program provides refundable state tax credits of up to 39 percent to investors in qualified community development entities (CDEs) that reinvest in certain businesses in eligible low-income communities in Maine.
CCG Community Partners LLC is one such investor, and was previously approved by FAME for tax credit allocation to three of its subsidiaries. The credits are expected to help leverage $30.3 million in investment in the biomass plant. The proposed investments have been certified by FAME to be eligible for state tax credits totaling more than $12.13 million. A portion of the investments is also eligible for federal new markets tax credits. However, the tax credits will not be issued until the actual investments are made.
“FAME’s certification of these projects is an important step to spur further investment in this Maine-based business,” said Paul Hoffman, managing director of CCG Community Partners LLC, in a statement. “The expected tax credits will not only help create jobs directly at these sites, they should also encourage other business development in the surrounding communities.”
The investments will be in the form of loans to Athens Energy for use in construction of the power plant and the equipping of a biomass electricity generator and transaction costs. The investments will also help Maine Woods Pellet Co. expand its facility. “The additional heat from the electric plant along with stabilized electricity prices will allow the pellet mill to operate at full capacity year round, which they cannot currently do,” Eimicke said.