Maine regulators approve biomass subsidies split across 4 plants

By Katie Fletcher | January 09, 2017

In December, Maine Public Utilities Commission announced it’s approved distributing up to $13.4 million in subsidies across four biomass energy plants, including two previously owned by Covanta Holdings Corp. and two currently owned by ReEnergy Holdings.

Stored Solar LLC, a subsidiary of the French energy firm Capergy, purchased the former Covanta plants in Washington and Penobscot counties seeking to restart operations.

On Dec. 19, MPUC released a part-one order approving the proposed biomass generated energy purchase and sale agreement of Stored Solar and the combined ReEnergy Ashland LLC and ReEnergy Fort Fairfield LLC.

These agreements were submitted in response to a request for proposals (RFP) issued by the commission on June 17 pursuant to an Act to Establish a Process for the Procurement of Biomass Resources (P.L 2015, ch. 483). The Act directed the commission to establish a competitive solicitation process for one or more two-year contracts for up to 80 MW of biomass resources.

The commission deliberated all proposed contracts on Dec. 13 and voted unanimously to accept bids from Stored Solar for a combined 40 MW from its Jonesboro and West Enfield facilities, as well as a joint proposal to provide energy from a combined 40 MW from ReEnergy’s Ashland and Fort Fairfield plants. Emera Maine will be the counter-party utility for the ReEnergy contract and Central Maine Power to the Stored Solar contract.

These contracts compensate the awarded biomass generators for their electricity at above-market costs for up to a total of $13.4 million transferred from the state’s general fund. According to the act, contracts must—to the maximum extent possible—provide benefits to taxpayers, provide in-state benefits, reduce greenhouse gas emissions, promote fuel diversity and support grid reliability.

The commission is required to determine both in-state benefits and above-market costs in an expected annual dollar per megawatt-hour average for each contract. Contract payment can be reduced by the percentage difference between the actual in-state benefits achieved and the projected in-state benefits, if the determined in-state benefits are not realized. One other criterion is that no more than 50 percent of the fund may be awarded to facilities serving the NMISA regions, which is defined in the act as the area administered by the independent administrator for northern Maine or any successor of the independent system administrator for northern Maine. The ReEnergy facilities are serving this region, so will be entitled to receive no more than 50 percent of the funds.

Reasoning behind the commission’s decision will be discussed in the part-two order, which, according to MPUC’s Faith Huntington, will be released shortly.