PORTLAND, Maine — In a breakthrough that promises to allow an innovative pipeline arrangement to move forward, University of Maine officials have negotiated upper and lower price limits for methane gas the school will buy from Casella Waste Systems’ Juniper Ridge landfill.

Janet Waldron, vice president for finance and administration for the University of Maine System, told the system’s board of trustees Monday talks have concluded with Casella to pin down details of the 20-year deal, which she said the landfill operator needed in order to seek financing to build the methane pipeline from Juniper Ridge in Old Town to the flagship Orono campus.

The trustees held their regular meeting Monday at the University of Southern Maine in Portland.

Under the newest terms of the deal, the school and Casella agree to a floor price of $3.50 per million metric British thermal units in addition to a cap of $9 per million metric Btus. Compared with No. 2 heating oil costs, that translates to a lower limit of 77 cents per gallon and a ceiling of $1.54 per gallon, said university energy analyst Andy Price on Monday.

Waldron said the school agreed to waive previously negotiated reimbursements from Casella for $500,000 in boiler retrofitting but will retain the rights to 100 percent of the “environmental attributes” of the project, which could be traded as carbon credits as the markets develop.

Waldron told the trustees the project is due to save the university $15 million over the life of the 20-year arrangement and includes a $2.4 million line of credit by Casella to fund backup natural gas service if the methane supply is ever in doubt.

The methane gas to be provided, she said, is being produced by the existing Juniper Ridge landfill and does not hinge on an expansion of the landfill.

The deal is expected to decrease the Orono campus’ carbon footprint by 40 percent, according to school officials. Additionally, Casella has agreed to give Old Town a percentage of revenues generated by the sale of landfill gas and the electricity generated by it.

Seth Koenig

Seth has nearly a decade of professional journalism experience and writes about the greater Portland region.