EAST MILLINOCKET, Maine — The company that supplies electricity to the idled local paper mill won’t sign a revenue-sharing contract with the mill’s owner unless more conditions are met, likely delaying the restart of the facility, officials said this week.

Despite the Legislature’s unanimous approval of a bill Wednesday that would clear the way for the deal, statements on Thursday and Friday from Brookfield Renewable Power and a spokesman for mill owner Cate Street Capital indicate that the two sides remain far apart since talks began last month.

Brookfield wants Cate Street to provide more basic financial information about its business plan, debt situation and creditors and to prove its good faith by restarting the Great Northern Paper Co. mill, putting more than 200 employees back to work. Cate Street, which is in debt to local municipalities and vendors, wants what it describes as a sliver of Brookfield’s profits from its three dams on the Penobscot River in order to restart the mill.

“If we can’t be convinced that they are capable of continuing as a going concern, then the [10-year power purchase agreement] will be terminated,” Dan Whyte, a vice president of the Brookfield Asset Management subsidiary, said Thursday.

Meant to keep the mill operational, the power purchase agreement is part of what effectively binds the paper and power companies together. That relationship is strained as Cate Street seeks a new deal with Brookfield in order to reopen the mill.

Brookfield’s concern for Cate Street’s financial viability is a thread running through documents its attorney gave the Legislature’s Joint Standing Committee on Energy, Utilities and Technology. The committee approved the bill earlier this month.

“Brookfield cannot predicate its business judgment solely on the unverifiable public assurances of Cate Street officials,” attorney Harold Pachios wrote in a March 24 memo to the chairmen of the committee. “Brookfield is obliged to satisfy itself that the restructuring in which Cate Street claims to be engaged will result in Cate Street having the ability to succeed in the paper manufacturing business, even in the short term.

“You will note that we predicated our offer to help on the assurance the mill would restart on May 1. No one, including the Legislature, has been able to evaluate the financial information underlying Cate Street’s claims because the details have been secret,” he added later in the letter. “Brookfield, however, is a public corporation with many sophisticated investors, including the Maine Public Employees Retirement System.”

A letter Cate Street attorney Chris Howard wrote to Brookfield on March 28 stated that the company is willing to share its restructuring plan, but it doesn’t say whether that plan includes its financial elements. Cate Street also agreed to restart the mill before setting a revenue-sharing deal but rejected further preconditions, he wrote.

The mill’s planned May 1 restart date is “looking more like June 1 due to the delays experienced in this process over the last month,” Howard wrote. Howard did not return telephone messages and emails left Thursday and Friday.

The state’s ownership of the waters of Maine gives residents a powerful voice in what is done with Brookfield’s dams, Cate Street spokesman Scott Tranchemontagne said.

“The Legislature has voted unanimously in support of the bill. Brookfield produces much more power than we are contracted to take, but [Cate Street] only wants the ability to [sell] the power we contract, so they have plenty of ability to sell power to the market and make extremely high profits,” he added. “A 143-to-nothing vote indicates where the state stands on this.”

Gov. Paul LePage, who proposed the revenue-sharing deal last month, will decide whether to sign or veto the bill when he receives it, said his spokeswoman, Adrienne Bennett. She added that while the bill reached LePage’s desk on Friday, he is not expected to sign it over the weekend.

“It appears that this bill has been revised to be very similar to what the governor originally submitted. It is very important that this is passed so both parties can move forward,” Bennett said.

Saving the mill

Pachios outlined a history of the East Millinocket mill from Brookfield’s perspective that includes several points which, he said, Brookfield’s good corporate citizenship and cooperation with Maine governors and the Legislature helped restart and operate the mill.

Brookfield, he said, agreed to convey, at then-Gov. John Baldacci’s request, the East Millinocket and Millinocket mills for $1 to a new buyer state officials would find. Brookfield then waited a year through nine state and buyer courtships before Cate Street bought the mills in September 2011.

It also preserved the mill with heat and power during that time, Pachios said.

The company agreed to a 10-year contract with Cate Street to meet all of the mills’ electricity needs at a discounted, set rate, which allowed the company to avoid the fluctuations of the power market. In return, Brookfield sells the “spare” electricity to the marketplace. It’s the only such deal Brookfield has made in Maine, he said.

“We would rather not. We would make more money not doing that [contract]. We have a lot of power generation in Maine, and we don’t have these deals with [anyone else],” Pachios said. “We did it because we were asked to [by state officials]. We thought it would be a good thing to do. We wanted to be helpful.”

Cate Street, Pachios said, has owed Brookfield about $2 million since December from the 10-year contract it set with the power provider in 2011.

Besides the money it owes Brookfield, Cate Street owes East Millinocket and Millinocket about $3 million in overdue property taxes. Cate Street also is being sued for alleged nonpayment of $996,777 in connection with a failed water-recycling business in Wyoming.

The Finance Authority of Maine is poised to give Cate Street a $25 million loan guarantee for which taxpayers would be liable if the company fails in its venture to begin pellet manufacture in Millinocket. Cate Street must pay its taxes before the guarantee is finalized.

Cate Street is also working to pay several vendors it owes, Tranchemontagne said.

Energy giant with record profits

The bill on LePage’s desk lifts a state law enacted in 2002 and would permit Brookfield to sell electricity to the market at all times. But the company would have to negotiate a shared profit with Cate Street “as long as there is no reduction in labor force associated with the cessation or reduction of paper production,” the bill states.

High energy and production costs caused the mill shutdown. Great Northern Paper laid off 212 of its 256 workers on Feb. 6. Great Northern Paper’s restart plan includes addressing its outstanding payables with creditors, developing a long-term strategy for wood supply and finding further efficiencies in its papermaking process.

Brookfield has made about $6.5 million from the dams since the mill shut down on Jan. 23, allowing it to sell all of the dam’s power, according to documents Howard filed with the state.

In addition, the company announced in a statement released Feb. 6 what it called “record annual results” in its company-wide earnings for fourth-quarter 2013. Its adjusted earnings before interest, taxes, depreciation, and amortization was $272 million for the fourth quarter of 2013 compared to $195 million at the same time in 2012.

The company operates one of the largest publicly-traded, renewable power platforms worldwide — 6,000 megawatts of electrical capacity generated across 69 river systems and 12 power markets in the United States, Canada and Brazil.

Tranchemontagne said he doesn’t see Brookfield’s financial position being threatened by the revenue-sharing proposal.

“They still have plenty of capacity to make a very healthy profit on the electricity of those dams,” he said.