AUGUSTA, Maine — Maryland-based Fiberight LLC is asking the Finance Authority of Maine to help connect it to $45 million in tax exempt bond money to build and operate a plant in Hampden that will change trash into biogas.
FAME is holding a public hearing at 10 a.m. Monday at its office, and those who want to provide comments or attend must let the agency know in writing by Friday.
“What we’re here for is to be a tool for businesses to find better financing,” William Norbert, FAME’s governmental affairs and communications manager, said Wednesday. “Through us, they get access to a special lower rate. We’re providing them a conduit bond.”
Fiberight is asking for up to $45 million in bond funding for the $69 million project in Hampden as an effort to get the best interest rate, according to Fiberight CEO Craig Stuart-Paul.
“I know some people will say, ‘Hold on, the state of Maine is financially supporting the project,’ but that’s not true,” Stuart-Paul said. “These are conduit bonds. There is no liability to the state or the region.”
Casella Waste Systems Inc. in January gained approval for the re-issuing of more than $20 million in FAME bonds, according to a release issued by the company, and the Penobscot Energy Recovery Co. in Orrington was started with FAME bonds, Stuart-Paul said.
Fiberight is looking to develop, construct, equip, maintain and operate a municipal waste processing facility in Hampden that would handle about 140,000 tons of waste per year, Norbert said.
“The facility will source municipal and commercial waste under a long-term contract with the Maine Municipal Review Committee,” he said. “The facility will process and convert this waste into recyclable plastics and metals and biogas for third party market and contract sales.”
Biogas is similar to natural gas.
Fiberight has asked for access to the Revenue Obligations Securities Program, which provides manufacturing and 501(c)(3) borrowers with state access to tax-exempt bond financing, the FAME website states. This program is ideally suited for a borrower who plans to arrange their own credit enhancement, which is the case with Fiberight, Norbert said.
FAME was established as Maine’s business finance agency in 1983 and is charged with supporting the startup, expansion and growth plans of Maine’s business community, according to its website.
The Maine Department of Environmental Protection in July 2016 approved permits for air emissions, solid waste processing, stormwater management and compliance with the Natural Resources Protection Act for the 144,000-square-foot processing plant and recycling facility planned for a 90-acre parcel between Ammo Industrial Park, Interstate 95 and Coldbrook Road in Hampden.
The following month, an appeal was filed in Kennebec County Superior Court by Penobscot Energy Recovery Co. in Orrington, along with its majority owner, USA Energy of Minnesota, and Exeter Agri-Energy, saying that the Maine DEP erred in issuing the permits for Fiberight’s proposed solid waste processing plant.
There were “serious deficiencies in the record” that include failures to demonstrate the technical and financial abilities to build the plant, according to PERC’s 10-page Petition for Review of Final Agency Action.
The Municipal Review Committee is a nonprofit organization that formed in 1991 to represent the garbage disposal interests of a group of towns that totals 187 communities. The towns send their trash to PERC, but the group’s leaders started looking for alternatives six years ago because they believe PERC will not be profitable after 2018 when a lucrative above-market contract for the electric power it generates expires.
The MRC, which has contracts to handle the post-2018 trash needs for more than 100 towns, and Fiberight entered a partnership to build the Hampden facility at the end of 2015. In September 2016, the MRC board voted to accept a $5.4 million buyout to exit a three-party partnership that owns the Penobscot Energy Recovery Co. facility in Orrington on March 31, 2018.
Jon Doyle, an Augusta attorney representing PERC and its partners, said Wednesday that his team will be at Monday’s hearing.
“We will be there,” Doyle said by phone. “We’ve done about a month’s worth of work in about a week” to prepare.
Doyle said he could not provide specifics about what his team will argue, but it will be against Fiberight’s request.
The MRC and Fiberight officials held a groundbreaking in October 2016 at the entrance to the site of the proposed solid waste processing and recycling facility on Coldbrook Road, even though their competition is suing the state over the permits needed to operate.
Doyle said oral arguments in the DEP’s permit appeal are scheduled for two weeks down the road.
Stuart-Paul said he believes the permits are rock solid, but he did express aggravation about having to “cool our heels waiting for the appeal process to complete.”
He said Fiberight is working on the project with Morristown, New Jersey-based Covanta Holding Corp., which operates more than 40 other waste-to-energy plants across the country, and an equity provider that he declined to list.
“The FAME bonds are conduit bonds that carry no credit support from the state,” Stuart-Paul said in an email. “What we are doing now is identifying the lowest cost debt available to the project amongst several alternatives. FAME bonds would give us access to tax free financing which potentially could save on interest costs.”