PORTLAND, Maine — A state-subsidized biomass firm plans to repay the subsidy money it has received through a logging industry bailout effort until it can prove economic benefit to Maine.

Regulators on Tuesday approved letting wood-to-energy firm Stored Solar rework its part of a $13.4 million bailout with the state, a request the company made three months into the two-year contract and as problems emerged at its Jonesboro plant.

A boiler leak and wood supply issues contributed to the temporary closure in Jonesboro. The company said it is using the down time to analyze its operations. Spokesman Dan Cashman said the company has retained its employees during the shutdown.

[ Subsidized Jonesboro biomass plant spent days offline in March]

Under the amendment approved Tuesday, the company would return subsidy money it’s already received for output in Jonesboro and another plant in West Enfield. In exchange, it would recover its security deposit required to qualify for the monthly payouts.

In effect, the arrangement will return to Stored Solar about $731,000. It had put up about $1.2 million in a cash deposit, against about $426,000 in subsidy payments received through March.

Instead, Stored Solar now hopes to collect its subsidy payment at the end of the year, after it gives proof to regulators of economic benefits, such as jobs, local wood purchasing and $2.5 million in capital investment. At the outset, regulators expected the company to receive as much as $6.7 million over the two-year contract.

Commissioners on Tuesday expressed reluctance to amend the terms of such a contract, but noted that the Legislature handed them an uncommon economic development role by passing the biomass bailout into law.

“The legislation’s requirements on economic development challenged the commission’s traditional jurisdictional boundaries,” Commissioner Carlisle McLean said before ruling Tuesday.

Stored Solar pushed for the contract change as it faced allegations from a logging trade group that some of its members were not being paid for deliveries to the Jonesboro plant. Stored Solar called the issue an “invoicing dispute.”

Commissioners on Tuesday discussed the allegations and reports, but said they could not consider the payment issues in their decision because no loggers came forward to complain as part of the case. The Professional Logging Contractors of Maine did not identify individual logging companies affected.

“The commission does not operate on hearsay and innuendo,” Commission Chairman Mark Vannoy said Tuesday. “This has to be based on evidence in the record.”

The move will free up cash for the company, something that its principals and Gov. Paul LePage said stands to increase the chance of long-term success for the company whose vision extends far beyond the plants in West Enfield and Jonesboro.

The company has in the works a plan to build multiple “bioenergy parks” throughout the state, which would pair other businesses with biomass plants to increase their efficiency. For instance, Stored Solar has a letter of intent for a greenhouse that could operate next to its West Enfield plant. The greenhouse could buy the waste heat from the biomass process.

That increase in efficiency could also allow the company to qualify for selling renewable energy credits to southern New England markets, where those types of credits sell for more.

The company is also pushing a plan to build a $240 million biorefinery in East Millinocket, using private investment and a loan backed by the U.S. Department of Energy. The company has called that facility the “cornerstone” of its larger biomass plan.

[ Developers eye East Millinocket as heart of $240 million biomass venture]

PUC Commissioner Bruce Williamson noted that the subsidy deal in West Enfield and Jonesboro is a cornerstone of the company’s larger vision.

“The company’s grander [economic] development plan beyond the immediate biomass for energy contract rests on obtaining grants and aid from various agencies, but fundamentally for Stored Solar, the contract with the state is the cornerstone of this grander scheme,” Williamson said.

[ Could biofuel save Maine’s timber industry?]

The company has demurred at calling the taxpayer dollars it is due to receive to prop up its West Enfield and Jonesboro biomass plants a “subsidy,” instead calling it an “on-ramp” for developing a broader economy built around Maine wood fiber.

“[The amended contract] is destined to be the on-ramp for the creation of the right ecosystem for a long term improved biomass economy,” said Kevin Crossman, Stored Solar’s chief operating officer, in a prepared statement.

Crossman also praised Gov. Paul LePage’s support, calling him a “visionary governor who wants to make the Pine Tree State the epicenter of bioeconomy.”

LePage wrote to commissioners last month asking whether they could change rules for the biomass bailout in a way that would reduce the security deposit requirement while still protecting taxpayer money.

After being amended, the new contract will come back to the PUC for final approval.

Darren Fishell

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.