Lawmakers Approve Bailout of Biomass Companies

Apr 15, 2016

As the legislative session moves closer to adjournment, lawmakers have voted on a measure to use expected surplus dollars to subsidize power generating facilities that use biomass for fuel. For some, the issue boils down to saving jobs in an industry that’s facing hard times.

Generating electricity by burning wood and other biomass is more expensive than using natural gas, hydropower dams or even oil, at current prices. Thousands of workers in the logging industry have been hard hit by the closure of paper mills, declining demand for wood and the expected closure of two of the state’s six biomass electric plants.

Sen. Dawn Hill, a Democrat from Cape Neddick, serves on the Legislature’s Energy, Utilities and Technology Committee, which crafted the compromise bill.

“We in the Legislature get the option of giving people hope all the time,” she says. “Sometimes we don’t quite achieve it enough. But here is a chance to really do it. They are not asking for a handout, they are asking for a hand up.”

The measure would provide a subsidy to the biomass plants so they can continue to operate even though the cost of the electricity they generate is above market prices.

Some supporters see the measure as a temporary bridge to help the industry through the next two years, and argue that the Public Utilities Commission will have the authority to gauge whether the subsidy results in overall positive benefits for Maine. If not, it can choose not to pay.

But Sen. Garrett Mason, a Republican from Lisbon Falls, is not convinced.

“I don’t believe that this bill is going to help,” he says. “For me the case was not made that this will truly be what it is advertised: a bridge.”

Sen. David Miramant, a Democrat from Camden, argued against the bill as a type of corporate welfare that would not help wood-based industries in his part of the state.

“Certainly not going to help the ones along the coast that I represent,” he says. “So I would urge you not support this subsidy for big business and I am not going to.”

But Sen. Rodney Whittemore, a Republican from Skowhegan, says the subsidy is not much of a price to pay to help people that want to work and are currently working in the woods.

“We’re having a hard time spending — relatively speaking — a small amount of money compared to the amount of money we give to welfare to people, many of whom aren’t willing to work,” he says. “These people are very hard workers and they need a little help, so let’s do that.”

Supporters argued the long-term economic effect of the facilities closing will significantly hurt state revenues.

The Senate voted for the measure 25-9, with the House supporting the bill 104-40.

The bill needs final passage with two-thirds vote so the $13.4 million can be allocated July 1. Without that emergency provision the money would lapse into the state’s so-called rainy day fund.

Gov. Paul LePage has ten days to decide whether to sign the bill, let it become law without his signature or veto the measure.