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How Negotiations Failed To Save The Berlin Biomass Plant
All but one of six small, wood-fired biomass plants were willing to make a deal that Cate Street Capital says would have allowed it to go ahead with the Berlin biomass plant.
A small biomass plant in Whitefield was responsible for a breakdown in negotiations that led the backers of a proposed biomass plant in Berlin to declare the project dead, says Sen. John Gallus, of Berlin.
The Burgess BioPower plant was expected to bring jobs and an economic boost to Berlin and the North Country.
But on June 30th Scott Tranchemontagne, a spokesman for Cate Street Capital – the backers of the project - said the project was dead.
The reason was that the deadline for negotiations had passed, he said.
The negotiations were triggered by an order issued in April by the Public Utilities Commission. That decision gave conditional approval to a 20-year contract between Public Service of New Hampshire and a proposed biomass plant in Berlin.
But Clifton Below, one of the three PUC commissioners, dissented. In essence Below agreed with an argument made by the six, small wood-fired biomass plants that opposed the contract.
The six plants contended that the state’s program for renewable energy credits did not extend beyond 2025. The credits were an important part of the 20-year contract which went beyond 2025.
Below’s concurrence suggested the wood-fired plants might have a good chance of winning should they choose to push their case before the Supreme Court.
Such a case could take a year to resolve and that could make the Berlin biomass plant more costly if not impractical.
To try to avoid such an appeal the negotiations were held by PUC.
The goal was to give the wood-fired plants something that would keep them from pursuing a case before the Supreme Court, said Sen. John Gallus, of Berlin, who participated.
The goal was a win-win that would allow the Berlin project to go ahead, keep the small plants operating and secure much-needed jobs, Gallus said.
There were six, small wood-fired plants involved. They were in Bridgewater, Bethlehem, Tamworth, Springfield, Whitefield and Alexandria.
Bethlehem and Tamworth are owned by a French company (http://www.gdfsuez.com/en/institutional/). The Whitefield and Springfield plants are owned by a South Korean firm (http://www.ewp.co.kr/eng/index.asp).
“We were seeking short-term deals because our businesses aren’t viable in the current market,” said Michael O’Leary, the general manager of the Bridgewater plant.
The deal that evolved would have PSNH buying electricity from each of the wood-fired plants for 20 months.
But one plant held out.
“The only guy that couldn’t seem to agree was the Whitefield people,” said Gallus.
Whitefield already had a contract to provide electricity to another company.
Tranchemontagne said things got more complicated because the Whitefield and Alexandria plants wanted payments amounting to millions of dollars.
Paul Young, a spokesman for the Whitefield plant, said no such request was made.
An official at Indeck Energy Services, which owns the Alexandria plant, could not immediately be reached for comment.
Meanwhile, Cate Street had set a deadline.
“The drop-dead date was going to be June 30th because of their requirements to get stuff going,” said Gallus.
That date passed and Cate Street declared the project was dead.
Young said Cate Street has been trying to vilify the wood-fired plants and they were willing to continue negotiations. He said the plants entered the negotiations in good faith and were disappointed at the outcome.
Bridgewater’s O’Leary said he hopes something can still be worked out.
“As far as our facility we stand willing, ready and able to negotiate at any time and hope that our deal is still on the table because we think it makes sense for the state, it makes sense for our facility and it makes sense for the forest products industry.”
But Cate Street’s Tranchemontagne said no new negotiations are planned.