Hampden trash-to-energy plant to get $45 million in tax-free financing

April 11—AUGUSTA, Maine — The Finance Authority of Maine has agreed to back a future waste-to-energy plant in Hampden by providing access to $45 million in tax-exempt bond money.

Maryland-based Fiberight LLC asked FAME for the bond to help construct and operate a $69 million project in Hampden and to get the best interest rate, according to CEO Craig Stuart-Paul. The bonds are treated as government securities and are tax exempt under federal law.

"This is another milestone," Stuart-Paul said Monday by phone. "We're thrilled about it, and we're full speed ahead."

Once constructed, the 144,000-square-foot plant will convert trash from more than 115 communities into biogas, a fuel made from fermented from organic materials. The expected opening date is early 2018.

[ MORE: The long history of lobbying behind Maine's trash fight]

A public hearing about Fiberight's application was held in February. The group's proposed garbage-to-energy facility will feature technology from Fiberight that reuses organic materials in trash to make biofuels after the glass, metals, papers and plastics are removed to be sold on the commodities market. The group also plans to use the fibrous material left over from the distilling process to make fuel pellets that can be used for heating. Biofuels are similar to natural gas.

Over the first 15 years of operations, the plant is expected to reduce costs by an estimated $24 million for communities that send trash there, as well as reduce the amount of waste buried in landfills and increase recycling, the FAME board findings show.

"[An estimated] 300,000 tons will be recovered that are not currently being recycled, but are being burned or placed in landfills by PERC," the announcement states.

The 115 towns send their trash to Penobscot Energy Recovery Co. in Orrington, but the group's leaders started looking for disposal alternatives about six years ago because they believe PERC would not be profitable after 2018, when a lucrative above-market contract for the electric power it generates expires.

The MRC and Fiberight entered a partnership to build the Hampden facility at the end of 2015. 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, and officials held a groundbreaking on the Coldbrook Road in October 2016.

Competitor PERC, along with its majority owner, USA Energy of Minnesota, and Exeter Agri-Energy filed an appeal to Fiberight's DEP permit in Kennebec County Superior Court in August 2016, but Superior Court Justice Michaela Murphy denied that appeal in mid-March.

"The time for PERC … to file an appeal to the state Supreme Court expired on Wednesday, so our permits are now final," Stuart-Paul said in a late Friday email.

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