FORT FAIRFIELD — A local electricity plant will pay about 50 percent less in property taxes as part of an agreement to keep the plant operating and most of its employees working for three years.
However, the compromise deal, signed earlier this week, is better than the alternative of shutting down the plant that pumps about $10 million into the local economy, according to local officials.
Fairfield Energy Venture Ltd. will pay about $400,000 less in property taxes and be charged less for municipal services, according to an agreement between the town of Fort Fairfield and Central Maine Power Co. The agreement was approved by the Public Utilities Commission on Wednesday.
CMP, which buys the electricity from the Fort Fairfield plant, proposed buying out its contract with the plant and shutting the facility down on Oct. 1 in order to save $35 million for its customers. Maine’s largest utility said the 33 megawatts of power purchased from the plant was too expensive.
Besides the plant’s 40 or so employees, about 100 wood-chip haulers and other fuel providers would lose income if the wood-fired plant closed.
When the initial plan was announced, Fort Fairfield rallied against it and hired consultants to help fight the closure.
Scott Seabury, Fort Fairfield’s town manager, said Thursday that the entire community will be re-evaluated in order to assure that all property is assessed fairly and equitably. Reduced municipal fees will be instituted during a three-year period, Seabury said.
“Given the alternative, this is a great deal for the town,” Seabury said.
The plan to buy out the Fairfield Energy contract is far from a done deal. The Finance Authority of Maine has to approve issuing $78 million in bonds to finance the buyout of the 6-year-old plant.
A FAME public hearing is scheduled for 7:30 p.m. Wednesday, Aug. 17, at the University of Maine at Presque Isle’s campus center.
If the plant’s operating costs can be lowered within six months, the agreement between the town and the utility company calls for CMP to continue operating the plant for three years. Besides taxes and services, the cost of the waste wood and wood chips used to fuel the plant also must be reduced.