April 06, 2020

Indeck offers to start up power plant > Third party can decide price, letter says

The owners of the Jonesboro wood-fired generating plant notified Bangor Hydro-Electric Co. in a letter that they are willing to fire up the plant and defer to a third party to determine the price. Members of Washington County’s legislative delegation received a copy of the letter Saturday.

The loss of the main electrical transmission line into Washington County during last week’s ice storm set Bangor Hydro scrambling to find an alternative source of electric power for the three to six weeks it will take to rebuild the line that runs from Ellsworth to Cherryfield.

For more than a week, the electric utility and Indeck Maine Energy of Buffalo Grove, Ill., have been feuding over what Bangor Hydro has called “price gouging” by the company.

But in a letter to Robert Briggs, chairman of Bangor Hydro, dated Jan. 14, Indeck President Thomas Campone took a conciliatory stance.

“Clearly, while we may continue to disagree on a reasonable price for our power, we do not believe the citizens of Maine should be hurt by our disagreement. Accordingly, we propose if our power is needed, we make it available within 24 hours of hearing from you,” Campone said in the letter. “We would expect that Bangor Hydro would reimburse us for only our costs incurred, with no profit. Further, we agree that the actual payment to us will be determined later by a mutually agreeable independent third party,” he wrote.

Contacted Sunday evening, Bangor Hydro spokesman Bill Cohen said he would not comment on the letter because it had been addressed to Hydro’s president. Cohen said he would ask Briggs to respond, but Briggs had not returned a phone call late Sunday.

State Rep. Albion Goodwin, D-Pembroke, said he thought the Indeck proposal of asking a third party to decide on costs was “great.”

Albion’s district has been hard-hit by the power outage. Some people have been without power for up to 11 days. “I told the governor a week ago … because he had already declared an emergency, to take the plant, run it and … later determine what the actual cost should be and pay Indeck,” Goodwin said.

Power continued to be tenuous at best Sunday in areas of Washington County as residents reported there were surges and short outages. Many residents are apprehensive about turning on computers and other sensitive equipment.

“The biggest problem we have is this unstable power,” Goodwin said. “I finally got out of Bob Briggs that this instability is going to be with us until February 28th.”

State Sen. Vinton Cassidy, R-Calais, also reacted favorably to Indeck’s proposal of asking a third party to mediate about electricity price. “It sounds encouraging,” he said Sunday night of on Indeck’s letter to Bangor Hydro.

But Rep. Martha Bagley, D-Machias, said now that Bangor Hydro was up and running she was under the impression that the electric company had no need for additional power.

“I think it was too bad Indeck was brought into the picture because it got people’s hopes way up and the minute they heard there was no deal, hopes plummeted because they weren’t listening to Bangor Hydro saying … `We have alternatives,”‘ Bagley said.

The controversy over Hydro’s purchase of power from Indeck became public last week. On Saturday, Jan. 10, Hydro officials discovered that the ice storm took down 8 miles of its main transmission line between Ellsworth and Cherryfield. Shortly after that the company entered into negotiations with Indeck and its partner Ridgewood Power Corp. of Ridgewood, N.J.

The Jonesboro wood-fired plant was within a few hours of producing electricity Monday, Jan. 12, when Bangor Hydro and plant owners clashed over the price that Hydro would pay for the power.

Indeck officials said their final offer was to produce electricity at 4.1 cents a kilowatt-hour, which would just cover the cost of firing up a cold plant, purchasing the wood chips to feed the boilers and operating the plant. The current price that Bangor Hydro pays for electricity on the spot market is about 3 cents a kilowatt-hour. But Jonesboro plant owners said that price would not cover start-up of their plant.

Bangor Hydro charged Indeck was price gouging and decided to use an alternative plan to bring power to Washington County, drawing primarily on a number of generators that would be spread throughout the region. In addition, Hydro asked Attorney General Andrew Ketterer to investigate whether Indeck violated any state laws in its dealings with Hydro.

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