ELLSWORTH — The city of Brewer will be the first of 187 Municipal Review Committee members to decide in 2016 where they want to haul their trash.
The City Council is set to vote on the matter Jan. 12, pending completion of a legal review of the contract.
“I am assuming if we have the documents in place we will vote,” said Karen Fussell, finance director and treasurer. “The City Council has been very receptive to the Municipal Review Committee plan thus far.”
The Municipal Review Committee includes all of Hancock County other than Ellsworth, Eastbrook and Deer Isle, as well as communities in several other counties.
One by one, whether by town meeting or the action of elected local officials, communities will be asked to endorse a proposal to build a new $80-million plant in Hampden.
The plant is intended to convert refuse to biogas and then natural gas. It would be built and operated by Maryland-based Fiberight on land owned by the Municipal Review Committee.
At the same time, the current waste disposal site — the Penobscot Energy Recovery Center in Orrington — is working hard to keep the communities on board.
Penobscot Energy converts refuse into electricity.
At issue is the price paid by Emera Maine for electricity. Penobscot Energy until 2018 is being paid higher than market rates for the electricity it generates.
The benefits from that federally mandated rate have been passed along to members.
The Municipal Review Committee maintains Penobscot Energy cannot offer manageable tipping fees — what communities pay per ton to dispose of their refuse — post-2018, when the federal mandate expires.
Penobscot Energy, however, has countered with a plan of its own that it says offers more stability to towns and cities.
If endorsed by members, the proposed plant in Hampden is scheduled to be operational in 2018.
A small group of Municipal Review Committee towns asked for an independent legal review of the three related contracts. The review is expected to be concluded by year’s end.
The Municipal Review Committee was hoping to have all votes in by May, but said there is leeway for municipalities with town meeting dates scheduled later in the year.
The committee is providing financial incentives and penalties for communities that sign up on time, or delay their vote while waiting to see how the new plant operates.
“The reason for the May 2016 date is that it supports timing the effort to achieve financial close early enough to keep the construction schedule on track,” said Greg Lounder, executive director of the Municipal Review Committee.
The majority owner of the Penobscot Energy Recovery Center, USA Energy Group in Minnesota, is campaigning to keep the Municipal Review Committee members in Orrington.
Penobscot Energy is offering a tipping fee of $89.57 per ton for a 10-year agreement and $84.36 per ton for a 15-year agreement. The current tipping fee is $79.57 per ton.
USA Energy said it would not penalize the municipalities if they did not deliver a set amount of refuse as it has in the past.
Penobscot Energy also will offer a new pay-as-you-throw program administered by WasteZero to encourage recycling.
Penobscot Energy said a municipality could cover its waste disposal costs by selling 30-gallon garbage bags to residents at $2 per bag.
USA Energy announced formation of a new entity, Maine Waste Processing LLC, to coordinate contracts between Penobscot Energy, WasteZero, Casella Waste Systems and Agri-Energy, which converts food and animal waste into energy.
“We are offering them long-term agreements with programs that have a proven record of success,” said Kevin Tritz, president of the new Maine Waste Processing.
Bob Knudsen, vice president of operations for USA Energy, said including a recycling component is a necessity.
“That is the world of the future,” he said. “Right now recycling is costing small communities money. That’s not the idea or the intent.”
The Municipal Review Committee announced at its annual meeting Dec. 16 that it has entered into a 15-year agreement with Covanta Energy Corp. to construct and operate the 90,000-square-foot plant.
Covanta owns and operates more than 40 waste-to-energy facilities.
Bar Harbor Public Works Director Chip Reeves, who is president of the Municipal Review Committee Board, said Covanta’s equity investment resolves some doubts raised about Fiberight’s viability.
Officials in Orrington, where the Penobscot Energy plant is located, have said they were worried about Fiberight’s limited experience with the new technology.
Fiberight is currently operating one demonstration plant in Lawrenceville, Va., that is much smaller than the planned facility in Hampden.
Reeves said the Municipal Review Committee must guarantee 150,000 tons of refuse in order to make the new plant workable.
Municipal Review Committee members now truck about 180,000 tons per year to Orrington.
“Fiberight and Covanta won’t close on financing until we get 150,000 tons worth of members signed up,” Reeves said.
He said the Municipal Review Committee already has factored in the likelihood that communities might not sign on with the new plant simply because of the added distance of trucking their refuse to Hampden instead of Orrington.
“We’ve been using Mars Hill as an example,” Reeves said. “The reality is driving a couple of hours up the road is going to be much more economically beneficial to them than going to Hampden.”
He said the Municipal Review Committee proposal is sound, places members in an advantageous landlord situation and secures members’ waste disposal plans for the future.
Should the needed tonnage drop off, he said, the proposal includes a reserve fund that functions like a group insurance policy to cover any shortfall.