Maine legislature passes bill allowing hydro dam owner Brookfield to work out shared-profit deal on electricity sales with East Millinocket paper mill owner Cate Street Capital; governor has 10 days to sign bill, which is aimed at restarting the mill

Debra Garcia

AUGUSTA, Maine , April 2, 2014 (Bangor Daily News) – The Legislature unanimously approved on Wednesday a bill that would allow electricity sales to re-energize an East Millinocket paper mill and restore at least 200 jobs.

LD 1792, An Act To Protect Jobs in the Forest Product Industry, garnered 143 votes. Eight legislators were absent. Gov. Paul LePage, who first publicly proposed the idea more than a month ago, has 10 days to sign the bill, said his spokeswoman, Adrienne Bennett. She wasn't sure when that would happen.

The bill's sponsor, Rep. Steve Stanley, D-Medway, and East Millinocket Administrative Assistant Shirley Tapley said they hoped the bill would restore the lost jobs quickly. Great Northern Paper Co. LLC stopped production on Jan. 23 and laid off 212 of 256 millworkers on Feb. 6.

Legislators handled the bill "exactly the way we needed it handled in this town. They have done an excellent job," Tapley said Wednesday. "They pushed it through quickly. I think they are doing everything that they can to get this mill running and people back to work."

The bill would lift a state law enacted in 2002 that limits conditions under which hydroelectric dam owner Brookfield Asset Management can sell electricity to the wholesale market. Under the present law, Brookfield must sell all of the electricity generated by its three Penobscot River dams to the mill while it is operating, but it can sell electricity wholesale when the mill is in temporary or partial shutdown, officials have said.

The new law would permit Brookfield to sell electricity to the market at all times and negotiate a shared profit with mill parent company Cate Street Capital "as long as there is no reduction in labor force associated with the cessation or reduction of paper production," the bill states.

"I think this is good. Now it puts the ball in Brookfield's and Cate Street's court," Stanley said. "Now they have to get together and do something. It will be bad PR [public relations] for either of them if they didn't do it. There is a lot at stake here. Now it is up to them."

Brookfield attorney Harold Pachios said that the bill's passage "does nothing."

"The bill alters the current law in only one respect. It removes a single prohibition. That prohibition prohibits the mill from shutting down for more than three months and laying off workers and going into the electricity business," said Pachios. "That's the only thing the bill does. It is not necessary, but we have no problem with it."

"We have made an offer to help them. We don't have to help them, but we want to, and they say it is not enough," Pachios added.

Cate Street spokesman Scott Tranchemontagne described the negotiations as "ongoing towards an agreement that is fair and equitable for all parties." He thanked legislators in a statement released Wednesday night but did not say when or whether the mill would reopen.

The bill's passage "sends a very strong message that lawmakers from across Maine support preserving jobs and stimulating the Katahdin region's economy. As we have said consistently, the bill's approval is a critical component in GNP's multi-point plan to restructure its operations and restart under a scenario that allows the mill to remain viable over time," Tranchemontagne said.

"We are a step closer today, but work remains to be done," he added. "There are still elements of the restructuring plan that need to be resolved, and we continue to make progress on each."

Pachios described earlier versions of the bill, which was amended, as unconstitutional because they would have forced Brookfield to enter into an agreement with Cate Street.

He said Brookfield has helped Cate Street to restart the mill with a 10-year power supply contract that Cate Street signed with Brookfield on Aug. 30, 2011, guaranteeing the mill very generous power rates originally set in 2001 during high-cost times such as winter.

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