Maine’s Industrial Grant Program

$8.9 million to transition companies to clean-energy use, creating 950 jobs

By Ramona du Houx

March 21st, 2010 

Verso Paper Corp. in Bucksport employs 1,300 workers. According to Bill Cohen, Verso’s spokesman, the $2 million grant will help them become more energy efficient and competitive in the global economy  {photo by du Houx)
Verso Paper Corp. in Bucksport employs 1,300 workers. According to Bill Cohen, Verso’s spokesman, the $2 million grant will help them become more energy efficient and competitive in the global economy {photo by du Houx)
Business has realized, “going green” leads to increased revenues. It’s simple, in Maine the two largest expenses for businesses are the cost of heat and electricity. If you lower these expenses, you have more money to reinvest in your business.

That energy transformation requires funding. For 16 projects, investments from Maine’s Industrial Grant Program will jumpstart their energy-efficient plans. A total of $8.9 million in grants from this program were awarded to projects across the state in January.

“The 16 projects are ready go. These grants put people to work, reduce pollution, increase job security, and help our own national security by generating our own energy, rather than importing from foreign sources,” said Governor John Baldacci. “But even more importantly, they will help to create and protect Maine jobs for years to come.”

The grants saved 45 to 50 Maine jobs from being outsourced.

“We had 45 to 50 highly skilled textile manufacturing jobs that were slated to go offshore to the Far East, to facilities that were more competitive than what we have in Maine. With this project, those jobs are staying in Maine. We’re beyond excitement to keep those jobs here. We have people standing by with shovels in hand. Within four months will be up and running. Now, we can keep working,” said John Stankiewicz, chief operating officer of Tex Tech Industries.

The business, which specializes in tennis felt, ballistic material for soft body-armor, and thermal and acoustic aerospace insulation, was awarded a grant worth $746,776 to convert a 1963 oil burner to a biomass electrical generation system fueled by Maine woodchips.

“After the conversion, our energy dollars will be spent in the state buying woodchips instead of going to overseas oil companies,” said Stankiewicz.

The $8.9 million in grants will leverage more than $81 million in private investments, which, according to the U.S. Department of Energy’s method of calculating job creation, will create over 950 jobs. The companies awarded grants already employ approximately 7,000 workers in the state.

Verso Paper Corp. in Bucksport employs 1,300 workers. According to Bill Cohen, Verso’s spokesman, the $2 million grant will help them become more energy efficient and competitive in the global economy.

“A year ago the governor hosted our CEO, and we all talked about the future of our industry. Verso was given a path to follow. Our partnership with the state of Maine will allow us to move the Bucksport green-energy project one step closer to reality,” said Cohen. “We are very grateful for the support from the governor, the Legislature, and the public Utilities Commission. A lot of good projects only get done with help.”

The mill, which can produce 200 megawatts, relied on a nearly 30-year-old, multiuse boiler. That will be upgraded into a more efficient cogeneration unit that conserves steam energy to power paper production and turbines.

“The grant will create construction jobs, maintain mill jobs, and increase the green-energy power available in Maine,” added Cohen.

The Maine Renewable Energy Consortium (MERC) received $1 million. MREC is working on plans to build an eco-park in South Portland that would be powered by the development of a 15 megawatt facility run on wood biomass. MERC also received a Maine Technology Institute development seed grant and is a certified Pine Tree Zone, which gives them tax incentives offered by the state.

The first phase of the $40 million project is estimated to cost up to $27 million and would convert wood to electricity, steam and water. Some of the power would be sold to Hannaford Brothers’ distribution center and Portland Shellfish.

“We would be the anchor in the eco-park. Eventually we would sell the electricity to other adjacent industrial parks. The beneficial ripple effect for businesses and job growth could be tremendous,” said Jim Damicis of MERC. “With Hannaford’s changing to our systems, they’ll save in operating costs, which could have a direct impact for costumers.”

The companies combined will reduce 42 million kilowatt hours of electricity used.

The Industrial Grant Program funds come from a combination of two sources: the federal Recovery Act and the Regional Greenhouse Gas Initiative (RGGI) funds distributed by the Energy and Carbon Savings Trust. Projects were selected based on how well they added value to the Maine economy, saved energy, and reduced greenhouse-gas emissions.

“Reducing our carbon emissions and our environmental footprint is the driving force behind both the RGGI and the energy programs funded by the Recovery Act. These programs will eliminate 200,000 tons of carbon dioxide gas per year — the equivalent of taking 32,000 cars of the road,” said Public Utilities Commission Chair Sharon Reishus, of the agency that administered the grant. “Maine’s industrial sector presents great opportunities for energy savings, emissions reductions, and economic stimulus. We are pleased to support projects that show exceptional promise in meeting these objectives.”

About $6 million of the grant money came from the $36 million promised to Maine under the American Reinvestment and Recovery Act. The remaining $2.9 million came from earnings from the RGGI carbon-credit auctions.

David Littell, commissioner of the Maine Department of Environmental Protection and chair of the RGGI board of directors, said, “With six successful auctions, more than 100 bidders, and $494 million for green-energy and green jobs — RGGI is showing that cap-and-trade works.”

In all, Maine has earned a total of more than $15.2 million since the first auction in September of 2008. RGGI is the first program in the nation that requires all industrial carbon dioxide emitters in the states that opt in to pay for what they emit.

RGGI works to reduce carbon dioxide emissions in two ways:
First it places a cap on the total amount of carbon dioxide RGGI power plants can collectively emit and requires those power plants to purchase allowances from RGGI for their emissions. This provides an incentive to reduce emissions. Secondly, it issues a set number of allowances to the ten participating RGGI states; those states in turn can sell the allowances at quarterly auctions. In Maine, the proceeds are used to reduce greenhouse gas emissions by funding projects that save both energy and money.

“Energy efficiency is one of Maine’s greatest and most affordable untapped energy resources. These grants demonstrate that the RGGI can make real-world progress in lowering energy costs, reducing pollution, and strengthening Maine businesses all at the same time,” said Dylan Voorhees, energy project director for the Natural Resources Council of Maine.

Last year, the Legislature passed the governor’s comprehensive energy package, An Act Regarding Maine’s Energy Future, which established the goal to weatherize all residences and 50 percent of businesses by 2030 and reduce the state’s consumption of liquid fossil fuels by at least 30 percent by 2030.

“Maine is leading the way toward a new energy future,” said Baldacci. “Our success is built on innovative leadership and the public-private partnerships. We have been able to use scarce resources to leverage significant investments in energy efficiency and conservation. It’s important for all our futures to provide opportunities in renewable energy to families and businesses.”

Company/Applicant, Town, Efficiency Maine Large Industrial Grant Amount
Verso Paper Corp., Bucksport, $2,000,000
Fraser Paper, Madawaska, $198,240
NewPage, Rumford, $300,000
Katahdin Paper Company, Millinocket, $235,200
Fairchild Semiconductor, South Portland, $537,000
Madison Paper, Madison, $357,000
Maine Renewable Energy Consortium, South Portland, $1,000,000
Fraser Paper (GHG), Madawaska, $393,008
Jackson Laboratory, Bar Harbor, $1,000,000
Prime Tanning Company, Hartland, $667,500
Bowdoin College, Brunswick, $400,000
Old Town Fuel and Fiber, Old Town, $377,000
Lincoln Paper and Tissue, Lincoln, $375,000
Johnson Outdoors Watercraft, Inc, Old Town, $113,000
Tex Tech Industries, Monmouth, $746,776
Fraser Timber, Ashland, $227,500
Total $8,927,224