Proud of MRC proposal

By Chip Reeves
and Greg Lounder

In Bob Knudsen’s recent OpEd (“Don’t trash PERC until you compare proposals”), he states, “the MRC is now trying to steer the towns it represents into a speculative venture in which it has a vested interest.” Nothing could be further from the truth.

Formed by communities in 1991 to oversee the performance of the Penobscot Energy Recovery Co. facility in Orrington, the Municipal Review Committee has spent 25 years watching out for the interests of communities that take waste to PERC. The MRC, governed by a volunteer board of directors elected by its membership, consists entirely of municipalities and municipal regional associations. Our “vested interest” in the Fiberight project is the interest of our members. MRC itself has no financial stake in the outcome. Its sole mission is to seek the most affordable, long-term and environmentally sound solution for waste disposal for the 187 communities it serves.

In 2018, the power purchase agreement (PPA) between PERC and Emera will expire, as will the PERC partnership agreement. The PPA, under which Emera ratepayers subsidize PERC operations by buying electricity at above-market rates, will not be renewed or extended. PERC’s revenues will plunge.

In 2010, seeing these financial realities, the MRC board of directors began working on post-2018 trash disposal options in earnest. At first, the board attempted to extend the existing arrangements in ways that would allow members to continue to utilize PERC. It became clear that PERC could not support continued operations as usual without the PPA. Along with the loss of 40 percent of its revenue when the PPA expires, PERC also faces the reality that communities are reducing the amount of waste needing disposal to the point where the plant cannot operate effectively. PERC now imports approximately 60,000 tons of out-of-state waste annually to provide adequate tonnage to feed the plant. These arrangements are not sustainable.

In 2011, after the PERC private partners informed MRC that PERC operations post-2018 could not continue at tonnage levels and tip fees that would meet MRC membership needs, MRC stepped up its search for alternatives to provide long-term, affordable waste disposal for its membership. MRC solicited and vetted 15 proposals. MRC selected Fiberight because it offered the highest and best use of incoming waste, combined several proven technologies, was sized for the membership’s needs, and would not take waste generated outside Maine.

Simply stated, Fiberight would provide more recycling and waste conversion at less cost than any other option.

Fiberight’s technology was examined by MRC’s independent consultant, peer reviewed by the University of Maine and further scrutinized by Covanta, one of the nation’s largest waste-to-energy companies. Covanta has endorsed the project by agreeing to operate and provide upwards of $80 million in financing for the construction of the proposed Fiberight facility in Hampden. To mitigate risks, the MRC executed a contract with Waste Management for bridge landfill capacity (if Fiberight opens late) and bypass (if Fiberight operations are interrupted after they start). Neither the Fiberight project nor the MRC’s contingency plans are “speculative ventures.”

The MRC has spent thousands of hours working to develop and understand Fiberight, PERC and other options and communicating with our members. We welcomed feedback from membership and an independent legal review of the draft contracts. We consulted the membership to ensure the MRC’s agreements are well written and protect the members.

MRC is offering its membership a tip fee that is $15 per ton less than what PERC has offered and claims it can sustain. MRC’s contract limits rate increases to annual adjustments for inflation and includes a rebate structure to share revenue with the communities.

MRC has examined the financial and operational assumptions underlying PERC’s proposal. From the data we have, which are substantial, PERC’s analysis does not hold up to review.

The MRC board understands that change is difficult and towns avoid risks. The 187 municipalities that send waste to PERC face the reality that business as usual cannot continue. MRC has worked tirelessly, with its membership’s interest in mind, to craft a solution that fully embraces the state’s solid waste hierarchy of reduce, reuse, recycle, utilize, and then landfill, and maintains municipal oversight to ensure contract and regulatory compliance as well as that the collective membership’s needs are being met.

We are proud of our proposal. We seek your support.

Chip Reeves is president of the MRC Board of Directors and director of public works for the town of Bar Harbor. Greg Lounder is the MRC’s executive director. They wrote this piece on behalf of the MRC Executive Committee.