Hampden waste plant deal expected to close in early June

HAMPDEN — If all goes as planned, employees could start returning to work at the shuttered waste processing facility in Hampden as soon as Monday, June 14, said Robert Van Naarden, CEO of Delta Thermo Energy (DTE), at an online meeting of the Municipal Review Committee (MRC) on Wednesday morning.

Van Naarden said he hopes to have the plant accepting full loads of waste and recycling from all 115 member towns within nine months after the company closes on the deal. It is expected to close in early June.

“We have done a significant amount of due diligence on the facility,” said Van Naarden, “to understand what we were buying … I think we have a very good understanding.”

Michael Carroll, the MRC’s executive director, said there would be no increase in tipping fees and that, as part of the deal, the MRC will be reimbursed for principal and interest on a $1.5 million loan it extended to Coastal Resources of Maine (CRM), costs it incurred due to “CRM defaults” as well as costs associated with the transaction and bypassing of waste. 

The MRC has had “significant expense” over the last year for legal costs and maintenance of the plant, said Carroll. As of Jan. 1, 2021, it was owed $212,983 for interest and other related costs for the loan, according to financial statements posted on the MRC website.

“As part of our negotiation we’ve negotiated reimbursement for all our transactions,” Carroll said.

The committee expects to have “fundamental matter” notices sent to member towns this week. Under the nonprofit’s bylaws, member towns have 30 days from the date of receiving the notice to call for a special meeting and 45 days to hold a vote on any “fundamental change” such as buying or selling assets valued over $100,000 or certain amendments to the Master Waste Supply Agreement. Votes are weighted (members get one vote for every 100 tons of waste delivered).

There are several “fundamental matters” that member towns will be notified about this week, said Carroll, including a change to rebates, a reset of the clock on the current Master Waste Supply and lease agreements (both are about a year and a half in), and an option for Delta Thermo to purchase the land the plant sits on. 

“In the current lease agreement, the MRC land could be purchased at the end of the initial term by CRM if MRC decided not to extend the term,” said Carroll. “DTE would like to see that opportunity come sooner… To obtain financing DTE needs to show the lender a path to land ownership.”

Carroll assured listeners that “The land sale would not happen until DTE shows long term reliability, stable operations of the Hampden facility without bypass for 9 consecutive months… the sale of the land would not happen for some time and DTE is not required to purchase it but would have the option to do so.”

Even if more than 50 percent of the MRC towns object to the fundamental matters, said Carroll, that “doesn’t mean the facility won’t get sold.” Although the MRC owns the land, the actual plant and the equipment inside it is owned by CRM, which means “it’s not our facility to sell,” Carroll explained.

The building and its contents are pledged as collateral for repayment of CRM’s loans to a group of bondholders (represented by a trustee) who are owed roughly $52 million, said Karen Fussell, board president.

Fussell pointed out that while Carroll was correct, “A large portion of the value of the plant is the Master Waste Supply Agreement,” so “they do go hand-in-hand to some extent.” (The MRC also holds all the municipal waste contracts and is the permittee for all the Maine Department of Environmental Protection waste processing permits.) 

Staff from Delta Thermo Energy have started interviewing former employees of the plant, which is projected to employ 42 full-time workers once it is fully operational, said Van Naarden. “We think we know what we need to do on day one to get in there and make this thing work.”

In response to a question about which communities would be the first to bring their waste to the plant once it’s up and running, Carroll noted that member towns are “tiered” and that the MRC is aware of which towns are landfilling, and that those would be prioritized. “We have that information all at hand,” he said.

Webinar audience members raised a number of questions about the plant’s financing and sale, Delta Thermo’s operations elsewhere, whether its employees would be unionized and its future plans for the Hampden plant, which has not been taking waste for nearly a year.

A number of questions were raised about sewage sludge, with one audience member asking for a “definitive statement” that the MRC would never allow the facility to accept sewage sludge. In a town hall meeting, according to a document on the MRC website, Van Naarden made reference to barges that were looking for places to bring sludge from New York City, and said, “We eliminate that need.” That raised concerns among some that the company eventually planned to bring sludge, which is particularly difficult to dispose of due to its contamination with “forever” chemicals, per- and poly-fluoroalkyl substances (PFAS).

Fussell and Van Naarden did not make any definitive statements on sludge disposal in the future, but said the facility is not permitted for that now and any future plans would require permits and a lengthy DEP process that would involve public input.

“We are not bringing in any sewage sludge into that facility to get this place running,” said Van Naarden. “That requires new permits. We’ll work on that later. That’s not my focus. We are not bringing any sewage sludge in.”

Fussell said that sludge disposal is “a question for the future and more ultimately a question for the state. Should this be something that’s desirable to pursue in the future it will need to go through a full environmental review and analysis.” She added that she would be “thrilled” if Delta Thermo could come up with a way to handle sludge and “assist the state. I don’t think it’s the place for MRC to say definitively that something will never happen.” 

Regarding unions, Van Naarden said that while he has “nothing against” them, he prefers to be “non-union.”

Delta Thermo has one plant currently operating in the United States, said Van Naarden, a facility in Pennsylvania. He declined to divulge the amount of waste handled at that plant. He said the company is in negotiations to open a plant in New York; it came close in Allentown, Pa., which first approved plans for a Delta Thermo facility in March 2012 but terminated its agreement with the company in 2014. 

In a letter explaining the decision on the city’s website, City Solicitor Jerry Snyder said the company had “consistently failed to advance plans for the project and clearly cannot meet the deadline for final project operation. Under the circumstances the city has no reasonable alternative than to declare the agreement terminated.”

Van Naarden was confident Wednesday that the company’s financial backing “will cover both acquisition and operations. In fact, it’s much more than that.” Once it’s up and running, he said they will “apply for and try to access grants, rebates, opportunity zone stuff” and other programs, but that “we don’t need any more financing.”

The company also had a plant operating in New Jersey for three years that was recently disassembled and moved. The building it was in was in disrepair and had to be torn down. “They’re rebuilding it and then we’ll go back in,” said Van Naarden.

The technology used in the plant currently operating in Pennsylvania is, however, “nothing like the one in Hampden,” said Van Naarden. “There’s no way to compare it.”

The plant in Pennsylvania uses trademarked DTE Hydrothermal Decomposition technology, which converts municipal solid waste and sludge into Engineered Pulverized Fuel that can be burned to produce steam for electricity generation. Adding technology or techniques to the Hampden plant would require DEP approval.

A question also arose on Wednesday about the “possible misrepresentation of some of DTE’S associations/partnerships.” Fussell replied that “I would say we have no comment. I don’t know what you’re talking about, without more clarification we’ll move on.”

Two members listed as part of Delta Thermo’s Technological Advisory Board, Nickolas John Themelis of Columbia University and Marco J. Castaldi of City College of New York, either have never been or are no longer part of the board, although both said they generally support thermal processing of solid wastes.

“I did not know I am on that Board but when I looked up the link you sent me, I found that I am in good company with Prof. Castaldi and the other ‘members,’” wrote Themelis in an email. “In general, I am all in favor of thermal processing of solid wastes, instead of landfilling them, for mitigation of climate change.”

Castaldi said that “back in 2010, while I was at Columbia University, they asked me to be on the board of advisors for a period of four years. That agreement expired in 2014 and I have not heard from them since about 2012 or so,” he said, adding “I do hope they succeed in their endeavors.” The American was unable to reach the other Technological Advisory Board members for comment.

Kate Cough

Kate Cough

Digital Media Strategist
Kate is the paper's Digital Media Strategist, responsible for all things social, and the occasional story too! She's a former reporter for the paper and can be reached at: [email protected]
Kate Cough

Latest posts by Kate Cough (see all)

Leave a Reply

Your email address will not be published.