The Fiberight flop

It has been nearly a year since the Coastal Resources of Maine facility in Hampden went offline and negotiations with a potential buyer have stumbled. The deal is still expected to close by June 30. We’ll see.

From the technology (innovative but unproven) to the ownership structure (convoluted) to the timeline for opening (delayed), nothing has been simple about the trash plant often referred to as Fiberight. Coastal Resources of Maine (CRM) is a subsidiary of Fiberight, which developed the technology. Fiberight and an equity firm jointly own CRM. The plant is collateral for repayment of CRM’s loans. The bondholders are expected to foreclose as part of the sale process and become the new owners. Meanwhile, the land the plant sits on belongs to the Municipal Review Committee (MRC), a nonprofit representing the solid waste needs of 115 Maine municipalities, and the MRC acts as the landlord. The MRC holds the municipal waste contracts and the permits for the plant and thus a great deal of negotiating power, but it is the bondholders and their trustee who are selling the plant. Lost? Yeah, it confuses us too.

What is simple is the fact that municipalities generate trash. Lots and lots of trash. During the plant closure, MRC struck a deal with its ex. That is, the plant that used to take its waste, Penobscot Energy Recovery Co. (PERC) in Orrington. PERC agreed to accept 75 percent of trash from MRC member communities so that the trash could be burned for energy instead of being landfilled. Great, right? Not so fast. After MRC broke up with PERC a few years ago, the Orrington plant downsized. It could not scale up quickly enough last year to accommodate the additional trash. So PERC incinerated the municipal solid waste it received, but sent roughly 60,000 tons of commercial waste that it would usually burn to the landfill. Sounds like a wash to us. Next month, PERC will be down for maintenance and more trash will be diverted to the landfill. 

Meanwhile, the Coastal Resources plant sits idle. While operations would have to resume within the parameters of existing permits, the prospective buyer, Delta Thermo Energy, has its own technology it may eventually implement. The Hampden plant was not open long enough to demonstrate whether the existing technology fulfills the grand vision sold to the MRC and its members communities. Now even more technology could be added down the road. We’re not sure how much innovation we can handle.

It’s a mess from which the MRC has little hope of disentangling itself anytime soon. As sale negotiations continue, the group will have to continue to use its leverage to ensure the buyer is technically and financially capable of getting the plant running again. The group also should be exploring exit strategies. Stopgap measures will only work for so long. Member communities need a viable solution for their long-term trash disposal needs. Sticking it all in a landfill shouldn’t be one of them.

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