Cate Street Capital Spokesman Scott Tranchemontagne said Whitefield Power and Light requested over $13 million in cash payments for their plant. Grenier said Whitefield Power and Light, which is owned by Korea East-West Power, is an example of a foreign company interfering with North Country business. Grenier said all parties suffer from the collapse of the Berlin Station. He said there will be no short term power agreements that the smaller biomass plants say they need to survive.
A crushing blow was dealt to New Hampshire's North Country this week when months of negotiations were undercut at the eleventh hour by a Korean-owned power company's demands for $13 million in cash payments.
Whitefield Power and Light, owned by Korea East-West, has been singled out as the lone independent power producer (IPP) unwilling to complete a deal that would have allowed construction to begin on the Berlin Station Biomass Plant. The point of contention during the talks was a deal struck between the Berlin plant and Power Service New Hampshire (PSNH) that would have allowed PSNH to purchase power from the Berlin station. Berlin's Mayor, Paul Grenier, is incensed and has been vocal in the press:
“In the end it was greed beyond belief that stopped this project,” Grenier said. Grenier said the parties have been negotiating for months with Gov. Lynch leading the effort to get an agreement. He said there had been five meetings within the last two weeks.
The mayor said Cate Street Capital needed an agreement in place by June 30 because its construction contract with Babcock and Wilcox expires this month and would have to be re-negotiated. He said PSNH had agreed to give the biomass plants short-term power purchase agreements which were a main demand. But then, Grenier said at the eleventh hour the biomass plants made additional demands. In particular, he singled out Whitefield Power and Light for its demand for cash payments. Whitefield was not seeking a short term power purchase agreement.
The Berlin plant had broad support, not only of the mayor, but of the construction and steel industries. The other five IPPs have been forced to defend themselves, suggesting they took the necessary steps to keep the Berlin plant alive:
The wood-fired independent biomass plants charge Cate Street Capital walked away from negotiations just when it looked like the parties were close to an agreement.
“The fact they withdrew from the deal so abruptly came as a shock to everyone,” said Mike O’Leary, plant manager for Bridgewater Power Company. “We were very very close to a deal.” Cate Street Capital declared its efforts to construct a 75-megawatt biomass plant on the former pulp mill site are dead after the parties failed to reach an agreement by the Portsmouth company’s deadline of June 30.
Cate Street Capital, who was brokering the deal, has countered that a deadline was needed to keep construction on course. This too has been labeled false by the IPPs:
O’Leary said the June 30 deadline was not part of the discussion when the negotiations first got underway. He said Cate Street Capital inserted the deadline part way into negotiations. O’Leary said all the IPPs have done is exercise their business rights by filing as intervenors in the PUC docket on the power purchase agreement between Berlin Station and PSNH. He said appealing the PUC’s order to the Supreme Court is part of the process.
O’Leary said Cate Street Capital is trying to make the IPPs the villain when all they are trying to do is protect their jobs, infrastructure, and businesses. He noted that the IPPs have all been in business for a long time. His plant opened in 1984. In contrast, he said Cate Street has never built, owned, or operated a biomass plant.
Life after the blame game is not looking too bright in the North Country. The Berlin construction site is already being dismantled and the ripple effect of the unraveling will be felt deeply in the logging industry as well, officials say. Conceptually, the fall of Berlin Station provides an example of the potential jobs impact of free trade, according to Shawn Cleary, Business Agent for Ironworkers Local 7 and a representative of the New Hampshire Building and Construction Trades Council. Not one, but two projects run by foreign-owned companies have jeopardized New Hampshire jobs:
It's hard to estimate the manhours. but we are talking about over 300 construction jobs. I was supposed to be sending rod-busters there next month. One Independent Power Producer is causing this deal to fall apart. Whitefield Power and Light, a fully owned subsidiary of Korea East-West, has aggressively lobbied for a deal that would guarantee Power Service New Hampshire (PSNH) buy their power, so they could remain viable. They got that guarantee and are now adding a demand for a cash payment in exchange for withdrawing their appeal to the NH Supreme Court.
One State Senator from the North Country says as many as 1200 direct and indirect jobs will be lost as a result of this project being scrapped. That number is totally plausible when you consider that just last month, Isaacson Steel, of Berlin, NH filed Chapter 11 and made a tough decision to furlough over 70 shop workers as part of a reorganizing plan. Many of those workers have yet to return to work.
Another project in the North Country is Brookfield renewable Power's Wind Farm. Brookfield Renewable is based in Toronto, Canada and has hired RMT of Madison, Wisconsin to erect the towers. Despite the available pool of local New Hampshire Ironworkers, RMT is importing their own from Wisconsin and Utah. Tracy Bredeson, the company's Human Resources Director, told Local 7 Iron Workers that they very often enter into single project agreements around the country, wherein they employ local Ironworkers referred from the Union Hall. But, RMT felt that they didn't need to on the Coos County project.
New Hampshire's North Country is a rural area with a rich union history. Generations of workers were employed in the once bustling paper mills. Now Berlin and the surrounding communities have almost double the unemployment rate of the rest of the state. Cleary is inclined to connect the dots drawn by off-shore investment:
I don't know how the United States is ever going to pull out of this recession if we continue to let foreign competitors slow us down.