Practices | Energy Law

Waste-to-Energy Plants

The Energy Law Practice Group (“EPG”) has represented two refuse-derived fuel (“RDF”) facilities (800 and 1,000 tons per day) in Maine. Both facilities were conceived in the early 1980’s when RDF was a relatively new approach to solid waste disposal. The EPG acted as lead counsel in the development, permitting, financing, and start up of both facilities. Involved in this work:

  • Negotiation of power purchase agreements with the local utility
  • Approval of one power contract by the Maine Public Utilities Commission
  • Negotiation of tipping fee agreements with municipalities
  • Drafting model flow control ordinances
  • Preparation of permitting applications and representation in licensing hearings
  • Arrangement and facilitation of independent engineer’s reports
  • Representation in financing transactions (industrial revenue bonds and letter of credit support)
  • Representation for revenue bond allocation before the Finance Authority of Maine (FAME)
  • Lobbying work to secure favorable state legislation on waste-to-energy-projects
  • Negotiation of contracts for disposal of ash and front end residue

After start up, both plants experienced mechanical problems. The EPG represented the owner in arbitration against the plants’ general contractor, General Electric Company. Arbitration was commenced on the first project in the spring of 1988 and resulted in a cash award of $11.5 million dollars and a release from payment from the contractor’s claim of over $6 million dollars.

During the American Arbitration Association proceeding, issues were litigated concerning the following systems:

  • Flail mill design and construction
  • Magnetic separator design
  • Trommel yield and mechanical problems
  • Disc screen yield
  • Secondary shedder capacity problems
  • Steel pan and rubber belt conveyor problems (jams, transfer points, spillage, mechanical problems)
  • Explosion chamber design issues
  • Plant drainage
  • Lighting
  • Tipping floor erosion
  • Negative pressure for odor control
  • Dust control systems
  • Boiler tube corrosion (Inconnel cladding issues)
  • Acid gas scrubber corrosion and baghouse design problems
  • Ash de-watering problems
  • Water inlet system failures (lack of traveling screens)
  • Fuel feed problems (multiple fuel capability/wood chips and RDF combined)
  • Other operational issues (OSHA, plant training, equipment manuals, etc.)

The second plant experienced similar problems. That dispute was settled for a substantial cash payment prior to commencement of arbitration hearings. After operation had commenced, and in order to honor their trash disposal obligations, both facilities had to be retrofitted. The EPG helped select the engineering and construction firm to undertake this work, and drafted the contracts to put the retrofit into place. As a result of this work, and the dedicated perseverance of the clients and their staffs, both facilities are today operating successfully with some of the lowest tipping fees and best environmental compliance records in the country.

The EPG has also represented a number of municipalities that are involved in publicly owned mass burn facilities. While this representation has not been as extensive as with the RDF plants, a number of issues involving municipal flow control and bond guarantees have been handled over the years.

The representation of waste-to-energy plants has given rise to a number of related issues. For example, the EPG represented several energy plants when they sued the state of Maine over the imposition of a tax on the importation of out-of-state solid waste to be disposed of in its clients’ plants. The court ruled the law to be an unconstitutional violation of the Commerce Clause of the Maine Constitution, and a significant refund was obtained for past tax payments.

The EPG has successfully represented waste-to-energy plants in applying for state property tax exemptions for pollution control equipment. It has handled labor issues, personal injury litigation, and similar problems inherent in the operation of an industrial facility. The EPG also has negotiated and drafted numerous contracts required for the operations of these facilities.

The EPG helped its client, Cassella Waste Services, in the development of a landfill in West Old Town, Maine. The landfill was licensed as a paper mill sludge site for Georgia Pacific’s Old Town mill. The mill announced that it was shutting down some of its operations due to high energy costs. Working with the state of Maine, the EPG helped engineer the purchase of that landfill by the state (Maine has outlawed new privately-owned landfills), which in turn leased the landfill to Cassella for a lump-sum, advanced payment used to buy the landfill from Georgia Pacific. Georgia Pacific used the proceeds of the sale to purchase a mothballed biomass plant and move it to its mill, thereby lowering energy costs and retaining hundreds of jobs. The work of the EPG members was instrumental in a successful outcome.