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W W W. M A I N E B I Z . B I Z 13 A P R I L 4 , 2 0 1 6 "In the last roughly 24 months, if you include Madison, Maine has lost markets for 3 million tons of woody materials," Kingsley says. at's roughly a 20% decline in the 14.6 million tons of wood harvested in Maine in 2014 reported by the Maine Department of Agriculture, Conservation and Forestry. Importantly, he adds, the closure of the Madison Paper Industries mill eliminates the last major market in Maine for spruce and fi r, the dominant tree species north of Route 2. While the sawlog market remains for the larger spruce and fi r trees, he says, the smaller trees typically fi nd their way to pulp and paper mills or became biomass, the low-grade wood derived from limbs and tree tops. Both of those markets historically created an opportunity for landowners to make some money at the same time they're thinning their forests to enhance the growth of highest-value trees. e loom- ing spruce budworm infestation that's expected to hit Maine in the coming years adds another compli- cation, since thinning spruce-fi r trees is one of the strategies being recommended for minimizing the extent of the outbreak. " e market one would rely upon [to sell spruce- fi r harvested in a preventive spruce budworm thin- ning] is all but disappeared," he says. e tightening of renewable energy standards in southern New England, meanwhile, highlights a weak- ness of Maine's biomass market — namely, its depen- dence on favorable wholesale electricity prices and support from state policies in southern New England that had off ered above-market rates for renewable power. Massachusetts' subsidy ended in December, causing Covanta to idle its two Maine biomass plants in March. Similar new rules are scheduled to take eff ect in Connecticut at the end of 2017, triggering worries that some or all of ReEnergy's four biomass plants will shut down 2018 if conditions do not improve. Kingsley says a 2002 study he did of New Hampshire's biomass energy industry indicates that biomass power creates up to fi ve jobs per megawatt of generating capacity. Using that standard, he says, Covanta's two plants, with 50 MW capacity, had been supporting as many as 250 jobs. Of those, approximately 200 would be loggers and truckers delivering low-grade wood to Jonesboro and West Enfi eld. ReEnergy's four bio- mass plants in Maine have a total generating capac- ity of 155MW, enough to supply power to 154,000 homes each year. All told, Maine's biomass industry accounts for 400 direct jobs at biomass plants and at least another 900 indirect jobs, and accounts for 25% of the state's overall power supply and 60% of the state's renewable energy portfolio, according to the Professional Logging Contractors of Maine. C O N T I N U E D O N F O L L OW I N G PA G E » VALUATIONS CUSTOM-FITTED Gain Insight with Valuation and Forensic Experts The issues are complicated. You need an expert who can bring clarity. Leveraging Northern New England's largest accounting and consulting fi rm. Dependable valuations. Defendable results. SHAREHOLDER DISPUTES ECONOMIC DAMAGES LOST PROFITS BUSINESS APPRAISAL BERRYDUNN.COM In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if In the last roughly 24 months, if you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has you include Madison, Maine has lost markets for 3 million tons of woody materials. — Eric Kingsley Innovative Natural Resource Solutions LLC

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