Very interesting story. The State is doing what it can to keep the industry from folding. Stung by setbacks, wood suppliers seek new markets and products to survive
Thanks for posting savemoney. Would be good if more people used wood/pellet heat as that would better support the local economy up there.
Interesting article. I would think at $200-250 per ton that wood pellets should be profitable. Seems like this would be a good fit for a company looking to diversify
Unfortunately the price would have to be higher than that to justify the risk due to electricity prices in Maine. Increase in Maine electricity delivery costs sends bills soaring for big businesses BUSINESS Posted February 7 Increase in Maine electricity delivery costs sends bills soaring for big businesses With average bills rising 19 percent for complex reasons unrelated to generating electricity, and with more volatility ahead, the state may lose companies and their jobs.
here's another one. Why losing Maine’s biomass electric industry would cost more than just jobs | Professional Logging Contractors of Maine
All of these problems are due to political interference in these States electrical systems. It sucks to lose your job but if more companies relocate to areas with less or no interference then maybe they'll get the message to keep their grubby hands off the power systems. For every action there is an equal and opposite reaction. Mods, delete if this is going over the line.
I wonder why every yuppytown around here is making those worthless plastic bags illegal and NOT requiring paper bags? It's a little thing but it all has to add up. Don't get me started on the electric grid "meddling" that's done here!
There is quite a back story to all this that few people know about, and while it is somewhat political, I really do not mean it to be, it is just that the results of some underhand dealings has really caused problems in Maine and our main industry. This is what occurred... Maine has deregulated power so our bill is actually split between buying power and the delivery charge to maintain the power to our homes. This means together way pay the HIGHEST electrical rates in the country, about 17 cents per KW. A few years ago we could have skipped out on the New England Power Grid and joined our neighbor, the New Brunswick Power Grid since they just rebuilt a Nuclear Power Plant literally across the river from Maine. They had additional output and wanted to sell it to us. We could have had power for 7 cents per KW. However the three members of the Public Utilities Commission (PUC) voted against it, one even quit the PUC 2 weeks later and joined up with a windmill company. The State District Attorney got involved, and initiated charges for conflict of interest, but then suddenly dropped the charges. That member was the son of our Senator Angus King, which at the the time was on the Board of this windmill company. He had to step aside when he ran for Senator because of Conflict of interest, but let his son take his place (The guy formerly of the PUC). This Senator was also the guy that cast the deciding vote to stop the Keystone Pipeline. Obviously it is in his best interest, and the interest of his family, to keep electrical rates high so that wind power can compete. Now keep in mind electricity is actually our biggest export here...yes it beat out wood on a dollar per dollar basis. With our dams, boilers, etc all kicking out power, we actually have more than what we need. However it is the states like MA, CT, RI and NY that need our power. It basically boils down to BIMBY Principals; they do not want power plants in their back yard. So it is not so much that we need power and the cost is high, it is that the electricity here has so much value to those critical states. That was why staying on the New England Power Grid was important to keep the price of electricity high. It is all about supply and demand, and greed. As for Maine subsidizing the wood boilers to keep the logging industry afloat. I talked to the Senate President of Maine, and he said the industry has 4 years to get its act together, but the subsidies will not go on further than that, Maine just cannot afford it. Ultimately there are too many people logging for the market that exists. Myself since 2 years has already gone by, I am going to have a paper company come in and clear cut the wood I have on 50 acres I am clearing into farmland. If I wait, this junk wood that can only be sold as hog fuel, will have no market. In short it is bad and I predict it will get worse. Currently I figure my woodlot produces about $25 per acre per year because it takes 30 years to grow a marketable tree, however property taxes are a staggering $28 and getting worse! Literally I am losing $3 per acre per year just having my land in forest. I cannot have that! On the flip side, I can put 10 sheep per acre and in 5 months slaughter them for $100 per head. You do the math...or raise corn, or small grain. It breaks my heart to clear cut, but this is 2017 and not 1985.
Interesting post LodgedTree ... thanks. Like many Mainers, I have friends and family who are, or have been, directly affected by Maine's sinking forest industry issues. It's really sad...
They should privatize and deregulate. Subsidies never help either. Do you have any data or links backing your statements of electricity rates? Or export numbers? I think it's crazy temporarily subsidising one group then subsidising another (wind). Maybe they can subsidise hand forged horseshoes for everyone's horses......
C'mon now, it's politically correct to "save the trees" ( except for when our donors pockets are lined with wood pellet export profits )
Hawaii, Massachusetts, Connecticut and Rhode Island all have higher electric rates than Maine. Green power is a national mandate that is affecting everyone.
Bill you are right. I noticed they have now changed their reporting to reflect our double-bill; something they did not do in the past. When I get my latest statement I will check it though because I am pretty sure we pay more then the 12 cents per KW cited.
In some ways this is how the world wide economy operates. They are more than happy to pay someone to take a mason jar filled with cash and go bury it out in the woods. But the government is just as happy to have another person go and dig it up. On both payouts they collect a tax and that is what keeps society moving forward today. How much is actually in the mason jar matters little, it is just faith based that it has some sort of value. It is kind of like the story of a rich guy that walks into a logger town in Northern Maine. He needs a room to stay for the night and goes to a motel. The motel owner says it is a $100 a night to stay, so the guy plops down a $100 bill and goes to his room. The motel owner has not had many people staying at his motel lately so to feed his chickens at home, he has been getting credit for grain over at the feed store. He runs over there to pay off a few months of bills. The feed store owner had some work done on his truck on credit and runs over and pays off the mechanic in town. The mechanic...well he is a widower and kind of lonely so he has been obtaining the services of a young single mom, so he runs over and pays her, that woman of ill-repute has been using the motel for her and her John's, so she runs back to the motel and pays the owner the hundred she owes him. She has just left when the rich guy from out of state comes down the stairs and says the room has spiders and demands his money back. He grabs the money and leaves for the next town over. The interesting part of this whole story is, it took outside money to start the chain reaction, and yet while everyone has their debts paid, not a lick of money has stayed in town, and nothing monetarily was done. Today that is how the economy works, everyone having faith in the dollar bill. The government in this case is the rich guy from out of state, and through subsidies gets the whole thing rolling. I am not advocating this, in fact I am saying the opposite, it is a sad state of affairs today, but this is how the world wide economy works. Myself, I use cash and cash only; no credit cards, debit cards, or money transfers, and I am very frugal. Since I am debt free the $100 bill in this example stops with me. I am not alone in that, and in fact it was one of the best things the down-turn in the economy did in 2008, people started looking at this crazy system with more open eyes.
I read your first sentence then stopped reading. No it's not. It's socialism/welfare that has proven not to work over and over. You made stuff up as facts in your story as your facts are not facts, your export numbers as electricity are bs and so are your cost of energy numbers.
Of course, that is how the world wide economy operates. If you have ever been to to Europe you would see they are far worse then we are here in terms of socialism and subsidies though. (So is Canada). As for electric rates, if you can figure out how much Mainer's pay exactly for our electricity, you are better than me. There is 30 different rates, then of those rates peak hours, shoulder hours, and off peak hours. Then the electric rate depends on which offer a Mainer signs up for, standard rate, NextEra, or a TransCanada. And all that does not include what the FEDERAL PUC charges for delivery charges. I was probably wrong. I said we had the highest rates in the country, but it was probably more like the highest electric rates in the 48 continuous states. The discrepancy between Hawaii and Maine was pretty high, but only pennies between other states. Depending on how a Mainer lives, what they choose for an electrical supplier, and age and type of residency; I am sure we pay the highest electric rates in the country. Deregulation was supposed to stop that; it only made it worse! You can get more confused here. This is accurate as of July 1st 2017 from my electric company Central Maine Power...which by the way is parent owned by a Spanish Company...like all of the eastern half of the USA if you trace them back far enough. CMP | Pricing Schedules
It's not how the world wide economy works. You keep interjecting political veiws and opinions as fact. Out of my entire education in business and my personal life experience in business I've never seen or heard of anything or seen anything like what you are saying actually working or be real. You keep spewing the wrong information. More wrong information.....It was never deregulated, the free market works. Electricity FAQ: Maine Office of the Public Advocate
The main problem is when politicians dictate what the power generator is going to use to generate the power. Or punish them for using the cheap reliable stuff (coal) because of climate hysteria. In the end it's us that pays until we smarten up and kick every one of them out and replace them with rational people who actually will look after our interests instead of the solar and wind cabal.
Electric prices are very complex here. The bottom line is that they cost too much and discourage commercial growth because it can be done elsewhere where the cost is less.
