An Act To Protect Jobs in the Forest Product Industry

Emergency preamble. Whereas,  acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and

Whereas,  through a series of private and special laws, the State has granted certain rights, privileges, immunities and franchises to Brookfield Renewable Energy Partners to construct, own and operate dams and hydroelectric and related facilities for the purpose of generating and transmitting electricity and to Great Northern Paper, LLC, and its predecessors in interest, including, but not limited to, the authority to build, own, operate and maintain paper production facilities; and

Whereas,  the waters of the State are owned in perpetuity by the State in trust for the people of the State; and

Whereas,  existing provisions in private and special law inhibit Great Northern Paper, LLC, as the owner of the paper production facility in the Town of Millinocket or the paper production facility in the Town of East Millinocket to receive revenue from the sale of electricity from the hydropower facilities when there is a cessation or reduction of paper production; and

Whereas,  Great Northern Paper, LLC, ceased paper production at the East Millinocket paper production facility in late January 2014 and intends to use the paper mill closure period to make necessary facility upgrades to improve efficiency and enhance the facility's long-term viability; and

Whereas,  Great Northern Paper, LLC, intends to employ as many of the East Millinocket paper production facility's employees as possible to perform the necessary upgrades and improvements during the current closure period; and

Whereas,  Brookfield Renewable Energy Partners receives a financial windfall by selling electricity to other purchasers at higher rates than the rates they would have received from Great Northern Paper, LLC, upon the cessation or reduction of paper production at Great Northern Paper, LLC; and

Whereas,  the ability of the East Millinocket paper production facility to financially benefit from the electricity revenue during the cessation or reduction of paper production would help the facility sustain its operations and remain viable during the closure; and

Whereas,  the Legislature finds that the Katahdin region will benefit by an increase in the electric transmission line capacity serving the region; and

Whereas,  in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,

Sec. 1. P&SL 2001, c. 45, §2  is amended to read:

Sec. 2. Conditions and limitations. Within the period beginning at commencement of operation of increased electric transmission line capacity serving the Katahdin region and ending 15 years after the transfer to GNE, LLC of the Hydropower Facilities, if there is a Paper Mill Closing the owner of the Hydropower Facilities shall pay an annual amount of $75,000 to the economic development body serving the Katahdin region, as identified by the Department of Economic and Community Development, for each Paper Mill Closing. Payments cease upon the resumption of paper production at the affected mill. For purposes of this section, "increased electric transmission line capacity serving the Katahdin region" means any electric transmission lines that will allow the continuous transmission of electricity generated by the Hydropower Facilities to or from any consumer other than the paper production facility in Millinocket or the paper production facility in East Millinocket and having a capacity to transmit in excess of 70 megawatts.

The owner of the Hydropower Facilities and the owner of the paper production facility in Millinocket or the paper production facility in East Millinocket may not enter into any agreement or understanding with each other under which the owner of the paper production facility in Millinocket or the paper production facility in East Millinocket receives revenue from the sale of electricity from the Hydropower Facilities and there is a Paper Mill Closing for the purpose of allowing or increasing the sale of the electricity from the Hydropower Facilities to any other purchaser or entity or into the wholesale electric market. If the owner of the paper production facility in Millinocket or the paper production facility in East Millinocket enters into such an agreement or understanding, the owner of the paper production facility shall pay to the Treasurer of State, upon the Paper Mill Closing, an amount equal to the value of all tax credits or reimbursements relating to property associated with that paper production facility received by the owner pursuant to the Maine Revised Statutes, Title 36, chapter 915 after the effective date of this Act. If the owner of the Hydropower Facilities enters into such an agreement or understanding, the owner of the Hydropower Facilities may not sell or transfer, pursuant to the authority granted under section 1 of this Act, any of the rights, privileges, immunities or franchises that have been granted by private and special law to Great Northern Paper, Inc. and its predecessors in interest and may not sell, transfer or transmit, pursuant to the authority granted under section 1 of this Act, electricity to any 3rd party.

In order to assist the owner of the paper production facility in Millinocket or the paper production facility in East Millinocket to restart paper production at either of those 2 facilities, including maintaining the tangible and intangible assets required for viable restart of either of those facilities during the period of closure, when the owner of the Hydropower Facilities sells electricity that it would have sold to the owner of the paper production facility in Millinocket or the paper production facility in East Millinocket to another purchaser or entity or into the wholesale electric market and the market rate for that electricity exceeds the purchase power agreement rate, thereby generating positive revenue derived from the cessation or reduction of paper production, the owner of the Hydropower Facilities shall transfer to the owner of the paper production facility in Millinocket or the paper production facility in East Millinocket the difference in revenue it would have received pursuant to the purchase power agreement rate and the amount received from the sale at market rates, as long as there is no reduction in labor force associated with the cessation or reduction of paper production, commencing after the restart of the East Millinocket paper production facility at the conclusion of the current Paper Mill Closing that began January 23, 2014.

Sec. 2. Retroactive application. This Act applies retroactively to January 1, 2014 regarding any sales that qualify for the payment transfer described in this Act.

Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved.

SUMMARY

Current law restricts the ability of Great Northern Paper, LLC, to receive revenue from the sale of electricity from Brookfield Renewable Energy Partners when there is a cessation or reduction of paper production. In order to allow the Millinocket or East Millinocket paper production facility to benefit from the electricity revenue during the closure period and help the facility sustain its operations and remain viable during the closure, this bill amends the law to require Brookfield Renewable Energy Partners to transfer to Great Northern Paper, LLC, certain windfall revenue received from sales of electricity available due to the cessation or reduction of paper production and sold to other purchasers or into the wholesale electric market as long as there is no reduction in labor force associated with the cessation or reduction of paper production, commencing after the restart of the East Millinocket paper production facility.