'Black liquor' bill resurrected

Measure ending paper mill subsidies revived with deal to protect Maryland plant

March 25, 2013|Tim Wheeler

Some Annapolis lawmakers have gotten in the Easter spirit a little early.  A bill that would curtail millions in renewable-energy subsidies for mostly out-of-state paper mills comes to the Senate floor Monday, after being killed last week and then revived with a special deal for Maryland's only paper-making plant.

The bill, SB684, pushed by environmentalists, would phase out the ability of paper facilities to cash in on Maryland's renewable energy law by burning "black liquor," a tarry byproduct of the pulping process, and other wood waste to power their operations.

Under the 2004 law, paper mills collectively received $3.8 million in 2011 by selling "renewable energy" credits to companies supplying power to Maryland's households and businesses.  The state's electricity customers pay slightly higher rates to cover the cost of the credits.

Environmentalists contend far more subsidies are going to paper mills for an "old" form of energy, rather than to the wind and solar power projects they contend the law was supposed to encourage.  But the paper industry is fighting to hang onto its lucrative credits, particularly the New Page Corp., which owns the state's only paper mill in Luke in Allegany County.  The Ohio-based company recently emerged from Chapter 11 bankruptcy, and it's warned that losing the revenue from Maryland's renewable energy law - about $350,000 in 2011 - could jeopardize the 880 jobs there.

The bill's supporters tried to finesse lawmakers' concerns about the Luke mill by offering to amend the measure so that it could continue receiving renewable energy credits for another five years.  Though the mill's manager wrote a letter tentatively accepting the deal, his corporate chiefs later rejected it.

With the compromise unraveled, the Senate Finance Committee voted Tuesday to kill the bill. But supporters managed to get it reconsidered by offering to sweeten the deal, ensuring that the Luke mill could keep its subsidy for as long as the 125-year-old facility continues to operate. The panel voted again on Thursday, this time recommending it to the full Senate by 9 to 2.

"I just needed an understanding where this whole thing was going," said Sen. Thomas M. Middleton, the Finance Committee chairman.  The Charles County Democrat was among those on the panel who switched votes to revive the bill.

Mike Tidwell, head of the Chesapeake Climate Action Network, said he was satisfied with the new compromise, which would allow the Luke mill and one other plant in Virginia to keep receiving top-tier renewable energy credits while phasing out credits for other out-of-state mills. But the measure's outlook remains far from clear - the industry continues to oppose the measure, as do labor leaders representing paper mill workers.

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