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September 18, 2000
Senator Olympia Snowe Re: Biomass Tax Credit Opportunity Dear Senator Snowe: I write to you in request for your help in supporting the proposed biomass tax credit about to be taken up by the Senate. This measure has significant ramifications for the Town of Greenville. I hope you will strongly support this measure. Senator Grassley will try to add the biomass tax credit to an urban renewal/rural assistance bill that is scheduled for mark-up in the Senate Finance Committee soon. Senator Grassley or another Senator may also seek to include the tax credit in the proposed Hatch-Baucus amendments to the pension bill that is likely to be debated on the Senate floor September 22nd. Maine's biomass power industry needs help now. Two biomass facilities remain closed; others are struggling to find ways to survive. Wholesale energy prices in New England just a month ago were insufficient to cover some of the plants' costs of operation. These facilities decided to operate at a loss in the hopes that financial relief would be forthcoming. While more recent energy prices would allow the plants to at least break even, it is anyone's guess which direction the volatile energy market will go. The addition of several thousand megawatts of new generation in New England should serve to depress prices. In any event, the existing biomass tax credit legislation contains a provision capping the credit to avoid “windfall profits” if energy prices rise above a certain level. The tax credit will help ensure that all Maine's biomass facilities remain operational. It will allow the industry to continue to provide the many benefits of electric system reliability, sawmill waste disposal, provision of local jobs and tax dollars, and greenhouse gas reductions. The loss of just one plant has a significant impact. Greenville's own biomass facility – the Greenville Steam Company – currently employs 22 full-time employees and provides 9% of the total taxes received by the Town of Greenville. The current market for biomass energy is such that the plant has considered closing, but is trying to find a way to continue to operate. It is crucial for the economy and the tax burden of the Greenville community that this plant continue to operate. This federal tax credit is a significant means to help the Greenville Steam Company to continue to operate. Thank you for your help. Please do not hesitate to call me if I can provide any additional information. Sincerely; CC Board of Selectmen |