A sweetheart deal

PSNH - Biomass Deal: A Billion Dollars And An Unusual Provision NH Public Radio The Public Utility Commission’s approval late Thursday of a 20-year contract between Public Service of New Hampshire and a proposed Berlin biomass plant is a huge economic deal with plenty of ramifications.  NHPR’s Chris Jensen reports. “This power purchase agreement represents a 20-year commitment to purchase power and renewable energy certificates. It is a deal valued at notably over $1 billion over those twenty years.” That’s Eric Kingsley. He’s an energy analyst with Innovative Natural Resource Solutions LLC. “And, it affects New Hampshire ratepayers but it also affects New Hampshire’s rural economy, the loggers and truckers that will be suppliers and it certainly affects Berlin, the city of Berlin that we all know is facing challenging times.” The agreement contains one unusual element. That is the chance to buy the Burgess BioPower plant. It is a proposal that caused some consumer advocates to do a double take. But basically here’s how that would work. PSNH is promising to pay Burgess a certain amount for electricity. It the market price is lower than that PSNH will put that extra money into an escrow account. That money can be used later to help buy the plant. For NHPR News this is Chris Jensen http://www.nhpr.org/psnh-biomass-deal-billion-dollars-and-unusual-provision

Comments

[egrohs]

It sure is a sweetheart deal. Another 20 years, PSNH will take this plant off of Cate Streets hands. This long process is inching closer & closer to what many have proclaimed to be the inevitable. And although Laidlaw's stock price took a major hit this week, there is no ill will and I will still be at the opening ribbon cutting ceremony. A round of Blue Moon on me fellow bloggers.

I just wanted to comment on the your last blog post Rock, since it has already entered in the historical annals of this blog, with a record 6 comments. I've noticed that with the last few blogs, the comment section has dwindled down. Disappointed to say the least. Maybe it's due to the lack of our furry donut-eating friend, Jon-boy. Whatever it is, I hope we can all remain friends.

Back to Laidlaw. I find it interesting that you are now in the business of analyzing stock. Since you wrote this:

"Not knowing what “greys” are all about is also a problem for many of the shareholders who are scrambling around to see what their options are and figure out how much money they’ve lost. On Tuesday when Laidlaw shares were once again being traded, the value of LLEG dropped a whopping 80% with a whole bunch of investors dumping their shares for a fraction of what they had paid and in fear that the values could go down even further."

It might be interesting to note that by the weeks close today, we are up 150% since Tuesdays close. .003 certainly isn't anything to cry about, down from .0052, after coming back from an SEC suspension. I hope you didn't forget that just 2 short years ago, this stock was trading between .0004-.0008 for quite a while. Many of the shares were bought by longs during this time. I can't speak for anyone else, but I can assure you that I am doing anything but scrambling around to see what I can recover. Matter of fact, I am what is referred to at this point as "riding free shares". Any wise investor takes their initial investment right off the top once the rise in stock price allows. So after this point, it's basically the houses money. Free shares. Down or up, you can't lose. I would imagine that many of the other longs have done the same thing. My cost avg is .0017, still a far cry from the triple zero's, but still up 80+% as of today's close.

Regardless of all the slanderous comments mentioned here against Laidlaw, this company is not disappearing into grey market oblivion, which is what 99% of the pink sheet stocks that get sent to the greys do. Laidlaw's PPS will recover, and then some. There have been several comments on record from Mike, I think all of them in the local papers up in North Country, that gives a general gist of why we were suspended by the SEC and affirming that we are working on appeasing the SEC and getting out of the greys. They just dumped their auditor and hired one of the top firms in the country, Marcum, out of NYC, to repreent them. This move was not done to disappear. Here's a little bit about Marcum:

http://www.vault.com/wps/portal/usa/rankings/individual?rankingId1=252&rankingId2=-1&rankings=1&regionId=0&rankingYear=2011

http://insidepublicaccounting.com/PDF/top100_2010.pdf

Regardless of Laidlaws current PPS, the PPA being approved is still great news for Laidlaw Energy Group. We look forward to our next payment upon closing of the construction financing loan, which Mr. Richard Cyr of Cate St has verified will be taking place, within the Concord Monoitor article from June 10th. Laidlaw was the catalyst that set this entire transaction into motion. Go back and reread the 900-page initial application. It's been fun.

As far as the IPP's going to the Supreme Court, Good Luck with that one. We all know they aren't monetarily prepared to appeal this decision, unless they can find some attorney to take this case, pro-bono. Seriously doubt it though. Any attorney looking at the entire docket in general, the process and willingness to revise the PPA, and the history of losing appeals against the PSNH will be hesitant to take on this case. I think the most the IPP's have right now is a prayer that PSNH will offer them short-term contracts to save them from going under. We will see. Hopefully, construction will get underway in July and we can all move on to the next topic of choice in this wonderful blog. Maybe the Northern Pass project, which from briefly reading about, I'd be a little bit more worried about if I lived up there in North Country.

[Rocky]

Thanks "egrohs" for your comments. Yes, the number of comments have declined as of late, still a good readership of around 300/da, but comments are down. I think the "heat" of the Laidlaw/Berlin Station project has cooled and so has the interest. The Northern Pass project is one where I'm conflicted. As a ratepayer and somewhat of a "green" person, I like the idea of a relatively inexpensive and renewable source such as hydro. The Hydro Quebec power would be roughly half the price per kw of the Berlin Station power. I also understand that folks don't want 200ft towers in their backyards, it's the same emotions as the 300ft stack and 125ft boiler in Berlin. The big difference is that rural folks care about the esthetic value of their surroundings but most Berlin residents are blind to the beauty that surrounds them and have accepted ugly industrial contraptions as normal.

[Wing Nut]

Nicely said Rocky

[Rocky]

Thanks WN. What's the issue that's going to replace Laidlaw? It's interesting to see that the SEC has some of the same concerns about Laidlaw/Bartoszek that many of us had from the get-go.

[wood burner]

Mayor predicts agreement imminent in biomass stalemate

By Barbara Tetreault

Jun 29, 2011 12:00 am

BERLIN — Mayor Paul Grenier said he believes a deal between Public Service of N.H. and the wood-fired Independent Power Producers will be reached soon. Such a deal would allow construction of the Laidlaw/Berlin biomass plant to get underway by late July or early August.
“I’m hopeful a deal is imminent,” he said yesterday.
Last week, the Public Utilities Commission denied the IPPs motion for a rehearing of its decision to approve a 20-year power purchase agreement between PSNH and Berlin Station. The IPPs have 30 days to decide whether to file a threatened appeal to the state Supreme Court.
Gov. John Lynch has played a direct role in attempting to broker an agreement between PSNH and the IPPs and a meeting between the parties was scheduled to take place yesterday. Four of the IPPS are pushing for short-term deals with PSNH to replace their expiring agreements. They are also concerned about competing for wood.
Richard Cyr of Cate Street Capital, which owns the pulp mill property, said he feels the IPPs are wrong to hold up his project to advance their own cause.
“This has nothing to do with us,” he noted.
Rather, Cyr said, the smaller biomass plants are trying to force PSNH to deal with them by putting the project between PSNH and Berlin Station at risk.
“It’s blackmail plain and simple,” Cyr said. “It’s like pushing someone else in front of a train so you don’t get hit.”
Cyr noted the IPPs at one time had 20-year agreements with PSNH. He said they reaped the money but choose not to reinvest in their plants to make them more environmentally competitive.
Both Cyr and Grenier said construction of the 75-megawatt biomass plant on the former pulp mill site will be a major economic boom for Berlin.
“It’s going to be a real good shot in the arm,” said Cyr.
It will take over two years to construct the plant at a cost of $228 million, exclusive of financing charges. Grenier said at the peak of construction 380 people will be employed on the project.
Once the plant is up and running, it will employ 40 people directly and is expected to generate as many as 200 indirect jobs in the forest industry. The city and Berlin Station are negotiating a payment in lieu of taxes that is expected to make the biomass plant the city’s largest taxpayer.
Over the past two months, Cate Street Capital has been preparing the site and doing some demolition to get ready for the start of construction.
“We have shown nothing but commitment to that project,” said Cyr.
But Cyr said the longer the biomass plant gets delayed the harder it is to finance.
“Hold out long enough and you can kill our project,” he said

[warren,]

Well I just got back from Vacation, and I see things are Progressing Quite Nicely. PUC approval, IPP's Motion thrown Out. The Northern Pass can hardly be called "Green Energy", as all the Dam's up yonder have Drastically altered Quebec's Environment, not only by putting Methyl Mercury into the Water Table, but also Displaceing the Native Cree & Innuit Populations.
The Govt. of Quebec is more Corrupt than Most...but Politically Speaking, not Likely to make any Enemies in "Green Circles" where these Issues would cause alarm if Quebec was of another "Stripe", politically. And this is why, I know Rocky will turn a Blind eye to the Environmental Disaster that is Hydro Quebec. Also, relying on another Country for Our Energy Needs is most appealing to those of a "Correct Mindset". Whatever it takes to Bring it all down, Man...

[Antonio Andolini]

Why PSNH wants Berlin Station and Northern Pass built and to be a monopoly again:
http://www.nhbr.com/news/924623-395/as-large-customers-flee-psnh-what-can.html

[Antonio Andolini]

PSNH pulls out all the stops to get Northern Pass:
http://www.concordmonitor.com/article/265911/vox-populi-northern-pass-style?page=0,0&CSAuthResp=%3Asession%3ACSUserId|CSGroupId%3Aapproved%3ABA4A9537C4BF4594E11F4B09D8217743&CSUserId=94&CSGroupId=1

[warren,]

Great Points Tony. So, on the flipside, Why Should PSNH have to or even be forced to Bail out the IPP's when the IPP's can obviously Sell their Output to PSNH's Competitors?
On the Subject of the Northern Pass, What do You think of the Idea of Building the Transmission Towers in the Shape of "Men"
who would be "Walking" across NH's Landscape, climbing hills and mountains and even "Looking" at each other? It's said that this would require very little modification to the Basic Structure of the Towers, and would give a "Solumn Effect". I know what I think...
This Blog has been Silent on the Issue of ISSI, and their Chapter 11 woes.... Could the Northern Pass and its Structural Steel requirements be a foil for the obvious Monumentally Disastrous Enviromental Impact(s)? Why would anyone with a "Green" understanding possibly be in Favor of this Horrible Project?

[jon]

PSNH should be forced to do a great many things differently so as not to go bankrupt at the expense of the ratepayers. PSNH will begin to lose their residential base as well if they don't begin changing their ways. The receivers of PSNH's industrial users are already chuckling over their plans to start taking the smaller commercial and residential base away from them. Despite some who "think" PSNH rates are reasonable, the truth is the rate is anything but reasonable as statistically proven by the mass exodus of industrial and commercial users. That is what happens when "sweetheart" deals are negotiated with company's exhibiting political clout. One who states PSNH should not be forced to keep the IPPS alive, when PSNH is asking the legislature to change the laws to keep PSNH alive might ponder that logic a bit more.

[warren,]

Will the IPP's go bankrupt at the expense of the ratepayers, or will they just go bankrupt? Apparently the recievers of PSNH's former customers do not Care a jot for the IPP's....So Will The IPP's go away Mad, or will they just go away? Either way, they will not be missed by PSNH or its Competitors. Buggy Whips jonny.

[jon]

The IPPS would inevitably be missed by all; the workers employed by the IPPS, the towns who lose the revenue, and yes, even PSNH, as such a move not to "PPA" the IPPS just adds significantly more injury to the label of "monopoly" that PSNH SO BADLY needs to avoid at this time. The IPPS are the backbone of northern NH biomass, the jobs and the revenue. Like it or not, they fit the requirement of 25 by 2025 as class three RECs impossible to fill by Berlin station. As existing infrastructure they should be part of the 2025 intiative. One who states the existing structure of the Burgess mill is a good use of existing infrastructure in one breath, yet fails to see the value of currently operating biomass facilities is not using reason reasonably.

[Rocky]

Why should reason prevail now? We're not where we are with this Laidlaw/Berlin Station project because it made sense since it never made sense. When did sacrificing the mill site and a new economy for Berlin for 40 jobs make sense? We had a snake oil salesman, an old boiler and PSNH wanting to have control of a new electrical generation station, naive residents and an ambitious politician with a big ego. Who needs common sense when you have that combination?

[Rocky]

I just heard our illustrious senator Gallus on NHPR saying that "the Laidlaw/Berlin Station project is in trouble and that it was a sad day for the North Country". Something about a deadline of June 30th where a deal had to come together with PSNH and the IPP's?

[Rocky]

Hot off the press!! During the 5 o'clock NHPR State News, a Cate Street spokesperson just announced that the Laidlaw/Berlin Station project is dead!

[Antonio Andolini]

http://www.nhpr.org/backers-say-berlin-biomass-project-dead