The husband and wife behind an ambitious vision of transforming Maine’s forest industry into a fuel- and food-based bioeconomy say they have spent more than $17 million of their own money to refurbish and diversify two ailing wood-fired power plants, are committed to completing the projects, and are working to settle unpaid bills and back taxes.
“We’re all in,” said Kimberly Samaha, chief executive officer of Born Global, an entity associated with Stored Solar LLC, which bought the plants in West Enfield and Jonesboro last year. “We’re not going anywhere. And we want to get our money back from our investments.”
In a wide-ranging interview Thursday with the Portland Press Herald, Kimberly Samaha and her husband, Fahim, also said they have signed a contract with a New York-based shrimp farm – Eco Shrimp Garden – for a pilot aquaculture project that would use waste heat from the West Enfield plant. They believe revenue from the shrimp farm will help make the power plant profitable. They want to break ground on the project in the spring.
After declining to answer questions from the media in recent months, the Samahas agreed to be interviewed because they say the coverage omitted some important explanations and they want to send a message to Mainers and potential investors to counter a steady stream of reports about setbacks to their business plans.
And the timing is important.
Next week, Gov. Paul LePage and six state officials are set to go to San Francisco for a major bioeconomy event – the Advanced Bioeconomy Leadership Conference – where LePage will give an opening address about the economic opportunities in Maine for biotech industries. Kimberly Samaha also is on the program, presenting an update of the Born Global Bioeconomy 2050, a Maine-based initiative that centers on transitions involving waste, energy and food.
GOAL: BIOTECHNOLOGY-BASED ECONOMY
Born Global is described as a technology commercialization program for innovation in the bioeconomy. It’s identifying startup companies with an interest in using Maine’s extensive woodlands and legacy paper industry infrastructure to develop a biotechnology-based economy in partnership with state government and local communities.
A New Hampshire native, Samaha also is associated with other related entities. She is CEO of Synthesis Venture Fund Partners. Fahim Samaha is chief executive of French-based Capergy US LLC, a partner in Stored Solar, and a principal in Katahdin Shrimp Farm.
She and her husband have worked on seven energy projects, including an investment in a biomass power plant in Berlin, New Hampshire. Living in France, they came across news of Maine’s pulp and paper decline and saw the opportunity for the state to reposition itself “as the epicenter of the bioeconomy movement,” Kimberly Samaha said.
The Samahas don’t want this vision for Maine to be overshadowed by negative media coverage.
In recent weeks, the couple have been frustrated by reports that Stored Solar owed an estimated $500,000 to wood suppliers and contractors. Kimberly Samaha disputed that amount in the interview, and said most suppliers are now paid up and most of the remaining balances will be settled in the next few weeks. Dana Doran, executive director of the Professional Logging Contractors of Maine, couldn’t be reached for comment Thursday.
The Samahas also said the dispute with the wood suppliers stemmed from lower revenue and higher expenses than they projected.
The power plants were hurt by historically low prices on New England’s wholesale electricity market last winter, a result of the record-low cost of natural gas. Those electricity prices were the foundation for the per-ton pay agreements with wood suppliers, resulting in a dispute as power prices continued to ebb.
At the same time, Stored Solar needed to spend money to hire workers and repair the aging plants to make them viable. The combination of these and other factors crippled cash flow and earnings.
But Stored Solar has been stockpiling enough wood at both plants this summer to run them this winter, the couple said, when power prices tend to be highest. They hope to meet power contract terms that will make the plants eligible for a special, two-year state subsidy created to prop up the biomass industry. This year, they said, they decided to return the state money because of requirements in the contract.
“At this point,” Kimberly Samaha said, “it’s more important to get these plants up and running, to put our own dollars on the table.”
LARGE UNPAID TAX BILL IN JONESBORO
Stored Solar also has failed to pay last year’s estimated $90,000 tax bill in Jonesboro. Samaha said she’s working to pay down the debt. She attributes the problem to miscommunication with a former plant manager, and the tax bill being sent to the plant’s former owner in New Jersey.
“It’s a shame,” Samaha said. “I’m sick about it.”
Samaha said she called Jonesboro’s tax collector, Wendy Schoppee, on Wednesday. “I said, ‘Let’s hit the reset button and get this cleaned up.’ ”
Samaha said Stored Solar plans to pay in full roughly $9,800 owed for the real estate portion of the tax bill next week. The company is negotiating with the town to pay installments to erase more than $85,000 – which now includes legal charges and the town’s cost of filing a lien – for the personal property part of the bill that covers equipment and machines.
Reached Thursday, Schoppee confirmed the conversation. She said she’s contacting the town’s lawyer to calculate the exact amount due.
CLARIFICATION ON LOAN, GUARANTEE
The Press Herald also reported this week that a potential investor in the West Enfield power plant, Boston-based Arctaris Royalty Ventures Co-Investment LP, withdrew its application for the Finance Authority of Maine to guarantee 90 percent of a maximum $5 million loan for capital improvements.
The newspaper stands by its reporting, but in the interview, the Samahas said they had decided in September not to pursue the loan because the process was taking too long. They needed to spend their own money now to prepare the plant to run.
“It was putting the operation of the plant in jeopardy,” Kimberly Samaha said. “We didn’t want to miss the winter season.”
Meanwhile, another state-backed financing option in the final stage of due diligence is coming under closer scrutiny. The Maine Rural Development Authority has conditionally approved a $500,000 state-backed loan for Katahdin Shrimp Farm LLC, solely owned by Stored Solar West Enfield LLC. No closing date has been set.
But the Samahas say they are moving ahead to build the shrimp farm in the spring.
Plans are for Eco Shrimp Garden, which grows shrimp in a former mattress factory in Newburgh, New York, to build the first module. The goal is to produce 55,000 pounds of shrimp the first year, as a proof of concept for a larger operation. The heat from the power plant can warm water to roughly 85 degrees.
Key to the success of the shrimp farms is capturing waste heat from the biomass operation. Through Stored Solar, the couple bought the two ailing biomass power plants last year, intending to restart them as a springboard for the broader bioeconomy vision. The power plants had been shut down largely because depressed wholesale power prices in New England made them unprofitable. But because wood-fired power plants provide a crucial market for sawmill waste, loggers and truckers, the Legislature enacted a $13.4 million taxpayer subsidy to help keep them running.
The plants are old and inefficient. Stored Solar knew it needed to locate other businesses onsite that could use the heat energy that’s otherwise sent up the smokestack and wasted, as well as electricity. That’s why it’s trying to build a shrimp farm in West Enfield, located about 40 miles north of Bangor in Penobscot County.
It also is considering options for building a greenhouse for tomatoes and peppers, following a market study by a consultant.
SUPPORT FROM STATE GOVERNMENT
The LePage administration has been supportive of what the Samahas are trying to accomplish. The governor sees biotechnology as one answer to creating new industries at the five paper mills that have closed in the past few years, and making up for other forest industry cutbacks that have erased an estimated 2,400 jobs since 2011. Early stage companies and researchers are developing ways to convert timber and wood waste into fuels, foods and chemicals, which could be produced on a commercial scale at languishing mill and biomass power sites.
“Obviously,” Kimberly Samaha said, “we didn’t stop our business in France to take on two projects in Maine. That wasn’t our intent.”
The couple, she said, came with a big vision for how to connect the biomass plants and paper mills in a new bioeconomy.
“But honestly,” she said, “it was a bit too much, too soon.”
Tux Turkel can be contacted at 791-6462 or at:
tturkel@pressherald.com
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