Burgess BioPower files for Chap. 11 bankruptcy, ends agreement with Eversource

The company hopes to restructure and continue to operate the 75-megawatt Berlin biomass plant long-term.

BERLIN — Burgess BioPower has terminated its purchase power agreement with Eversource and filed for Chapter 11 voluntary bankruptcy, the company said Feb. 9.
The bankruptcy filing was not a surprise. Burgess BioPower had warned it faced bankruptcy after the Legislature failed to overturn Gov. Chris Sununu’s veto of a bill that would have eliminated the requirement that the company repay $71 million in overmarket costs.
In a release, Burgess BioPower said Eversource had failed to make required payments to Burgess BioPower. But Eversource said it began reducing payments to Burgess BioPower last month, as required to recoup the $71 million.
“Last year, policy makers rejected legislation that would have forgiven the $71 million, and we are required to enforce the terms of the PPA,” said Eversource spokesman William K. Hinkle.
Burgess BioPower said it hopes to restructure and continue to operate the 75-megawatt biomass plant long-term.
“The company intends to use the bankruptcy process to confirm a plan of reorganization that will best position the company for long-term success within the shifting energy landscape, protecting employees, maintaining its excellent relationships with vendors and suppliers, and continuing its positive impact within the city of Berlin” Burgess BioPower said in a release.
As part of its filing with the federal Bankruptcy Court for Delaware, Burgess BioPower said it has entered into a restructuring agreement with its senior secured lenders that calls for a substantial deleveraging or sale of the company. The lenders have agreed to provide $18 million dollars in debtor-in-possession financing that will allow the company to operate the biomass plant and pay its obligations while in bankruptcy.
Coos County officials and the forest product industry had fought for legislation to forgive the $71 million, citing the economic impact it provides. A study said the plant generates over $70 million annually to the state’s economy and creates 240 direct and indirect jobs.
The biomass plant is the largest purchaser of low-grade wood in the state, buying about 800 tons of wood annually at a cost of $25 million. Timber officials argue it creates a market for low grade wood that allows forest landowners to manage their lands to produce high grade fiber.
Berlin officials said the plant provides an estimated $3 million annual in property taxes, water, and sewer revenues to the city.
Burgess BioPower Vice President for Corporate Affairs Sarah Boone stressed her company’s commitment to the region.
“Burgess BioPower remains committed to the people of Berlin and to the Granite State. The restructuring process will permit the company to continue the production of reliable, renewable energy while creating a sustainable path for Burgess’s long-term operation,” said Boone in a statement. “We are confident that the company will navigate the process smoothly and successfully.”
barbara@berlindailysun.com

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