PSNH may build Berlin power plant

The city built by paper mills got a piece of good news on Friday.

Pat McDermott, business development director for Public Service of New Hampshire, confirmed rumors that his utility might build a wood-chip-burning power plant at the site of the failing Fraser Papers pulp mill in Berlin. A project like that might boost a workforce still grieving over the loss of 250 jobs at the Berlin pulp mill, effective May 6.

He said the required feasibility study could take six months for what could be a 50-megawatt power plant. The study would examine North Country economics and the capacity of the lines and equipment in the 20-megawatt Fraser Papers co-generation plant that yields electricity and steam for the paper process.

“It’s premature to guess what the whole project would cost, but they already have a yard and suppliers in place,” McDermott said. “We’d need help from the Legislature to build there. Current law prevents us from adding new generation capacity.”

The PSNH official also said the conversion of a coal boiler at Schiller Station in Portsmouth to one that burns chips would help the entire wood industry. That $75 million project in Portsmouth is under construction and should go on line by the end of 2006.

McDermott confirmed that New England Wood Pellets had considered building a North Country plant that produces wood pellets the size of peanuts for stoves and furnaces. He said the sticking point was always the competition from paper and pulp mills. “Obviously, that has changed,” McDermott said.

Two of the mills are gone. Groveton Paperboard closed its paper mill this winter, eliminating 108 jobs.

“I’m really concerned to keep the loggers in business,” McDermott said. “We don’t want them to leave the industry in the lag time before something else comes in. That would drive up our cost of materials, and you’d have to redevelop that industry.”

Jasen Stock, director of the New Hampshire Timberland Owners Association, said the PSNH proposal makes perfect sense.

“It’s not just the existing infrastructure,” he said. “You also have fiber, a logging workforce and a strong labor pool for the power plant. We’re pleased to hear that level of interest in something forestry-related.”

Stock said the soon-to-close Berlin plant represents 10 percent of the state’s demand for wood products — a $2.6 billion industry with 10,000 jobs.

“I don’t know where the market will go after this,” Stock said. “Some loggers will focus more on other species of timber. I don’t think losing the pulp mill will decrease the price of low grade wood very much, but it could free up capacity at the Shelburne chipping plant.”

Stock said demand remains strong for good hardwood and softwood. But Baltic birch and tropical pine shipped here across the Atlantic are starting to give the domestic market some competition.

“Hard maple remains very strong and highly sought,” he said.

“The closure of the Berlin mill highlights the need to retain diverse markets for low grade wood,” Stock said. “These markets give land managers the ability to perform sustainable forestry, provide clean and renewable power as well as consumer products.”

The rest of the North Country got more good news March 9 when the Senate voted, 22-1, in favor of a bill letting towns with poor Internet service bond the cost to build their own broadband networks. Berlin has broadband, according to Mayor Bob Danderson, but the small towns nearby have weak service.

House Bill 653, co-sponsored by Sen. John Gallus, R-Berlin, faced opposition in legislative hearings from phone and cable firms, which warned that towns might lose money on the investment or give the private sector unfair competition. Gallus said an enormous amount of business takes place over the Web, and the North Country has had trouble competing.

“The Internet represents the future, and the North Country cannot afford to be left behind,” he said. “Business is exploding on the World Wide Web and small companies are popping up in rural areas that sell niche goods. The North Country needs every chance of economic development it can get.” – CHRIS DORNIN/GOLDEN DOME NEWS