The two companies in a battle over reopening an idled paper mill in Millinocket have decided to change their public relations strategies.
The relationship between Cate Street Capital and Brookfield Renewable Energy Partners has become strained over the last month, with the companies sparring over issues in the Legislature and, increasingly, in the media over an electricity contract that is the nub of the dispute.
In his first comments to the Portland Press Herald, Daniel Whyte, senior vice president of Brookfield Renewable Energy Partners, said he is more open to commenting in the media because of “outrageous and offensive” comments by Elizabeth Baldacci, spokeswoman for Cate Street Capital, to the Press Herald in an April 13 article. She blamed Brookfield for delaying negotiations to reopen the Great Northern Paper mill and put 200 employees back to work.
After shielding its executives from the media, Cate Street Capital, the New Hampshire-based private equity firm that manages Great Northern Paper, hired a new public relations firm in Maine and started making its executives available to the media.
Likewise, Toronto-based Brookfield Renewable Energy Partners until recently commented only through its Portland attorney, Harold Pachios.
Whyte said Baldacci’s comment was uncalled for, especially since his company has an electricity contract with Cate Street Capital.
“It’s our belief there is no disagreement. We have a contract. It may be one party wants to change that contract, and has gone to extraordinary means through the Legislature to change that contract, but we have an agreement,” Whyte said.
Whyte wrote an op-ed column in response to Baldacci’s comment. The Press Herald published the letter on April 17.
Ned Dwyer, president of Great Northern Paper, told the Press Herald that he wrote his own op-ed after reading Whyte’s, but never sent it in, opting instead to try to get back on a positive path.
“I’m not trying to heat this up. I don’t think we’re trying to heat it up. I want to get my guys back to work and the path to getting my guys back to work is through an agreement with Brookfield … and I need to stay focused on that,” Dwyer said. “I don’t think it’s at an impasse. I think it’s a difficult negotiation.”
Baldacci responded Wednesday to Whyte, softening her tone.
“The delays in reaching an agreement with Brookfield have delayed the restart effort as a whole, but Great Northern Paper remains hopeful that a resolution will be reached between both parties in an effort to put employees back to work,” she said in a prepared statement. “That’s why everyone is here – to see people return to work.”
Dwyer said there was no date to restart the mill, as of Tuesday.
Great Northern Paper closed the mill in January because of high operating costs and soft demand for its newsprint. Dwyer said the company’s new business plan would reduce labor and wood costs, but not energy costs.
That objective requires a renegotiated power-purchase agreement with Brookfield, which owns 39 hydro stations on six rivers in Maine. Dwyer said a renegotiated contract is “absolutely critical” to restarting the mill, but the prospects for an agreement are unclear.
At the root of the issue is something called load shedding, which would allow Great Northern Paper to reduce its production at times of peak electricity demand so Brookfield could redirect that electricity onto the wholesale market for a significantly higher price. Brookfield would share some of its profits with the mill.
However, the 10-year contract signed by the two parties in 2011 allows Brookfield to sell any power not purchased by Great Northern Paper. The paper company wants any load-shedding agreement to be retroactive to late January, when it idled the mill.
Cate Street Capital tried to get a bill passed in the Legislature to force Brookfield Renewable Energy Partners to share those profits, but it was watered down in committee. The resulting bill, signed into law by Gov. Paul LePage, primarily reiterates the Legislature’s desire that the parties reach a resolution that restarts the mill.
Brookfield has made clear that it won’t hand over its revenues, which Whyte pointed out were gained based on the existing contract. However, Whyte said Brookfield remains committed to helping the mill find its footing. To that end, it has offered to forgive $2.5 million in unpaid electricity bills that Great Northern Paper has accumulated since December.
Whyte said his company also is open to discussing short-term load-shedding agreements in the future. But the offers come with two conditions: Cate Street Capital must share financial information that proves it has a viable business plan, and it must reopen the mill.
Cate Street Capital has refused to share more financial information, claiming it has enough to make a decision.
Dwyer acknowledged there has been no progress in Great Northern Paper’s discussions with Brookfield, but the self-identified optimist said he remains “hopeful” that a deal can be struck that will benefit both parties and allow the mill to reopen.
Whit Richardson can be reached at 791-6463 or at: