Waterville and Fairfield have joined a handful of communities as plaintiffs in a lawsuit against the majority owner of the Penobscot Energy Recovery Co. waste-to-energy plant in Orrington to recover hundreds of thousands of dollars they say were misappropriated to lobby in the Legislature for a bill they opposed.

The Municipal Review Committee, the umbrella group that represents 187 communities sending waste to the plant, filed suit last April against USA Energy LLC, a Minneapolis, Minnesota-based company, in Hancock County Superior Court. Five of those communities have joined the lawsuit.

The MRC alleges that USA Energy violated the PERC partnership agreement when it used municipal funding paid to the plant to pay off a $1.2 million bill for lobbying for a bill the communities were opposed to in 2013.

The member communities send their waste to PERC and pay a per-ton tipping fee, and in return get rebates from profit generated by the plant.

The arrangement might not last much longer. The contract between member communities and PERC lapses in 2018, and the MRC is pursuing a plan to build a state-of-the-art plant in Hampden to replace PERC.

The committee alleges that in 2013, USA Energy hired the Augusta lobbying firm Doyle and Nelson to support L.D. 1483 without consulting PERC’s oversight committee or the MRC, the communities’ representative on the committee. The oversight committee has purview over certain issues such as hiring legal counsel, the MRC argued.

The MRC and members were against the bill because it would provide a subsidy to USA Energy that could prolong the life of the Orrington plant artificially and cost communities up to $6 million in disposal expenses. A significantly altered bill eventually was signed into law in 2013.

In its lawsuit, the MRC claimed that USA Energy had violated the partnership agreement, and it asked the court for damages.

Greg Lounder, MRC executive director, estimates that as much as 41 percent of the money paid to lobby for the bill came from municipalities. The suit alleges that the MRC made its opposition to L.D. 1483 known in 2013, and USA Energy gave assurances that it would bear the cost of the effort alone.

In response to the lawsuit, USA Energy said it was exercising its authority as managing partner of PERC, and the MRC was interfering in its efforts to get reimbursement for its lobbying efforts.

The case was remanded to federal court last April. In November, USA Energy Group moved to dismiss the case, arguing that the MRC wasn’t an owner of PERC, and therefore it had no standing in the case. The 86 municipalities that first joined the MRC in the 1990s are considered equity charter members and together own about 23 percent of the PERC plant.

The federal court didn’t rule on the motion and remanded the case back to Maine’s business court, based in Portland.

Allison Economy, an attorney for Bangor firm Rudman Winchell, which represents USA Energy, declined to comment specifically on the case on Thursday.

“We have not yet seen the amended complaint, so it would be premature for us to comment on it at this time,” Economy said.

In order to give weight to the suit, the MRC began to ask some of its original members to sign on as co-plaintiffs, Lounder said. The MRC identified communities that were the most invested in the case, he added.

So far, Waterville, Fairfield, Orono, Bar Harbor and Mount Desert have agreed to sign on, Lounder said. It is unlikely that more communities will sign on because the 30-day window to file closes Monday, he added. The MRC will continue to cover the bills associated with fighting the lawsuit, and member towns will not occur any additional cost.

“The town of Fairfield believes the general partner has breached its fiduciary duty by inappropriately billing the partnership for legal fees and lobbying efforts,” Town Manager Josh Reny said in an email Friday. Reny is also vice president on the MRC executive committee.

The Fairfield Town Council voted to join the lawsuit at a meeting earlier this month.

Lounder estimates that Fairfield could have paid as much as $20,000 toward the lobbying.

“These efforts were opposed by the municipal limited partners, and the MRC was originally given assurances that USAE would pay its own bills,” he said. “But as it got expensive, the decision was made to begin billing the PERC partnership instead. As minority owners of PERC, money has effectively been taken from the towns without their consent to lobby for legislation the towns formally opposed.”

Mike Roy, the Waterville city manager, echoed Reny’s position. The Waterville City Council voted to join the lawsuit on July 21.

Peter McGuire can be contacted at 861-9239 or at:

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