Darren Fishell

Darren Fishell

Business Intelligence Developer

The biggest stories out of my notebook (and a little beyond) in 2017

Written on January 1, 2018

It was a busy and endlessly distracting news year (even including the 86 days President Trump went golfing). So – partly for my own accounting – here’s a rundown of the top stories from 2017, guided by my own notebook and a review of all the various things I filed this year (warning: there’s a ton).

The big jobs picture

Maine’s job total finally climbed out of a pit since the start of the Great Recession, after 109 months. The job recovery took four times longer than any recent recession on record.

Unemployment remains near record lows, at 3.3 percent in November. But that job recovery has been uneven. Job estimates through 2016 showed that Maine’s metro areas had already recovered, but the state as a whole still lagged behind.

In another sign of recovery, foreclosures by Maine banks dipped back to pre-recession levels. GDP had recovered in 2016, but state sales tax figures showed regional disparities, with some rural areas lagging furthest behind.

The tight labor market posed challenges for the state’s tourism businesses during the summer, which were exacerbated by new limits on the number of seasonal foreign workers allowed into the country.

Competitive electricity providers

Companies selling electricity continued to cost Maine customers, to the tune of about $38 million in 2016. Since 2012, the numbers about $98 million taken out of household budgets. That’s money otherwise spent on… well, household budgets – groceries, clothes, maybe even savings.

The big cash involved has kept my eyes on this story, which I first reported on in an investigation published in 2016. The cost grew dramatically in 2015 and 2016 and in subsequent reporting.

It’s still the story I’m proudest of – the Legislature passed new consumer protections, with little controversy – and a class-action lawsuit the story prompted is still working its way through federal court.

Mergers and acquisitions

Plenty more firms were bought and sold than got news coverage, for sure, but there were a few unescapable M&A stories. The big one right in front of the news business was the merger of Maine Today Media and the Sun Journal. That got a feature from The New York Times, too.

A note on that: when I talked to Reade Brower about the move, much of the business case involved merging the two companies’ commercial printing operations, which were competed out of Brunswick and Lewiston, respectively. Naturally, as we’ve got newspeople covering news about the news, the focus is on the news side. But I think the commercial printing aspect is important, too.

But the largest deal of the year was FairPoint Communication’s sale to the Illinois-based Consolidated Communications, offering an exit for those who bankrolled FairPoint through its Chapter 11 bankruptcy reorganization and a few unprofitable years. The company’s kept its overall “synergy” plans for Maine under wraps for now, but it committed to $52.2 million in investment in Maine through 2019 to get approval for the sale.

The Madison-based Backyard Farms became part of North America’s largest greenhouse vegetable growing company in June, when it was purchased by the Canadian Mastronardi Produce, for an undisclosed price. Elsewhere in Madison, a tale of undesirable acquisition activity: the shuttered Madison Paper mill was sold off in pieces at auction, rather than as a going concern. That was the plan when a group of asset liquidators bought it at the end of 2016. A group of New Jersey investors bought the hydropower assets in August.

The Portland digital gift card startup CashStar also sold for $175 million to the California-based Blackhawk Network in August.

In a transaction few people should notice, a real estate investment trust in April sold Sugarloaf and Sunday River ski resorts to a subsidiary of Och-Ziff Real Estate. Operator Boyne Resorts has a lease to keep operating the mountains for more than 30 years.

Mainebiz reported overall M&A activity this year was way up, also including Pineland Farms’ $115 million sale to Bob Evans Farms Inc., and the $85 million sale of Bangor television station WABI to Gray Television Inc., of Atlanta.

Stored Solar’s big plans fizzle in East Millinocket

The company restarting two defunct wood-to-energy plants in Maine continued to fascinate me, for the grandiosity of their vision and extent of the financial challenges they face. Oh, and the public money they’re due to receive.

That commitment of public money hasn’t lived up to its economic promise to the loggers who called for assistance amid the continuing collapse of the state’s pulp and paper industry. Where are softwood species to go?

Allegations of non-payment from Stored Solar persisted throughout the year, but the company’s hung on. Efforts in Ashland to make ReEnergy’s standalone biomass plant sustainable reflect some of the challenges for those operations.

Earlier in the fall, I visited the company’s West Enfield plant and explored some of their new plans for getting those plants in motion, with apparent help from Gov. Paul LePage’s administration.

Company officials didn’t talk to me when I visited, but they did reach out to the Portland Press Herald after my story ran. It’s a regular response for companies to offer access to competing papers after unfavorable coverage. I don’t like it, which I ranted about on Twitter.

Paper industry declines and Sappi’s big investment

A number of former paper mill sites worked their way into or through limbo in 2017, in Old Town, Lincoln, Bucksport, East Millinocket and Millinocket and Madison. Some are closer to their next chapter than others, but the industry’s decline remained a story to watch.

In Rumford, the Canadian papermaker Catalyst unveiled big plans to add tissue paper production, if they can put together financing with the help of Maine taxpayers. At year’s end, they were still waiting to go back to the Finance Authority of Maine with their request for a second piece of the financing puzzle.

In positive mill news, Sappi announced a plan to invest $165 million into its Skowhegan mill to expand their consumer packaging product line, in a shift away from declining markets for paper and publishing uses.

Big energy policy fights

Maine’s electric rates are going up next year, with a coming rise in power supply prices likely more increases on the other side of the bill, to support maintenance of the grid. Unitil, the gas utility serving Portland and environs, also started looking for a big rate increase this year.

Rising electricity costs are what over years drove the municipal utility Houlton Water Co. to look east across the border and decide to drop it’s U.S. grid connection altogether. The utility got approval to unplug from Maine’s grid in February. Local infrastructure costs also drove residents of Swan’s Island to disband their local electricity co-op in favor of becoming part of the mainland.

That’s against a backdrop of relatively stable energy prices during the term of Gov. Paul LePage, who made energy prices a key priority in his campaigns, but he’s had few policy successes, as I chronicled in a September story. That involved a full rundown of energy policy during his tenure.

Meanwhile in the Legislature, a debate over compensation for small solar power generators again drowned out much other energy policymaking.

Despite decisions the residential solar industry saw as a setback, some of the state’s first grid-scale solar projects moved ahead. Cianbro’s Pittsfield plant was due to enter service this month, a project in Madison was finished in January, South Portland fired up a municipal system and Kennebunk has plans for the same (there’s still more, but don’t make me list them all).

Taking a broader view, I wrote in February how a battery installed at the site of an oil-fired NextEra plant in Yarmouth illustrates some of the broadest challenges for New England’s natural gas-reliant fleet of generators. Tux Turkel at the Press Herald had an earlier story detailing the battery project.

The year also set up debates about offshore wind and shed light on delays for another pioneering Maine energy technology. In March, we found out that bad waterproofing led to major delays for Ocean Renewable Power Co.’s tidal generator in Cobscook Bay, the first in the Western Hemisphere to put power onto the grid.

Regionally, the project Maine regulators favored as a way to increase natural gas capacity into New England withdrew from the federal permitting process.

And a local debates continue to brew over an offshore wind pilot project, located off the coast of Monhegan Island. The governor’s energy office has set up opposition from another angle, raising objections in May to the price.

In energy politics, lawmakers confirmed LePage’s appointment of old-school Democrat and attorney Barry Hobbins as the Public Advocate, leading an office of attorneys and analysts who represent customers in utility cases before the Maine Public Utilities Commission.

LePage’s former attorney, Carlisle McLean, also resigned as a PUC commissioner, taking a job with Central Maine Power Co.’s parent firm, Avangrid. LePage successfully nominated Sappi Paper manager Randy Davis to fill the vacancy.

How will Maine legalize it?

After months of listening and study, Maine’s legalization process remains in a bit of limbo. So, the story for 2017 was one of pot gift-giving stories, municipal bans or restrictions, and some planning by pot entrepreneurs.

And then there’s startups like Elevation 207 that aren’t waiting for that rulemaking to build their business (USA Today profiled the business in July).

Elsewhere, there are clues in places like the Secretary of State’s Corporate Registration search and real estate brokers in states that legalized (I’ve not yet been able to find any meaningful research on this through registries of deeds). I took a look at registered cannabis businesses in January and it made clear then some of the people putting their hats in the ring.

As a sign of how far that’s come, there were roughly 18 business registered with “cannabis” or “marijuana” in their names in January. There’s now 79 with some variant of “cannabis” alone. Check out the search yourself.

For what’s next, keep an eye on reporters Chris Cousins at the BDN and Penelope Overton at the Portland Press Herald. Also, the PPH this year launched a http://www.pressherald.com/maine-cannabis-report/ newsletter, edited by (my former boss at Mainebiz) Carol Coultas, so you know it’s good.

Elsewhere in the notebook

Maine-based breweries continued to chip into the market share of the big guys, but Anheuser Busch InBev brands still made up about half of Maine beer sales.

New tariffs on softwood lumber left many Maine sawmills in a bind, as all but one company has operations on both sides of the border. BDN writer Chris Burns had a great piece at the end of 2016 documenting the longer history of the trade dispute.

Amazon and AirBnb began taxing in-state sales in 2017, though a “Netflix tax” on streaming video and audio services didn’t make it to the final version of the two-year state budget.

Some personal job news

I joined the BDN’s Maine Focus team in September, starting in on an ongoing series about education in Maine. Reporter Matt Stone found the state’s falling short for pre-school students with special needs and took a deep dive into Maine’s confusing history of education policy reform.

We pulled together a wide range of data on Maine schools showing a correlation between school poverty levels and college completion and separately how some correlations (like teacher education levels) don’t necessarily mean higher college attainment.

We also found some problems with state data along the way.

Reporter Tyler-Blint Welsh then looked at a batch of schools in Aroostook County that are beating the odds in sending many to college, but not doing as well having them complete a degree.

We also looked at schools in our aging state that have shrunk the most and lessons from an initiative to get parents more involved in the education system in Portland.

Still more to come on this front as we close out the series and 2017.