PITTSFIELD — The owner of Pittsfield’s aging waste-to-energy plant on Hubbard Avenue recently filed for bankruptcy, but Community Eco Power still is planning to operate the facility for the foreseeable future.
Mayor Linda Tyer and a lawyer who represents Community Eco Power in its Chapter 11 bankruptcy protection filing said the company plans to continue operating the 40-year-old facility through the current legal proceedings and beyond.
“That is absolutely the plan,” said attorney Sam Anderson of the law firm Bernstein Shur of Portland, Maine, which represents Community Eco Power. The company filed for Chapter 11 on June 25 in Massachusetts Bankruptcy Court.
“What they’ve told us is, this is a restructuring of their debt,” Tyer said.
In addition to keeping the plant open, Community Eco Power also plans to keep the workforce at its current level, Tyer said. As of June 18, Pittsfield’s plant had 21 employees. Six of them are salaried employees, while the remaining 15 receive hourly salary compensation, according to the bankruptcy filing.
Community Eco Power, based in North Carolina, purchased Covanta Energy Corp.’s waste-to-energy plants in Pittsfield and Agawam in 2019. The company filed for Chapter 11 because deferred maintenance on the Pittsfield facility was “a little bit higher than they expected it to be,” Anderson said. “Because of that, they had to take out loans.”
According to the filing, Community Eco Power diligently explored a “range of options” to address its cash-flow problems to satisfy its “debt and operational obligations” before deciding to file for Chapter 11.
Companies that file for Chapter 11 usually do so in order to stay in business. These cases often are referred to as “reorganization” bankruptcies because the debtor typically files a reorganization plan so that it can continue to operate and pay its creditors over time.
Community Eco Power filed for Chapter 11 while the city was negotiating its current waste-removal contract with the company. The negotiations had no bearing on Community Eco Power’s decision to file for bankruptcy, and they continue, Tyer said.
The city of Pittsfield is listed as one of the company’s 30-largest unsecured creditors in the filing. The city is owed $76,158 in water and sewer fees. Tyer said she believes that the money owed the city will be addressed in the restructuring plans.
“I’m sure that’s part of the restructuring of the debt,” Tyer said.
In its filing, Community Eco Power lists up to 200 creditors, and up to $50,000 in assets. The company also owes Cintas Corp. of Lee $25,492 in “trade debt” and Berkshire Bank $1.34 million through a Paycheck Protection Program loan it received through the bank during the second round of the program and that was guaranteed by the U.S. Small Business Administration.
Payment of that debt is subject to a forgiveness application that had not been resolved at the time Community Eco Power had filed for bankruptcy.
In summer 2016, Covanta announced that it planned to close Pittsfield’s plant by March 2017 because the facility’s size and high operating costs made it difficult to operate profitably. But, the city and Covanta later reached a deal to keep the plant open for four more years. The city agreed to appropriate $562,000 in Pittsfield Economic Development Authority money to upgrade the facility to state and environmental standards so that it could remain profitable.
Pittsfield’s waste-to-energy facility was built by Vicon Corp. in 1981. It was sold to Energy Answers in 1994, then came under Covanta’s ownership in 2007, when that company purchased Energy Answers.
According to Eagle files, Pittsfield’s waste-to-energy facility is one of the oldest such plants in the country.