Solid waste board begins searching for new options

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Lake County board members Ric Niemeyer (left) and Cliff Dugan (middle ) listen to Powers Energy owner Earl Powers during the Solid Waste board meeting held at the Lake County Government Complex on Thursday February 2, 2012. | Charles Mitchell~For Sun-Times Media

Updated: March 5, 2012 8:05AM

The future of the proposed garbage-to-ethanol plant is murky after the Lake County Solid Waste Management District board voted Thursday to serve the developer with a breach of contract notice.

For more than two hours, the board peppered Powers Energy CEO Earl Powers and COO Ken Bosar with questions about a new financing strategy, waste agreements with communities and the plant’s new timeline.

Powers announced he had come to an equity and debt-financing arrangement with Raymond James and Associates to pay for the $300 million plant, and how the company wanted garbage commitments from municipalities — totaling 2,000 tons of waste per day — by the end of March.

What does seem clear is that board members and employees were displeased Powers’ decision to leave the meeting while the board was deliberating.

Executive Director Jeff Langbehn was disappointed in Powers’ behavior.

“I think Mr. Powers owes the board and citizens of Lake County an enormous apology,” Langbehn said. “For him to just walk out of there, I found it to be rude and the epitome of arrogance.”

Powers did not return a message left for comment on Friday.

Langbehn said Powers has 60 days to respond to the notice and possibly come up with financing, then the board will take action on whether or not to terminate the contract.

“I’m very frustrated,” Langbehn said. “We’ve been told for two years ‘we’ve got financing done’ and that’s happened a dozen different attempts by (Powers’) own admission. Raymond James and Associates is a credible company, but the board is fair in wanting Mr. Powers make commitments.”

Lake County Councilman Rick Niemeyer, R-Lowell, became the board’s new chairman on Thursday, and he’s unsure whether Powers will have to reimburse the county for any planning costs. Outgoing chairman and Lake County Commissioner Gerry Scheub, D-Merrillville, estimated the amount that the county has spent on consultants and other items totaled $120,000.

“I don’t know,” Niemeyer said. “It’s kind of up to attorneys to decipher what the contract says. I know there was some upfront money paid by district, but that kind of set the tone for the meeting when (Powers) said he would reimburse the money when the financing deal comes through.”

Niemeyer said it was unfortunate that the meeting ended the way it did because the board “really believed in this project.”

Scheub spoke with Powers by phone after the meeting.

“I think Earl got just beat up and he didn’t know where to turn,” Scheub said. “I talked to him and he said that he’s going to pursue this with every ounce of energy he has.”

Scheub said the board had no choice but to pursue the breach of contract option.

“Due the economic downturn, he kept pushing (the financing) back,” Scheub said. “Were we patient? Yes, but we did not have any place left to go.”

Scheub said he wants the board to consider new proposals from other companies experienced in the garbage-to-ethanol business, but Niemeyer is unsure what direction the board will take.

“We need to go to Plan B — whatever that is,” Niemeyer said. “We’ll look into what kind of conversations Jeff Langbehn’s has had with other companies over past two or three years. The plan looks like it’s going nowhere, so we need to quickly decide at the February meeting where we want to go.”