Monday, May 12, 2008

Wood pellets for Maine

Few names in New England business circles elicit notice like Les Otten’s. Otten, best known for his role in the ski industry, as the founder of American Skiing, got his start in the industry, when he purchased the struggling Sunday River Resort in 1980. He parlayed this initial investment (funded by selling scrap metal, copper wire, and used bulldozer blades) into the foundation that eventually became American Skiing Co., which purchased Maine's Sugarloaf ski resort and resorts in five other states. Otten was eventually forced out of American Skiing and became a minority partner of the Red Sox before selling his stake in the club last year.

Much of Otten’s success in the industry stemmed from his marketing savvy, as well as his commitment to the development of snowmaking technology. By the end of the 1990s, Sunday River boasted New England's largest and most powerful snowmaking technology in a computer-driven system that turned on compressors and pumps capable of driving 65,000 cubic feet of air and 9,000 gallons of water per minute through 72 miles of steel pipe to produce snow. This system, developed in-house, was the world's largest high-pressured snowmaking system and was used exclusively at ASC's resorts.

While Otten has his critics, no one can accuse him of standing pat. That’s why his latest venture, Maine Energy Sytems, which hopes to convince over 40,000 homeowners in Maine to convert from oil, to wood pellets, is so compelling.

With oil prices north of $120/gallon, and with 80 percent of Maine homes heated by oil, or kerosene, Otten may be onto something with his latest business venture.

Otten is the lead investor in Maine Energy Systems. His partners are William Strauss, president of the FutureMetrics financial forecasting firm, and Harry "Dutch" Dresser, a former Gould Academy associate headmaster.

The business plan calls for Maine Energy to sell fully automated boilers made by Bosch Thermotechnologies, an arm of the large German appliance maker. The technology is far different from traditional wood boilers, which require users to keep cords of wood and feed the wood into the furnace by hand. Instead, a fleet of delivery trucks will pump pellets into storage tanks, where they can be automatically fed into the boilers, Otten said. The boilers produce less pollution and less ash residue than outdoor boilers and conventional wood stoves because they use a refined product that is burned at high temperatures, he added.

While no one knows whether oil will continue to escalate in price, or whether a price drop will negate the attractiveness of this venture. Also, does Maine have the workforce that can support the training of a fleet of certified technicians that will be required to install, as well as service this network of homes converting to wood pellets?

Regardless of the outcome, this kind of bold vision, and forward-thinking attitude is exactly what Maine needs more of. Rather than wringing hands, or bemoaning the lack of economic opportunities (or high taxes), we need to create revenue, and ventures like this one have the potential to do so.

[Portions of this post were culled from an Associated Press article that ran, May 9, as well as information found at FundingUniverse.-JB]

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