MOOSE RIVER — Having struggled the past several years, one major employer and lumber producer is now stepping up as a prominent competitor as it becomes the first sawmill in Maine to generate its own electricity.

Moose River Lumber Co. will soon not only produce enough lumber to construct 10,000 homes a year, it will also make its own electricity while doing so. The $1.4 million cogeneration project this spring will produce 40 percent of the company’s power, making it greener and more competitive over the long-term, Sales Manager Steve Banahan said.

“It’s the right thing to do, and it’s a cost savings over time,” he said.

Moose River Lumber is north of Jackman — 56 miles from the next town and 75 miles from the nearest stoplight — but its 85 million board feet of lumber produced each year have helped frame houses across the country.

When house construction projects fell several years ago, “demand went down by 400 percent overnight,” Banahan said.

Business is now stabilizing, and the sawmill is investing in a turbine that will spin from steam already produced by a biomass boiler. The turbine and a connected generator will eliminate about $400,000 from electric bills every year, said General Manager Jeff Desjardins.

Cogeneration will help the mill keep its lumber prices low as well as competitive with Canadian mills, according to Peter Lammert, wood to energy specialist with the Maine Forest Service. It will also allow the mill to operate when the electricity goes out — something that can harm the pine lumber drying process.

The company, with 80 full-time employees, installed a biomass boiler two years ago to eliminate up to 700,000 gallons of heating oil a year, Desjardins said. Burning dry shavings and green sawdust mix, the boiler produces steam, which heats the buildings and kilns.

When the five-by-10-foot combined turbine and generator is running this May, it will convert the boiler’s steam into electricity. The electricity, in turn, will “run the boiler, kilns, lights, air compressors — 24 hours a day, seven days a week,” Desjardins said.

The dry shavings that feed the boiler come from the mill’s planer, used to make rough lumber smooth. The sawdust is created when logs are cut into lumber.

Because the mill would normally sell those raw materials, the cogeneration project will reduce what it has available for market. But customers will “still be able to get what they need,” Desjardins said.

While the company could produce enough power to sell back to Central Maine Power Co., it would not earn enough to recoup its costs, Banahan said. But he looked to the positive: When the cogeneration project is complete, Moose River Lumber will run entirely on renewable energy. The remaining 60 percent of its power comes from Harris Station Dam on the Kennebec River.

The cogeneration project is partly funded by a $400,000 grant from a Northeast program called the Regional Greenhouse Gas Initiative and is handed down by Efficiency Maine. Irving Forest Products in Dixfield also received a grant for a cogeneration project, which won’t begin until after Moose River Lumber’s, Banahan said.

Robbins Lumber Company in Searsmont has the equipment for cogeneration but does not use it because of a cheaper electricity rate, Lammert said.

The two projects in Moose River and Dixfield will keep an estimated 4,231 tons of carbon dioxide out of the atmosphere each year, according to Efficiency Maine. Thermal Systems Inc. of Scarborough is installing the equipment at both mills.

Right now, Moose River Lumber is ready for cogeneration. The building is in place, along with substructures, piping and electrical components. All it needs is the turbine, and “as soon as we get it, we can plug it in and go,” Desjardins said.

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