FOREST CITY TOWNSHIP, Maine (NEWS CENTER) — Gov. Paul LePage is looking to bail out a Washington County paper mill by assuming ownership of a dam.

The mill claims the move will cost the company millions of dollars to maintain and operate because of what it calls "burdensome" federal regulations.

Woodland Pulp wants the state to take ownership of the Forest City Dam to avoid the federal regulations.

It's a small dam, part of it in the U.S., the other part in Canada. But it's impact to the paper mill and to dozens of seasonal homeowners up river on East Grand Lake is pretty big.

Woodland Pulp says the dam will cost it $6 million to operate over the span of its federal license. That's why it's asking state lawmakers to approve a bill to assume ownership.

"The state would not be transferred any cost associated with this because, in our view, the state would not be operating the dam as part of a contiguous hydropower system," said Scott Beal of Woodland Pulp.

Beal said they've invested $150 million in that mill and added 80 jobs in economically challenged Washington County. This bill would help protect the mill and the jobs. He said the alternative would be for the mill to surrender its federal dam license and remove the gates, dropping water levels upstream, which Woodland Pulp doesn't want to do.

"The dam needs to stay in place and Woodland Pulp fully recognizes that," said Beal, "We have no interest – absolutely no interest – in dewatering East Grand Lake."

Sam Greenlaw, who owns a summer home on East Grand Lake says he and many other seasonal homeowners fear what will happen to the lake if that happens

"Drawing the lake down will mean in front of my camp there will probably be 50-60 feet of new water," he said.

Greenlaw and others are also concerned about the bill asking the state to take control, saying there's nothing in it that states Woodland Pulp will continue to run and maintain the dam at no cost to the state.

"I don't see that mentioned in the bill," Greenlaw said, "and I don't see any agreement in place."

Lawmakers on the Inland Fisheries and Wildlife Committee also expressed concerns that they did not have an agreement before them yet, and there were too many unanswered questions about costs and ownership.

One other issue complicating matters: part of the dam is in the U.S. and the other part is in Canada. Woodland Pulp would continue to own the side of the dam that is in Canada. Maine would only own the part on our side of the border.