MILLINOCKET -- Some town councilors are proposing seizing the Katahdin Paper Co. mill, which is due to close this week because of the high cost of oil, but Gov. John Baldacci is urging them to move ahead with the idea only as a last resort.

Town Councilor Scott Gonya, who's also a millworker, said Millinocket should consider using eminent domain to seize the mill and its generators, which make about 37 megawatts of electricity, and turn the generators into a public utility.

The mill is owned by Brascan Corp., now Brookfield Assets Management, of Toronto. The company has said high energy costs were a key factor in the decision to close the mill, which will put about 200 people out of work.

Some of the other councilors have endorsed the eminent domain idea, which Gonya said would slash town utility rates while generating as much as $14 million in electricity sales on the New England power grid and drawing other industries to the northern Maine town.

Town Council Chairman Wallace Paul and other councilors agreed to meet with company officials, unions and state officials to discuss eminent domain, continuing mill operations and other options for the mill's future, but no date has been set.

Gov. John Baldacci is urging the Millinocket officials to move ahead cautiously.

In a statement issued through spokesman David Farmer, he said eminent domain is "a very controversial tool for government. It should be used only when absolutely necessary and under specific circumstances.

"The governor believes that the best approach to get the mill reopened is to work cooperatively with the company. Any other means shouldn't be considered until those efforts have run their full course."

Baldacci believes the company has a commitment to reopen the mill. Workers say they will produce remaining orders this week and begin mothballing the mill for a reopening.