Company renews SPSA offer

Published 11:12 pm Tuesday, December 30, 2008

A company barely six months old has offered to purchase the Southeastern Public Service Authority for about $205 million, saying it will provide the eight member communities with experience and lower costs.

The offer from ReEnergy Holdings LLC, which was first considered and rejected in August, comes with a price tag this time, which would be about enough to retire SPSA’s debt, the organization says.

“The board is currently taking it under consideration,” said Tom Kreidel, spokesman for SPSA. He did not know if the issue would be on an upcoming meeting agenda.

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“It’s real preliminary,” he said, acknowledging, though, that the offer is more serious now than it was in August.

The proposed privatization encompasses a proposal to acquire SPSA’s existing solid waste management system, and a proposal to the member communities — the cities of Suffolk, Franklin, Portsmouth, Norfolk, Chesapeake and Virginia Beach, along with Isle of Wight and Southampton counties — to enter into a new long-term waste service agreement.

SPSA was formed in the 1970s to allow area municipalities to cooperate on solid waste disposal, under the assumption that it would be easier and cheaper than to manage solid waste as separate entities.

However, high expenses and other poor fiscal practices have plagued the agency, and the organization has racked up a debt far exceeding $200 million.

SPSA discussed at its last meeting the possibility of selling off its assets to private companies and shutting its doors. Members seem to be leaning toward a less drastic measure, though, which would be to sell most of its assets and act mainly as a contracting agency.

ReEnergy Holdings is proposing the acquisition of all assets comprising the SPSA solid waste management enterprise.

It would assume closure and post-closure liability at the Suffolk landfill, draft new long-term waste service agreements with the member communities, and establish new fees for dumping trash in the landfill. The tipping fees charged to the member communities would be approximately 40 percent lower than SPSA’s projected tipping fee, according to information on ReEnergy’s Web site.

The company also would provide significant financial incentives to increase recycling, and officials say they’re committed to hiring as many of the current SPSA employees as they need.

A call to a local law firm, Kaufman and Canoles, which represents ReEnergy in the matter, was not returned by press time.

For more information about ReEnergy’s proposal, visit