Following a closed session, the Southeastern Public Service Authority announced it will go forward with the process of selling its waste-to-energy plant in Portsmouth.

“After reviewing draft contracts with the board during a closed session today, I have been directed to proceed with the process for the sale of the facilities to one of the two remaining prospective buyers, either Covanta or Wheelabrator,” said Rowland Taylor, executive director of the regional trash authority.

The authority has been working toward the sale of the plant for some time, said Tom Kreidel, spokesman for the authority. Monday’s move represented a milestone in the process, putting out the offer for the two companies to make formal bids, he added.

“What we will get back from this process will be a formal bid from these two companies,” he said.

The move is essential to the authority’s ability to stay afloat financially, since the operation is about $240 million in debt. A loan refinancing last month moved most of the authority’s debt to later years, freeing up money for use in the short-term. In addition, the city of Virginia Beach will be forgoing its tipping fee rebate for a year, but it will be expecting payback in 2010.

Covanta and Wheelabrator are expected to submit definitive proposals for the purchase of the plant by the middle of the month, after which SPSA staff will review them with advisors and consultants. Taylor will report back to the board in a meeting scheduled for later this month, and a public hearing on the proposal will be scheduled in August.