SPSA will consider buyout offer
Published 6:44 pm Wednesday, September 23, 2009
CHESAPEAKE — The Board of Directors of the Southeastern Public Service Authority voted unanimously Wednesday to review a New York company’s proposal to purchase all of the authority’s assets for $243 million.
The board also agreed to post the ReEnergy Holdings LLC proposal online, and to receive public comments and competitive bids for the next 45 days.
“We are very pleased that the board has voted to post our proposal,” said Larry Richardson, the principal and executive officer for ReEnergy. “This allows us to address all of the questions that were posed by the board, and also in the comment letters that were submitted (by the member localities).”
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Wednesday’s vote stipulated, however, that the move should not be construed as an attempt to derail a competing offer for the authority’s waste-to-energy incinerator and facilities in Portsmouth.
The board voted Sept. 9 to tentatively accept a $150 million offer from Wheelabrator Technologies Inc. of Hampton, N.H., for the incinerator. Wheelabrator’s offer expires March 1.
“We’re going to do our fiduciary duty,” Franklin City Councilman Barry Cheatham said. “We need stronger numbers (from ReEnergy) to make sure what they are proposing either is or is not beneficial for the people we represent.”
Richardson said his company, which is based in Latham, N.Y., would address the issues raised by the board and the localities, and would return with a refined, final proposal by the end of the 45-day period.
“We certainly believe (our final proposal) will present compelling economic advantages for the member communities,” Richardson said.
In a Sept. 8 letter to SPSA Executive Director Bucky Taylor, Suffolk City Manager Selena Cuffee-Glenn raised concerns about the tipping fee Suffolk could be required to pay for disposing of trash at the landfill under the ReEnergy proposal.
Noting that the proposal anticipates Suffolk receiving an unspecified host fee for allowing the landfill to be operated within the city, Cuffee-Glenn wrote that the city would want to know whether the host fee would offset Suffolk’s tipping fees.
Isle of Wight officials wrote that they were unwilling to commit to the 20-year agreement stipulated by ReEnergy.
Other SPSA member municipalities have raised concerns about one private entity having control of all of Hampton Roads’ trash disposal services.
Delegate John Cosgrove (R-Chesapeake), who wrote the law that will overhaul the Board of Directors on Jan. 1, said he was pleased with the current board’s decision to consider the ReEnergy proposal.
“I think the board is meeting the intent of the legislation,” Cosgrove said.
“There are a lot of unanswered questions about the ReEnergy proposal. I think there are also a lot of unanswered questions about the Wheelabrator proposal. This is going to be a good opportunity to look at both proposals and find out which one is actually better. The public will have a chance to really look at both of them.”
Cosgrove added, “Whatever the board comes up with, it’s their responsibility, but at least they’re giving everybody a shot.”
In other news, the Board of Directors voted Wednesday to delay shutting down the authority’s recycling programs until March 31. Postponing the shutdown would give SPSA’s eight member communities more time to find alternative vendors to handle their recyclables.
The board also voted Wednesday to move forward with a proposal to sell gas from the SPSA landfill in Suffolk to a company called Suffolk Energy Partners LP. SEP made an unsolicited bid for the landfill gas earlier this year and is so far the only company interested in purchasing it.
The gas would be used to power a cogeneration plant that would produce steam and electricity that could be used by nearby Ciba Corp. Excess electricity then could be sold onto the power grid.
— Managing Editor Res Spears contributed to this story.