Proposal promises free trash disposal

Published 9:00 pm Monday, November 9, 2009

Suffolk would continue to get free disposal of its garbage under a purchase proposal presented to the Southeastern Public Service Authority by a New York-based company this week.

ReEnergy Holdings LLC amended and expanded upon a proposal it submitted to the troubled regional waste authority in July, answering questions and attempting to allay the concerns of SPSA’s member communities.

The company was one of two that submitted proposals to purchase all of SPSA’s assets. Wheelabrator Technologies Inc., a New Hampshire-based company, delivered its own proposal late Monday afternoon. Wheelabrator also has an offer of $150 million on the table to purchase SPSA’s waste-to-energy incinerator in Portsmouth.

The Authority’s board of directors has given tentative support to that bid, but members put a final decision on hold in order to consider ReEnergy’s offer. During a mandated 45-day waiting period, the company updated its offer based on discussions with officials from SPSA member communities, and other companies were given a chance to submit competing bids. Wheelabrator was the only competitor to do so.

ReEnergy officials spent some time Monday afternoon explaining their proposal to the media. Among the significant hurdles the original proposal faced, CEO Larry D. Richardson said, was insistence by Suffolk and Virginia Beach that they not pay more to dispose of their garbage under ReEnergy’s operation of the regional waste system than under the existing SPSA agreement.

Suffolk’s agreement with SPSA allows it to dump trash at the regional landfill for free, in exchange for hosting the facility. Virginia Beach worked out a deal at the Authority’s inception whereby it gets reduced tipping fees at the landfill.

Richardson said Monday that all of the participating communities would pay tipping fees under the ReEnergy plan. But Suffolk and Virginia Beach both would get host fees and upfront payments that should negate any extra costs.

It was unclear Monday evening whether such an arrangement would eliminate the potential need for the city to begin charging residents for trash disposal, as was discussed by the Suffolk City Council in September.

That decision could depend on the city’s choice regarding another part of the ReEnergy plan, if accepted. The updated proposal gives participants at least two dates — 2018 and 2024 — when they could choose to part ways with ReEnergy. Opting out at either of those times would require the community to make a payment to the company, and a shorter up-front contract would result in higher tipping fees.

But even if the city chose to part ways with the company, the landfill would continue to be the company’s to run and maintain — and Suffolk would continue to receive payments for hosting it.

In any case, tipping fees would be dramatically lower than their current levels, he said. The proposal shows tipping fees dropping from their 2012 projected level of $119 per ton to a post-purchase level of $93.50 per ton, adjusted each year based on the Consumer Price Index.

The company would pay $240 million for SPSA’s assets and has promised tens of millions of dollars in improvements to the Authority’s infrastructure.

“We believe the numbers do work,” Richardson said durin