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Wheelabrator purchases Virginia waste facilities

Wheelabrator Technologies Inc., a wholly owned subsidiary of Waste Management, has purchased the Southeastern ...


Wheelabrator Technologies Inc., a wholly owned subsidiary of Waste Management, has purchased the Southeastern Public Service Authority’s (SPSA) Refuse Derived Fuel (RDF) plant and adjacent waste-to-energy facility in Portsmouth, Virginia.

The closing of the sale follows votes taken by the SPSA Board of Directors on April 28, 2010, as well as transfer of $150 million in funds from Wheelabrator to SPSA and recording of a deed of sale of the plants.

The purchase concludes a lengthy process that commenced more than two years ago when SPSA began consideration of a proposal to sell the two plants in order to reduce debt and operating costs and draw on the expertise of a private vendor. Three other companies submitted competing bids. After narrowing the candidates to two, the Authority chose Wheelabrator on November 17, 2009. A newly constituted SPSA Board, which took office January 1, 2010 as a result of a change in state law, continued the sale process, ending with the Board votes on April 28, 2010.

SPSA will use the $150-million from the sale to pay down debt to the Virginia Resource Authority (VRA) and other lending institutions, and repay money owed to the City of Virginia Beach.

“A competitive procurement process and rigorous negotiations between SPSA and Wheelabrator have produced a sale contract of the Portsmouth facilities that is fair for all parties,” says Rowland Taylor, SPSA executive director. “The sale to Wheelabrator establishes a predictable, affordable service fee, and upholds all current member community agreements.”

The sale contract also allows SPSA member-communities to seek alternative waste disposal options in 2018, or negotiate new service contracts with Wheelabrator beyond that date to continue using the waste-to-energy system.

SPSA may also extend the Service Agreement with Wheelabrator for an additional 10 years through 2028 in the event its member communities decide to renew or extend their Use and Support Agreements with SPSA and continue delivering their municipal solid waste through SPSA system beyond the current expirations in 2018.

As a result of the transaction, 164 SPSA employees at the two Portsmouth facilities will become Wheelabrator employees. Wheelabrator also plans to invest more than $20 million in capital improvements.

“This is a very exciting day for our company and we welcome all new employees to Wheelabrator,” says Mark Weidman, president of Wheelabrator Technologies. “Waste-to-energy is a growing industry worldwide, and our new employees will be joining us in expanding our business in the U.S. We will be investing in the plants to ensure reliable performance for the long-term future in full compliance with all permits.”

Another benefit from the sale is a Lease and Good Neighbor Agreement with Portsmouth and the settlement of SPSA’s outstanding dispute with Portsmouth relating to Portsmouth’s claim for payments in lieu of taxes.

“We are very happy that Portsmouth will be our host community,” says Weidman. “Wheelabrator has already begun to develop a strong relationship with the Cradock neighborhood, where the plants reside, and we intend to be a long-term partner in Portsmouth’s charitable, community and environmental activities.”


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