Waste Management 2013 Annual Report Download - page 97

Wheelabrator. As of December 31, 2013, we owned or operated 16 waste-to-energy facilities and four
independent power production plants (“IPPs”) which are located in the Northeast, in the Mid-Atlantic, and in
Florida, California and Washington.
At our waste-to-energy facilities, solid waste is burned at high temperatures in specially designed boilers to
produce heat that is converted into high-pressure steam. As of December 31, 2013, our waste-to-energy facilities
were capable of processing up to approximately 23,000 tons of solid waste each day. In 2013, our waste-to-
energy facilities received and processed 8 million tons of solid waste, or approximately 21,000 tons per day.
Our IPPs convert various waste and conventional fuels into steam. The plants burn wood waste, anthracite
coal waste (culm), tires, landfill gas and natural gas. These facilities are integral to the solid waste industry,
disposing of urban wood, waste tires, railroad ties and utility poles. Our anthracite culm facility in Pennsylvania
processes the waste materials left over from coal mining operations from over half a century ago. Ash remaining
after burning the culm is used to reclaim the land damaged by decades of coal mining.
We generate steam at our waste-to-energy and IPPs facilities for the production of electricity. We sell the
electricity produced at our facilities into wholesale markets, which include investor-owned utilities, power
marketers and regional power pools. Some of our facilities also sell steam directly to end users. Fees charged for
electricity and steam at our waste-to-energy facilities and IPPs have generally been subject to the terms and
conditions of long-term contracts that include interim adjustments to the prices charged for changes in market
conditions such as inflation, electricity prices and other general market factors. In recent years several of our
long-term energy contracts and short-term pricing arrangements expired, significantly increasing our waste-to-
energy revenues’ exposure to volatility attributable to changes in market prices for electricity, which generally
correlate with fluctuations in natural gas prices in the markets in which we operate. Our market-price volatility
will continue to increase as additional long-term contracts expire. We use short-term, “receive fixed, pay
variable” electricity commodity swaps to reduce the variability in our revenues and cash flows caused by
fluctuations in the market prices for electricity. Refer to the Quantitative and Qualitative Disclosures About
Market Risk section of this report for additional information about the Company’s current considerations related
to the management of this market exposure.
In 2013, we continued to look at opportunities to expand our waste-to-energy business. In recent years, we
have partnered with third parties to invest in the expansion of waste-to-energy assets and services in the United
Kingdom and China. While there has not been any meaningful expansion of the network of waste-to-energy
disposal facilities in the U.S. during this time, we have invested significant efforts in Europe and China to further
develop these assets. We have made investments in partnerships and joint ventures in the United Kingdom and
China in order to use our expertise as an owner and operator of waste-to-energy facilities to participate in this
growth opportunity. The investments we have made are discussed further in Note 20 to the Consolidated
Financial Statements.
Recycling. Our recycling operations provide communities and businesses with an alternative to traditional
landfill disposal and support our strategic goals to extract more value from the materials we manage. In 2001, we
became the first major solid waste company to focus on residential single-stream recycling, which allows
customers to mix recyclable paper, plastic and glass in one bin. Residential single-stream programs have greatly
increased the recycling rates. Single-stream recycling is possible through the use of various mechanized screens
and optical sorting technologies. We have also been advancing the single-stream recycling programs for
commercial applications. Recycling involves the separation of reusable materials from the waste stream for
processing and resale or other disposition. Our recycling operations include the following:
Materials processing — Through our collection operations, we collect recyclable materials from
residential, commercial and industrial customers and direct these materials to one of our MRFs for
processing. We operate 120 MRFs where paper, cardboard, metals, plastics, glass, construction and
demolition materials and other recyclable commodities are recovered for resale. We also operate five
secondary processing facilities where recyclable materials can be further processed into raw products used
in the manufacturing of consumer goods. Materials processing services include data destruction and
automated color sorting.
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