The company that has operated Spokane’s electricity-producing trash incinerator on the West Plains for more than two decades is getting a pink slip.
Wheelabrator Technologies Inc. was advised Wednesday by Mayor David Condon that the city won’t be renewing the estimated $21 million-a-year contract when it expires in November. The city intends to take over all plant operations, which officials say will provide greater flexibility to address coming changes as Spokane turns over control of the regional trash system to Spokane County.
“After great thought and consideration, the City of Spokane has determined that it is in the best interest of the City to commence operations of the Waste to Energy Facility,” Condon wrote in a letter formally notifying the New Hampshire-based company of the decision. Condon hopes the company will be open to a new short-term agreement to help with the transition to city operations.
The city owns the plant but contracted with Wheelabrator in 1989 to design, build and operate it.
Wheelabrator’s regional vice president, Mike Burt, said Wednesday the company is proud of what it accomplished in Spokane with the Waste-to-Energy Plant and is open to working with the city in the transition period.
Although the city hopes to save money by operating the plant itself, the primary goal is to improve flexibility to deal with potentially less garbage being sent to the plant in the years ahead as several communities explore other options.
Under the contract with Wheelabrator, a subsidiary of Waste Management Inc., the city had to guarantee minimum tonnage each year and pay the difference if it fell short, a clause that hasn’t yet been triggered, said Ken Gimpel, who used to work at Waste Management before being hired by the city to run the regional trash system.
But with control of the trash system being handed to the county, the city had no way to predict or guarantee how much tonnage the plant might handle each year, Gimpel said.
Additionally, the contract provided Wheelabrator with a 20 percent management fee for overseeing capital projects at the plant, he said, and the day-to-day operating rate included compensation for the risk the company shouldered two decades ago during the design and building phase of the project. City leaders are hopeful they can save money by no longer having to pay those contract costs, while also avoiding the profit margin that private-sector contractors have to build into their rates.
Also, the city is preparing to hire the plant’s longtime manager, Chuck Conklin, who will need City Council confirmation.
The incinerator brings in about $6 million a year from the sale of electricity produced by burning the trash.