SPSA considers buyout

Published 8:43 am Friday, September 25, 2009

CHESAPEAKE — The Board of Directors of the Southeastern Public Service Authority voted unanimously Wednesday to review and consider a New York company’s proposal to purchase all of the garbage agencys assets for $243 million.

The board also agreed to post the proposal of ReEnergy Holdings LLC 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 member localities.

Wednesday’s vote stipulated, however, that the move not be misconstrued 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 on March 1.

“We’re going to do our fiduciary duty,” said Franklin City Councilman Barry Cheatham, a member of the SPSA board. “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.

Cheatham cautioned that the debate over ReEnergy’s bid should not end with the tipping fee the company has proposed.

“You can’t just look at the tipping fee,” he said. “They are heavily leveraged. What will happen to the tipping fee if they can’t get the bonds at a low rate? There’s a lot that needs to be reviewed and discussed. That¹s what we’ve said all along we’re going to do, and we just confirmed it today.”

Delegate John Cosgrove (R-Chesapeake), who wrote the law that will overhaul the SPSA 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 member communities, including Franklin, 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.