Waste Management to sell Wheelabrator

By Staff | September 25, 2014

Waste Management Inc. recently announced an agreement to sell its waste-to-energy (WTE) business, Wheelabrator Technologies Inc., to an affiliate of Energy Capital Partners for $1.94 billion. The transaction is expected to close during the last two months of the year.

Wheelabrator owns or operates 17 WTE facilities and four independent power-producing facilities in the U.S. that process more than 7.5 million tons of waste and have a combined electric generating capacity of 853 MW. It also has four ash monofill landfills, three transfer stations and an ongoing development and construction project in the U.K. During 2013, the business generated approximately $845 million in total revenue.

During a call to discuss WM’s second quarter results, David Steiner, president and CEO, explained  the WTE business has two distinct components; the tipping fees MW receives on the front end, and the payments for energy on the back end. “We did not view the energy payments as strategic,” he said. As part of the transaction, Steiner said WM has entered a front end wastes supply agreement to supply feedstock to certain Wheelabrator facilities. As a result, WM will continue to supply waste to several Wheelabrator plants, but will no longer have the volatility of the financial results related to Wheelabrator electricity sale.