““From Waste to Resource Management: A New From Waste to Resource Management: A New Way of Thinking about Waste Services and Way of Thinking about Waste Services and

Contracts”Contracts”

Materials ManagementResource Recovery Process

(Private Sector Experience)

PADEP Waste Reduction and Reuse Video Conference and Web CastHarrisburg, PAApril 10, 2002

Who We Are…Who We Are…  

•Internationally, PSEG ranks as one of the worlds top 10 independent power marketers

•PSEG Power is one of the largest independent PSEG Power is one of the largest independent power companies in the United Statespower companies in the United States

•PSE&G is among the largest combined PSE&G is among the largest combined electric and gas transmission and distribution electric and gas transmission and distribution companies in the United Statescompanies in the United States

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

Background…Background…

The Rules are changing…The Rules are changing…   • Competition

•Independent power producers•Open Market for gas and electric commodity

• Rules and Regulations•Environmental•Energy

• Size / Diversification requires substantial Size / Diversification requires substantial materials supportmaterials support

• Focus on opportunity in materials Focus on opportunity in materials managementmanagement

PADEP Waste Reduction and Reuse Video Conference and Web

Cast

Harrisburg, PA

April 10, 2002

Company Business DriversCompany Business Drivers

• Increase the Intensity of Material Recovery, Recycling and Re-use Activities

- Waste Accounting- Resource versus Waste Mindset

• Develop Supplier Relations Process– Move Away From Adversarial Relationships– Intelligent Supplier Base Reduction– Open To Long Term Agreements– Resource Management

• Leverage the Company’s Procurement Power

STRATEGIC INITIATIVESSTRATEGIC INITIATIVES

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

Keys to Success !!!Keys to Success !!!

• Waste Accounting- Know your material and waste streams

- Dumpster Diving

- Routinely track and link to contract provisions

• Resource Management and Supplier Relationships

• Material Life Cycle and Supply Chain Process Management Approach

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

Waste Accounting Data SheetWaste Accounting Data Sheet

Dept No. Facility Vendor

4 Audubon Gas District WM 0.67 0.27 0.55 0.28 0.83 3.971 Audubon Gas District WM 0.45 0.35 0.20 0.21 3.654 B.U. Meter P roject WM 1.79 79.99 0.32 1.70 0.81 3.05 14.221 Central Maintenance Shop WM 18.78 0.83 3.27 0.56 0.49 0.44 0.26 11.194 Clifton District Appliance Service/Northern WM 47.78 99.80 0.40 121.20 0.47 0.54 0.26 4.821 Clifton District Gas WM 0.60 0.86 1.08 1.08 2.34 0.45 7.921 Clifton District Gas A & L3 Clifton District Gas ACCU3 Clifton District Gas Allstate3 Clifton District Gas Allstate3 Clifton District Gas ASPLUNDH 81.003 Corbet Rigging ASPLUNDH 135.005 Corbett Yard BU3 Edison Training Center C Venture2 Hudson Chemical Cleaning P roject C&H 22.00 1.50 1.01 0.70 3.05 0.30 20.51 1.612 Hudson Generating Station C&H/NAP4 Hudson Sulphuric Spill CH

10 J ersey City Gas District CH 23.004 Kearny Chemical Cleaning P roject CH1 Longview Court WM 2.56 2.50 1.08 3.50 0.50 0.051 Mercer Generating Station WM 2.00 25.00 2.003 Metropolitan Headquarters Cinelli 1.79 2.503 Metropolitan Headquarters Cinelli 1.58 1.283 Newark Headquarters EPS3 Salem/Hope Creek Generating Stations GS3 Salem/Hope Creek Generating Stations GS3 Salem/Hope Creek Generating Stations KOPPERS 19.683 Salem/Hope Creek Generating Stations KOPPERS 12.634 Southern Division-Moorestown HQ NAP4 Southern Division-Moorestown HQ NAP3 Trenton M&R Station WM 18.78 0.83 0.80 0.56 0.49 0.443 Turnpike Substation WM 47.78 99.80 0.20 121.20 0.47 0.54 0.21 0.01 4.824 West End M&R Station SUPERIOR 1.256 Westampton M&R Station Towamencin

TOTALS 120.12 239.26 9.54 328.46 7.11 8.64 8.79 261.51 29.60 0.50 55.61 36.09

Waste Accounting Data SheetWaste Accounting Data SheetDept No. Facility Vendor

Invoice Number

Service Date

Invoice Date Disposal Cost Trans Cost

Manhole Service

4 Audubon Gas District WM D131217 03/01/01 03/31/01 $549.60 $1,185.001 Audubon Gas District WM D131102 01/02/01 01/31/01 $527.16 $1,200.004 B.U. Meter Project WM D131270 04/01/01 04/30/01 $3,151.66 $1,800.001 Central Maintenance Shop WM D131620 09/01/01 09/30/01 $1,799.58 $1,520.004 Clifton District Appliance Service/Northern WM D131602 09/01/01 09/30/01 $4,946.88 $760.001 Clifton District Gas WM D131214 03/01/01 03/31/01 $1,742.68 $1,575.001 Clifton District Gas A & L 55846 07/26/01 07/26/01 460.00$ 3 Clifton District Gas ACCU E4-30851 04/04/01 05/11/013 Clifton District Gas Allstate 29838 08/10/01 09/17/013 Clifton District Gas Allstate 29841 08/28/01 09/17/01 3,262.50$ 3 Clifton District Gas ASPLUNDH Dec-01 12/01/01 12/30/013 Corbet Rigging ASPLUNDH 01-J an 01/01/01 01/31/015 Corbett Yard BU 1-J an 01/01/01 01/31/013 Edison Training Center C Venture 65866 07/13/01 07/25/012 Hudson Chemical Cleaning Project C&H 230 02/01/01 02/15/01 $4,199.10 $3,180.002 Hudson Generating Station C&H/NAP 308 12/01/01 12/01/01 $555.004 Hudson Sulphuric Spill CH NJ 011297 09/30/01 10/19/01 $740.00 $180.00

10 J ersey City Gas District CH NJ 0226267 11/16/01 02/01/02 $1,116.94 $89.304 Kearny Chemical Cleaning Project CH MS0179144 01/11/01 02/06/01 $40.00 $180.001 Longview Court WM MS01103733 04/18/01 05/25/01 $880.001 Mercer Generating Station WM NJ 0192734 03/23/01 04/05/01 $125.00 $750.003 Metropolitan Headquarters Cinelli 15983 02/13/01 02/13/013 Metropolitan Headquarters Cinelli 18077 03/14/01 03/14/013 Newark Headquarters EPS 21893 03/28/01 03/30/013 Salem/Hope Creek Generating Stations GS 04-01-04 04/20/01 05/02/01 $15,822.403 Salem/Hope Creek Generating Stations GS 08-01-04 08/05/01 09/01/01 $15,624.003 Salem/Hope Creek Generating Stations KOPPERS 0895-1020-C 10/09/01 10/18/01 $2,244.483 Salem/Hope Creek Generating Stations KOPPERS 0895-0746-C 08/02/01 08/06/01 $1,401.934 Southern Division-Moorestown HQ NAP 01-Apr 04/01/01 04/30/014 Southern Division-Moorestown HQ NAP May-01 05/01/01 05/31/013 Trenton M&R Station WM 0174109 08/09/00 03/02/01 $400.003 Turnpike Substation WM 5978202 03/23/01 03/24/01 $132.754 West End M&R Station SUPERIOR EW158645 03/01/01 04/10/01 $84.00 $75.006 Westampton M&R Station Towamencin 14237 10/29/01 10/29/01

TOTALS $20,278.60 $12,974.30 $3,262.50

Keys to Success !!!Keys to Success !!!

• Supplier Relationships- Move Away From Adversarial Relationships to Open

Communications (two-way)

- Intelligent Supplier Base Reduction

- Open To Long Term Agreements, Risk Sharing and Pursuit of New Opportunities

- Shift From Supplier Price Reductions To Supplier Cost Reductions

From To

Price = Cost + Profit Profit = Price - Cost

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

What is Resource What is Resource Management (RM)?Management (RM)?

RM is a strategic alternative to traditional waste contracting and recycling

RM contracts emphasis / reward resource efficiency throughout material lifecycle rather than disposal– Prevention, reuse, recycling, composting

– RM contractor compensation is tied to quality of service

rather than quantity of waste disposal RM Contracts Align Contractor and Customer

IncentivesPADEP Waste Reduction and Reuse Video Conference and Web

Cast

Harrisburg, PA

April 10, 2002

Resource Recovery Mindset…A Paradigm Shift

FROM TO

Minimization Prevention

Resource Waste

Dispose Recover

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

Keys to Success !!!

Public Service Enterprise Group

Design, Specifications and Standards

CUSTOMER “Need”

Procurementand Supplier

Relations

Application CUSTOMER “Satisfied”

Materialand InventoryManagement

ResourceRecovery

MaterialsRequirements Planning

MATERIALS MANAGEMENT MATERIALS MANAGEMENT PROCESSPROCESS

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

PSEG - Resource ManagementPSEG - Resource ManagementCase StudyCase Study

Waste Management and Recycling- Over 100 company facilities generated solid waste

- Each facility maintained individual contracts with landfills and waste haulers- Over 35 suppliers used (landfills, transporters, transfer stations, brokers)- Solid waste volumes and recycling levels not known

Corporate Contract Established - Outsourced Recycling Services to Supplier MRF

- Identified Recycling Level Guarantees and Waste Accounting Reports- Educated on PSEG materials management initiatives, i.e. supplier reductions, changing roles and relationships and interest in core business- Commitment to supplier development process

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

PSEG - Resource ManagementPSEG - Resource ManagementCase Study,Case Study, cont. cont.

• Contract Value Add- Preferred Pricing and cost savings - Value Added Components: indemnification, training, audits, dedicated equipment- Consultative services on waste reductions, recycling opportunities and business solutions

• Environmental / Business Results - Reduced supplier base 35:1 and signed 3 year contract.- Established base recycling level of 88%…exceeded 90% in 3 years.- Summary invoices, on-time payment and problem resolution- Savings of $1.75 million dollars for hazardous and non hazardous solid waste management services over 3 year period - Outsourced training needs, audits, on-site management services- Reduced company resources for solid waste and permitted a core business focus

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

PSEG Hazardous Waste TrendsPSEG Hazardous Waste Trends

Hazardous Waste Generation Trends

0200400600800

1,0001,2001,4001,600

tons

PSEG - Resource ManagementPSEG - Resource ManagementImplementationImplementation

• Resource Management is not for the “weak of heart” - It takes hard work and commitment

- Change management issues…you will experience resistance- Not all suppliers able to operate under RM conditions- It is not a single event but a continuous process and journey- View waste as part of a materials management or supply chain process

• Benefits and Return on Investment- Established base recycling level of 88%…exceeded 90% in 3 years.- Summary invoices, on-time payment, back office efficiency and business

solutions- Savings of $1.75 million dollars for hazardous and non hazardous solid waste over 3 year period - Reduced company resources required for waste management and permitted a core business focus- Sharing of best practices across lines of business

PADEP Waste Reduction and Reuse Video Conference and Web Cast

Harrisburg, PA

April 10, 2002

For Additional Information Contact…For Additional Information Contact…

Waste Wise web site – www.epa.gov/ww Community Trends in Waste Prevention and Recycling

http://wwwepa.gov/wastewise/forum/index.htm North Carolina Division of Pollution Prevention and

Environment - Sample EPP Contract Language http://www.p2pays.org/buyrecycled/samples.htm

King County, WA Environmental Purchasing Bulletins http://www.metrokc.gov/procure/green/bulindex.htm#10

Tellus Institute - tvotta@tellus.org