California Integrated Waste Management Board February 11, 2009
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Transcript of California Integrated Waste Management Board February 11, 2009
California Integrated Waste Management BoardFebruary 11, 2009
California Integrated Waste Management BoardFebruary 11, 2009
Long-Term Postclosure Maintenance And Corrective
Action
AB 2296 Consulting GroupWorkshop
Long-Term Postclosure Maintenance And Corrective
Action
AB 2296 Consulting GroupWorkshop
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AGENDAAGENDA
10:00 - 10:15 Introductions and General Overview 10:15 – 12:00 Dealing with Divestiture Regulatory
Add 5X Step-up for lack of continued performance Add Step-up to 15X for new owner/operator with Board
waiver Change to 15X minimum for PCM
Statutory Keep former owners/operators liable Make generators liable
12:00– 1:00 Lunch
1:00 – 2:30 Continue Morning Discussions (if necessary) 2:30 – 3:15 Status of Pooled Fund Discussions 3:15 – 3:30 Wrap Up and Next Steps
10:00 - 10:15 Introductions and General Overview 10:15 – 12:00 Dealing with Divestiture Regulatory
Add 5X Step-up for lack of continued performance Add Step-up to 15X for new owner/operator with Board
waiver Change to 15X minimum for PCM
Statutory Keep former owners/operators liable Make generators liable
12:00– 1:00 Lunch
1:00 – 2:30 Continue Morning Discussions (if necessary) 2:30 – 3:15 Status of Pooled Fund Discussions 3:15 – 3:30 Wrap Up and Next Steps 2
Managing Long-Term PCM Risk of Landfill System
Managing Long-Term PCM Risk of Landfill System
ScenariScenarioo
AssureAssured Riskd Risk
UnassureUnassured Riskd Risk
StdStd Rural Rural PublicPublicss
Sgl Sgl PvtPvt
DefaultDefaultss
DivesDivest-t-ituresitures
TotalTotal
43X $5,590 0 $11 $26 $263 $300 0 $300
30X 4,562 $1,232 29 26 41 96 0 96
15X 2,972 2,748 60 26 84 170 0 170
5X 2,153 2,955 75 26 103 204 $578 782
Status Quo
1,822 3,172 83 26 120 229 667 896
$ in Millions over 100 years$ in Millions over 100 years 3
How Long Does PCM FA $$ Last?
How Long Does PCM FA $$ Last?
49X = perpetual43X = 100 years30X = 46 years15X = 18 years5X = 5 years
49X = perpetual43X = 100 years30X = 46 years15X = 18 years5X = 5 years
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What is Current Phase II Reg Proposal?
What is Current Phase II Reg Proposal?
PCM and CA FA required as long as waste poses a threat
30X Annual PCM at start of periodAnnual Drawdown For First 15 Years5X Step-downs For Good
Performance Every 5 YearsMinimum 5X PCM Throughout PeriodNon-water CA Uses Existing
Reasonably Foreseeable CA FA
PCM and CA FA required as long as waste poses a threat
30X Annual PCM at start of periodAnnual Drawdown For First 15 Years5X Step-downs For Good
Performance Every 5 YearsMinimum 5X PCM Throughout PeriodNon-water CA Uses Existing
Reasonably Foreseeable CA FA 5
Managing Long-Term PCM Risk of Landfill System
Managing Long-Term PCM Risk of Landfill System
ScenariScenarioo
AssureAssureddRiskRisk
UnassureUnassureddRiskRisk
StdStd RuralRuralPublicPublicss
SglSglPvtPvt
DefaultDefaultss
DivestDivest--ituresitures
TotaTotall
43X $5,590 0 $11 $26 $263
$300 0 $300
30X 4,562 $1,232 29 26 41 96 0 96
15X 2,972 2,748 60 26 84 170 0 170
5X 2,153 2,955 75 26 103 204 $578 782
StatusQuo
1,822 3,172 83 26 120 229 667 896
$ in Millions over 100 years$ in Millions over 100 years 6
What is Effective Multiplier (Likelihood to Step-down)?What is Effective Multiplier (Likelihood to Step-down)?Refine Exposure between 5X-15X
PCM under proposed Phase II regulations
Modeled No Corrective Actions during 5-year period
Estimated participation in Enhanced Monitoring program during 5-year period
Effective Multiplier equals 8X
Refine Exposure between 5X-15X PCM under proposed Phase II regulations
Modeled No Corrective Actions during 5-year period
Estimated participation in Enhanced Monitoring program during 5-year period
Effective Multiplier equals 8X 7
Proposed Regulation ImpactDefaults/Divestitures (at 8X)Proposed Regulation ImpactDefaults/Divestitures (at 8X)
ScenarioScenario DefaultsDefaults DivestituresDivestitures TotalsTotals
PCM $209 $433 $642
CorrectiveAction
154 109 263
Total 363 542 905
$ in Millions over 100 years$ in Millions over 100 years 8
Divestiture ProblemDivestiture Problem
Primarily an Issue for Private Landfills
Becomes a Problem when PCM FA <15X
Affects Both PCM and CA ExposureStakeholders Seem to Agree Not
to Address Through Pooled Fund
Primarily an Issue for Private Landfills
Becomes a Problem when PCM FA <15X
Affects Both PCM and CA ExposureStakeholders Seem to Agree Not
to Address Through Pooled Fund
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Types of DivestitureTypes of Divestiture
Sell to Another Company for Development or Other Postclosure Land Use
Sell/Donate to Public EntitySell to Another Waste
Management CompanyChange in ControlSell to Company in the Business of
Divestiture
Sell to Another Company for Development or Other Postclosure Land Use
Sell/Donate to Public EntitySell to Another Waste
Management CompanyChange in ControlSell to Company in the Business of
Divestiture 10
Divestiture – Regulatory Divestiture – Regulatory
What? Change to Minimum 15X Add 5X Step-up Provision for lack of
continued performance Add Step-up to 15X for New
Owners/OperatorsWaiver provision for proven track record
When? During Phase II Rulemaking
What? Change to Minimum 15X Add 5X Step-up Provision for lack of
continued performance Add Step-up to 15X for New
Owners/OperatorsWaiver provision for proven track record
When? During Phase II Rulemaking
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Change to Minimum 15XChange to Minimum 15X
Pros:Pros: Straightforward Addresses Divestiture Lessens Default
Exposure Not Dependent on a
Pooled Fund Not Dependent on a
Change to Liability Scheme
?
Straightforward Addresses Divestiture Lessens Default
Exposure Not Dependent on a
Pooled Fund Not Dependent on a
Change to Liability Scheme
?
ConsCons Ties up more Operator
Resources from Other Uses
15X Not Stringent Enough
Some Exposure Remains
May Result in Earlier Defaults
?
Ties up more Operator Resources from Other Uses
15X Not Stringent Enough
Some Exposure Remains
May Result in Earlier Defaults
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Add 5X Step-up For Lack of Continued Performance
Add 5X Step-up For Lack of Continued Performance
Pros:Pros: Indirectly Partially
Addresses Divestiture Incentivizes Continued
Maintenance Minimizes Moral
Hazard ?
Indirectly Partially Addresses Divestiture
Incentivizes Continued Maintenance
Minimizes Moral Hazard
?
Cons:Cons: Limited Effect on
Divestiture Some Exposure Remains Enforcement/Litigation
Difficulties Penalize for CA Beyond
Operator’s Control Timing, Step-up When
Funds Are Needed Most ?
Limited Effect on Divestiture
Some Exposure Remains Enforcement/Litigation
Difficulties Penalize for CA Beyond
Operator’s Control Timing, Step-up When
Funds Are Needed Most ?
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Add Step-up to 15X for New Owner/Operators with
Waiver
Add Step-up to 15X for New Owner/Operators with
WaiverPros:Pros: Reduces Divestiture Discourages
Marginal/Unproven Operators
Ensures New Owner/Operator has Adequate Financial Resources?
Reduces Divestiture Discourages
Marginal/Unproven Operators
Ensures New Owner/Operator has Adequate Financial Resources?
Cons:Cons: Not Stringent Enough Some Exposure
Remains Increase Price/Affect
Sales Doesn’t Address
Change in Control ?
Not Stringent Enough Some Exposure
Remains Increase Price/Affect
Sales Doesn’t Address
Change in Control ?
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Add 5X Step-up and Step-up to 15X for New Owner/OperatorsAdd 5X Step-up and Step-up to 15X for New Owner/Operators
Pros:Pros: Previous Pros Approaches 15X in
Addressing Divestiture ?
Previous Pros Approaches 15X in
Addressing Divestiture ?
Cons:Cons: Previous Cons Convoluted ?
Previous Cons Convoluted ?
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Nominal Group Options to Address Divestiture
Nominal Group Options to Address Divestiture
Statutory Keep Former Site Owners and Operators
liable (Water Board-like) Make Generators, Arrangers,
Transporters also liable (DTSC-like)
Statutory Keep Former Site Owners and Operators
liable (Water Board-like) Make Generators, Arrangers,
Transporters also liable (DTSC-like)
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Keep Former Site Owners/ Operators Liable
Keep Former Site Owners/ Operators Liable
Pros:Pros: Reduces Divestiture
by Solvent Companies Incentive for Increased
Due Diligence by Seller
Increases Sources of Revenue
?
Reduces Divestiture by Solvent Companies
Incentive for Increased Due Diligence by Seller
Increases Sources of Revenue
?
Cons:Cons: Doesn’t Address
Bankruptcy Increases Litigation Perpetual Liability Local Gov’t is
Ultimately Responsible for Protecting PHSE
?
Doesn’t Address Bankruptcy
Increases Litigation Perpetual Liability Local Gov’t is
Ultimately Responsible for Protecting PHSE
?
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Make Generators, Arrangers, Transporters
Also Liable
Make Generators, Arrangers, Transporters
Also LiablePros:Pros: Greatly Expanded
Potential Sources of Revenue
?
Greatly Expanded Potential Sources of Revenue
?
Cons:Cons: Lengthy Litigation for
Limited Effectiveness Generators Have No
Control Over Operation
No Manifests Available Timely Resources
Doubtful ?
Lengthy Litigation for Limited Effectiveness
Generators Have No Control Over Operation
No Manifests Available Timely Resources
Doubtful ?
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Nominal Group Options to Address Divestiture BallotNominal Group Options to Address Divestiture Ballot
Name (optional)RepresentingRegulatory
Rank Top Two Choices (mark 1 and 2) Statutory
Rank Top Two Choices (mark 1 and 2)
Name (optional)RepresentingRegulatory
Rank Top Two Choices (mark 1 and 2) Statutory
Rank Top Two Choices (mark 1 and 2)
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