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Virginia Politics
Posted at 05:44 PM ET, 04/26/2011

Fairfax says Covanta broke deal extending lease on waste-to-energy plant

The Fairfax County Board of Supervisors emerged from a closed session Tuesday afternoon with a stunner: Covanta Energy, the company that has operated the Lorton waste-to-energy plant with the county for two decades, has reneged on a handshake deal to extend its operating lease on the $418 million plant, the supervisors said.

The company late Tuesday denied breaking any deal and accused the county of halting talks.

In any event, the impasse threatened to put the county back where it began months ago, when county officials disclosed that they were considering renewal of the public-private operating agreement or buying the plant outright.

Supervisor Gerald W. Hyland (D-Mount Vernon), echoing a sentiment shared by other members, said he was “outraged” at the sudden turnabout. Chairman Sharon S. Bulova (D) read from a letter received as recently as March 25 from Covanta saying the publicly traded firm stood behind a list of terms, agreed Feb. 9, that would guide the extension of the operating agreement.

Although the new terms put on the table by the waste-management company were not detailed after the supervisors’ closed meeting, Hyland’s remarks suggested that the company envisioned an increase in truck traffic to the site.

“If we were to consider their present proposal, it completely changes the status quo of a good working relationship we’ve had with Covanta in the Mount Vernon district on the former Lorton landfill property, ” Hyland said. He accused the company of negotiating in bad faith.

Bulova, in a brief interview afterwards, said Covanta was now offering different terms that could cost the county “millions of dollars.” Among them was a proposal that would allow Covanta to build a competing trash-processing facility on the site, such as a transfer station, that would handle garbage from jurisdictions far from Fairfax County.

In response, the board unanimously directed county staff to cease working on an extension agreement with Covanta and begin exploring all other options, including legal and legislative, dealing with the waste-management in the county.

“Covanta disagrees with the County’s view that we are no longer willing to stand behind the agreed-upon term sheet. Nothing has changed,” Covanta spokesman James F. Regan said. “We fully intend to live up to the term sheet, which was agreed to by the board of supervisors.” Regan said the company was eager to continue negotiations, but that the county had stopped the process.

The county wrestled publicly for months with the question of whether to buy the I-95 Energy/Resource Recovery Center or renew the agreement. The Fairfax County Chamber of Commerce jumped into the fray, urging that the county extend the lease rather than take on the expense of running and maintaining the plant. Those who supported buying the plant — including County Executive Anthony H. Griffin — said its purchase would ensure that the county maintained control over the flow of garbage to the plant and the cost of handling it.

The plant, on a 23-acre site in the southeastern part of the county, has four furnaces that process about 3,000 tons of garbage a day and generate enough power to light 72,000 homes. The electricity is sold to Virginia Dominion Power, with the county receiving about 90 percent of the proceeds and Covanta receiving the rest.

By  |  05:44 PM ET, 04/26/2011

 
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