Fuel and Environmental Charge
Waste Management is proud of our sustainability performance; outscoring all other companies in our industry on Newsweek’s Green Ranking list year after year. We are committed to controlling costs so we can continue to provide you with the best overall value in waste related services. Other than investments Waste Management is purposefully making towards cleaner technologies and reducing our overall impact on the environment, fuel prices and environmental compliance-related costs are something we cannot fully control. Our standard Fuel/Environmental Charge is meant to help us cover these costs and achieve an acceptable operating margin. This Fuel/Environmental Charge is one line item on customer invoices that contains two separate components-a fuel surcharge component and an environmental charge component.
This charge helps us keep up with the changing costs of diesel and other hydrocarbon based fuels anfd products, and allows us to achieve the operating margin we need to maintain the high level of service you expect. Our standard fuel surcharge calculation is tied directly to the national average price of diesel fuel as reported weekly by the Energy Information Administration of the Uf.S. Department of Energy ("EIA/DOE") in its Weekly Retail On-Highway Diesel Prices Index. This index is objective, publicly available and widely recognized in the trucking and transportation industries. Tying our fuel surcharge to this index ensures you are assessed a fuel surcharge that is currently adjusted, easy to calculate, and equitable to you and the Company.
The EIA/DOE average is published each Monday and will be used for invoices created during that week. The WM Collection Fuel Surcharge Table or WM Disposal Fuel Surcharge Table shows what the fuel surcharge, as a percentage of your monthly or other periodic invoice charges, before taxes, would be based upon the last reported EIA/DOE national diesel price index to your invoice date. Beginning in May 2013, we increased our fuel charge from .062% to .069% for collection services and .027% to .030% for disposal services for every penny above our baseline of $.95/gallon.
Waste Management is committed to being a good neighbor to our customers, our employees and our environment. The environmental component of our Fuel/Environmental Charge is 10% of all invoice charges, including the fuel surcharge. (Some disposal customers are charged a flat per load rate or a variation not described herein or have other contract terms. Contact your local Technical Service Center through www.wmsolutions.com for more details.)
The environmental component of the Fuel/Environmental Charge was implemented by the company to cover our costs and expenses to operate our collection, transfer, landfill, recycling, and waste-to-energy operations, on a company-wide basis, in a safe and environmentally responsible manner, and to achieve an acceptable operating margin. The amount or percentage of the environmental component is not specifically tied to the direct or indirect costs to service your account, but to Waste Management's overall costs on a company-wide basis based upon customers paying this charge.
Determination of the Fuel/Environmental Charge Amount
The fuel component of the Fuel/Environmental Charge that is included in a customer's invoice is determined by applying the percentage from the WM Collection Fuel Surcharge Table or WM Disposal Fuel Surcharge Table to the invoice charges (excluding tax). The 10% environmental component is then applied to the sum of the invoice charges and the fuel surcharge amount, but excluding taxes. This means that the environmental charge is 10 cents per dollar on the customer's total invoice, including fuel charge, but excluding taxes. For example a bill that totals $25.00 before tax for services and $3.00 for the fuel surcharge would see an additional $2.80 for the environmental component. (Some disposal customers are charged a flat per load rate or a variation not described herein. Contact your local Technical Serve Center through www.wmsolutions.com for more details.)
Historical WM Fuel/Environmental Charge values
For easy reference, the Historical Table shows each Fuel/Environmental Charge issued by WM for the previous 52 weeks. This table also references the corresponding EIA/DOE value for each week. Contact your local WM office if you require more information.
Not a Governmental Tax; Future Changes
The Fuel/Environmental Charge is not a tax or surcharge imposed by or remitted to any governmental or regulatory agency; it is our charge. The Fuel/Environmental Charge percentages may be changed at the discretion of Waste Management. To the extent required by your applicable customer service terms, your consent to the assessment of the Fuel/Environmental Charge, and any changes to such charge, is effective upon your payment.
Fuel and Environmental Charge — Frequently Asked Questions
Q: Why do you charge a fuel surcharge component?
A: The historical fluctuation in the cost of diesel fuel has made it difficult for our Company to recover and administer fuel expenses in standard operating margins. Our residential and commercial vehicles that run on diesel get 3 to 4 miles per gallon and our roll off vehicles around 8. In addition, third party vendors that transport our waste charge us a fuel surcharge or an increased price for added fuel costs.
Q: If the price of fuel goes down, will my fuel surcharge component go down too?
A: Yes, because the charge is tied to EIA/DOE index, if the EIA/DOE's national average diesel price falls, your fuel surcharge component will come down as well. This information is updated weekly.
Q: How can I access the Department of Energy Weekly Retail On-Highway Diesel Prices Index?
A: Here is the link to the EIA/DOE. This site is updated every Monday evening.
Q: Did the fuel surcharge component recently increase?
A: Recent fluctuations in the amount of the fuel surcharge on your invoice may be tied to changes in the EIA/DOE index. Also in May 2013, we increased our fuel surcharge from .062% to .069% for every penny above our $.95/gallon baseline fuel rate. We made this change to allow us to recover the cost of diesel and other hydrocarbon based fuels and products that we use above the revenue attributable to our baseline fuel rate.
Q: Why is there a fuel surcharge when the cost of fuel is less than what it was when my contract began or was renewed?
A: Our service rates contemplate a $.95/gallon baseline fuel rate, which we selected when we first implemented a fuel surcharge. Given ever changing fuel prices, the fact that we have many existing customers and are constantly renewing existing customers and adding new customers, we believe employing a fuel surcharge that uses a historical baseline rate is the best approach, as it results in a uniform fuel surcharge that can be calculated by our customers by referring to the WM Collection Fuel Surcharge Table or WM Disposal Fuel Surcharge.
Q: What does the environmental charge component cover?
A: The environmental charge component is our charge that we attribute to our overall company-wide costs to operate our business in a safe and environmentally responsible manner and to achieve an acceptable operating margin. This environmental charge is not specifically tied to the environmental compliance or other costs to service each individual customer account, but to overall environmentally related costs to service all Waste Management customers and to achieve an acceptable margin. Our environmentally related costs include, among other things, landfill cover material, engineering, testing and maintenance in our landfills and waste-to-energy facilities. In our collection operations these costs include such things as the disposal of tires, batteries, oils and fluids and the monitoring and management of vehicle emissions.
Q: Did the environmental charge component recently increase?
A: The environmental charge has not increased since August 2011.
Q: Will the environmental charge component change each month?
A: No. The environmental charge will not fluctuate each month. It is currently set at 10% of all invoice charges, including the fuel surcharge (but excluding taxes). The percentage may be changed periodically if there is a business determination that warrants a change in the charge. (Some disposal customers are charged a flat per load rate. Contact your local Technical Serve Center through www.wmsolutions.com for more details.)
Regulatory Cost Recovery Charge
As with any business, Waste Management is not immune to rising costs. Our company incurs millions of dollars in expenses such as host community fees and waste disposal taxes every year. To help us continue to provide our customers with the highest quality of service, we began adding a Regulatory Cost Recovery Charge of 2.1% of all other invoice charges, including the Fuel/Environmental Charge (but excluding taxes), to customer invoices beginning May 2013.
This charge allows us to cover a portion of our overall Company-wide costs associated with host community fees, waste disposal taxes and similar charges that we pay to municipal or other governmental authorities or agencies to engage in the waste collection, transfer, processing, disposal, incineration, treatment and/or recycling business, and to achieve an acceptable operating margin.
Not a Governmental Tax; Future Changes
The Regulatory Cost Recovery Charge is our charge; it is not tied to any fees, taxes or charges applicable to your local service area that we are required to collect and remit to any governmental agency. The Regulatory Cost Recovery Charge percentage may be changed at the discretion of Waste Management. To the extent required by your applicable customer service terms, your consent to the assessment of the Regulatory Cost Recovery Charge, and any changes to such charge, is effective upon your payment.
Regulatory Cost Recovery Charge — Frequently Asked Questions
Q: What does this charge cover?
A: The Regulatory Cost Recovery Charge is our charge to cover a portion of our company-wide costs associated with host community fees, waste disposal taxes and similar charges that we pay to municipal or other governmental authorities or agencies to engage in the waste collection, transfer, processing, disposal, incineration, waste treatment and/or recycling business.
Q: What is a “host fee”?
A: Typically a “host fee” is a charge WM pays, either by ton or on a monthly, quarterly or annual basis, to a community (city, county, province, municipality, township, etc.) to locate, construct, operate and/or expand our waste and/or recycling facilities in the community.
Q: I do not live in a community with host fees or disposal taxes, why am I being assessed a Regulatory Cost Recovery Charge?
A: Because this is a company-wide charge, this charge is applied to a customer’s invoice whether or not the customer is serviced in a city, municipality, county, province, state or other region that applies host community fees, waste disposal taxes or similar charges.
Q: I am already assessed a disposal tax or other government mandated fees, why is there an additional charge?
A: The Regulatory Cost Recovery charge is assessed in addition to any specific host community fee, waste disposal tax or similar charge that is directly applicable to your account or service area. This charge is not specifically tied to such costs to service your account, but instead helps us cover company-wide costs for host community fees, waste disposal taxes and similar charges to service all our customers in the United States and Canada, and to achieve an acceptable operating margin.
Q: Will the regulatory cost recovery charge change each month?
A: No. The regulatory cost recovery charge will not fluctuate each month. It is currently set at 2.1% of all invoice charges, including the Fuel/Environmental Charge (but excluding taxes). The percentage may be changed periodically if there is a business determination that warrants a change in the charge.