Procurement – Overview
WM Fuel/Environmental Charge Information
Waste Management is 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, rising fuel prices and environmental compliance-related costs are something we cannot fully control. Our Fuel/Environmental Charge is meant to help us cover these increased costs and achieve an acceptable operating margin. The Fuel/Environmental Charge is one line item on customer invoices that contains two separate components-a fuel surcharge component and an environmental charge component.
Fuel Component
The fuel surcharge calculation is tied directly to the
national average price of diesel fuel as reported weekly
by the Energy Information Administration of the U.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.
The EIA/DOE average is published each Monday and will be used for all 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 prior to your invoice date.
Environmental Component
Waste Management is committed to being a good neighbor
to our customers, our employees and our environment. The environmental charge is a percentage of all invoice charges including fuel surcharge (but excluding taxes) that we charge to cover increases since 2002 in our company-wide annual costs associated with operating in a safe and environmentally responsible manner and to achieve an acceptable operating margin. With some disposal customers, the environmental charge is a flat amount per load. The amount or percentage of the environmental charge is not tied to any specific, direct or indirect, costs to service a customer’s account.
For collection customers, the environmental component of the Fuel/Environmental Charge increased to 4.2% of all invoice charges including the fuel surcharge (excluding taxes) beginning December 2007.
Determination of the Fuel/Environmental Charge Amount
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 4.2% environmental component is then
applied to the sum of the invoice charges and the fuel
surcharge amount, but excluding taxes. This means that
the cost is 4.2 cents per dollar on the customer's total
invoice, including fuel charge, but excluding taxes. For
example a bill that totals $22.00 before tax for services
and $3.00 for the fuel surcharge would see only an additional
$1.05 for the environmental component.
Historical WM Fuel/Environmental Charge values:
For easy reference, the Historical
Table shows each Fuel/Environmental Charge issued
by WM since 2005. This table also references the corresponding
EIA/DOE value for each week.
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
percentage or amount 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.
Frequently Asked Questions
Q: Why do you charge a fuel surcharge component?
A: The fluctuation in the cost of diesel fuel today
makes it difficult for our Company to recover 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, the 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 EIA/DOE Weekly Retail On-Highway
Diesel Prices Index?
A: Here is the link to the EIA/DOE.
This site is updated every Monday evening.
Q: What does the environmental component cover?
A: The environmental 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 tied to any specific
environmental compliance or other costs to service a specific
customer account, but to the 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: Didn't the environmental charge recently
increase?
A: Yes. Like most companies, we are constantly looking
at various cost components of our business, including
our environmentally related costs, to ensure we continue
to operate in a profitable and sustainable manner. For collection customers, we increased our environmental charge to 4.2% of all invoice charges including fuel surcharge (excluding taxes) beginning in December 2007.
Q: Will the environmental charge change
each month?
A: No. The environmental charge will not fluctuate
each month. It is currently set at 4.2% of all invoice
charges, including the fuel surcharge (excluding taxes).
The percentage may be changed periodically if there is
a business determination that warrants a change.
Q: Are you increasing this charge to help pay
for the sustainability goals your company announced in
October 2007?
A: No, the increase to the environmental component
of the Fuel/Environmental Charge is not related to the
four sustainability goals we recently announced. The four
2020 sustainability goals-doubling the amount of waste-based
energy we produce, tripling the amount of recyclables
we manage, investing $5 billion in breakthrough technology
for our fleet, and quadrupling the number of our landfill
facilities certified by the Wildlife Habitat Council are
each intended to pay for themselves. The goals will benefit
the environment, but as our CEO announced at the World
Business Forum in October 2007, our investments towards
achieving these goals are expected to meet our internal
investment return requirements.
