Fuel and Environmental Charge
Waste Management is committed to controlling costs in order to provide our customers 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.
The fuel surcharge is a Waste Management charge that allows us to recover the increase in the cost of diesel and other hydrocarbon based fuels and products that the company uses in its business using a baseline cost for diesel ($.95/gallon). This charge helps Waste Management keep up with the changing costs of diesel and other hydrocarbon based fuels and products on a company-wide basis throughout North America, and allows us to achieve the operating margin we need to maintain the high level of service our customers 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 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. Tying our fuel surcharge to this index ensures our customers are assessed a fuel surcharge that is currently adjusted, easy to calculate, and equitable to our customers 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 a customer’s monthly or other periodic invoice charges, before taxes, would be based upon the last reported EIA/DOE national diesel price index prior to a customer’s invoice date.
The environmental component of our Fuel/Environmental Charge is 13.25% of all invoice charges, including the fuel surcharge, but excluding the Regulatory Cost Recovery Charge and taxes. (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, and recycling 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 a specific customer account, but to Waste Management's overall costs on a company-wide basis based upon customers paying this charge.
Historical WM Fuel/Environmental Charge values
The fuel environmental charge included on a customer's invoice is determined by first applying the percentage from the WM Collection Fuel Surcharge Table or WM Disposal Fuel Surcharge Table to the total invoice charges (excluding taxes). Then the environmental percentage is applied to the sum of the total invoice charges and fuel surcharge calculation (excluding tax). For example, a bill totaling $25.00 for services before tax, with a $3.00 fuel charge, would see an additional $3.71 applied for the environmental charge (13.25% of $28). 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 a customer’s applicable service terms, such customer’s consent to the assessment of the Fuel/Environmental Charge, and any changes to such charge, is effective upon such customer’s payment.
Fuel and Environmental Charge — Frequently Asked Questions
Q: Why do you charge a fuel surcharge component?
A: This charge helps us keep up with the changing costs of diesel fuel on a company-wide basis and provides the stability we need to continue to maintain the high level of service our customers expect. Fuel charges are common in the transportation industry and are charged by other waste haulers, trucking companies and national airline carriers.
Q: If the price of fuel goes down, will my fuel surcharge component go down too?
A: Yes, if the EIA/DOE's national average diesel price falls, your fuel surcharge component will come down as well. Tying the charge to this publicly reported price allows us to be responsive to fuel cost changes.
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: 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 fuel surcharge uses a $.95/gallon baseline diesel rate, regardless of when a customer’s contract begins or renews. We believe employing a fuel surcharge that uses a common baseline rate for the company’s customers 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 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. The environmental charge percentage will not fluctuate each month; however, the percentage may be changed periodically if there is a business determination that warrants a change.
Q: Did the environmental charge component recenlty increase?
A: The environmental charge increased by 2.25% of all invoice charges (excluding taxes) in December 2015 (to 13.25%).
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 assess a Regulatory Cost Recovery Charge on customer invoices, currently 3.6% of all invoice charges, excluding taxes
This charge allows us to cover 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, 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 we pay to municipal or other governmental authorities or agencies to engage in the waste collection, transfer, processing, disposal, treatment and/or recycling business.
Q: What is a “host fee”?
A: Typically a “host fee” is a charge Waste Management 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 3.6% 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.