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 standard Fuel/Environmental Charge is meant to help us cover these increased 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.
Fuel Component
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 will ensure that you, our valued customer, will pay 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 prior to your invoice date.
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 6% 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 6 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 $1.50 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.wmdisposal.com for more details.)
Environmental Component
Waste Management is committed to being a good neighbor to our customers, our employees and our environment. Beginning December 2008, the environmental component of our Fuel/Environmental Charge increased to 6% of all invoice charges including the fuel surcharge. (Some disposal customers are charged a flat per load rate or a variation not described herein. Contact your local Technical Service Center through www.wmdisposal.com for more details.)
The Environmental Component of the Fuel/Environmental Charge was implemented by the company to cover our increasing costs and expenses to operate our collection, transfer, landfill 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 charge is not tied to any specific, direct or indirect, costs to service your account, but to Waste Management's overall costs on a company-wide basis.
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 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.
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, 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: Did the environmental charge component recently
increase?
A: 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. An increase in the environmental component occurred for most of our customers in December 2008. We reviewed our environmentally related costs for 2008 and determined that increases to such costs (as measured on the volume of waste that we collect and dispose) coupled with achieving an acceptable operating margin, warranted a change in the environmental component to 6%. (Some disposal customers are charged a flat per load rate. Contact your local Technical Serve Center through www.wmdisposal.com for more details.)
Q: Will the environmental charge component change
each month?
A: No. The environmental charge will not fluctuate each month. It is currently set at 6% of all invoice charges, including the fuel surcharge (excluding taxes). The percentage may be changed periodically if there is a business determination that warrants an increase or decrease in the fee charged. (Some disposal customers are charged a flat per load rate. Contact your local Technical Serve Center through www.wmdisposal.com for more details.)
Q: Did you increase 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 sustainability goals that we announced in October 2007. By 2020, WM will help power more than two million homes with the waste we collect; manage more than 20 million tons of recyclables each year; provide more than 25,000 acres of wildlife habitat at our landfills; and make investments to reduce our fleet’s emissions by 15 percent and increase its efficiency by 15 percent. These sustainability goals 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.
