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Waste competition gets boost from judge's ruling

April 26, 2006|by ROBERT SNYDER

MARTINSBURG, W.Va. - Proponents of waste-hauling competition in West Virginia's Eastern Panhandle got a boost recently following a decision by a federal district judge who ruled the state's certification process for hauling garbage was unconstitutional.

In an order signed April 11 by U.S. District Court for the Southern District Magistrate Mary E. Stanley, a state statute requiring solid waste haulers who transport trash to other states from West Virginia to obtain a certificate of convenience and necessity from the state's Public Service Commission was ruled invalid and a violation of rights under the Commerce Clause of the U.S. Constitution.

Stanley ruled the state Public Service Commission's declared purpose for maintaining the certification process - that it ensures universal service at reasonable rates for customers - is neither valid nor justified given its restrictive effect on interstate commerce.

"The burdens imposed on interstate commerce by virtue of the West Virginia Code ... certification requirements are significant as it is virtually impossible for a new entrant to obtain a certificate by de novo application or by challenging an existing certificant for failing to provide reasonably adequate service," Stanley wrote as part of a 38-page order on the case.

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Currently, state code disallows commercial carriers from operating in West Virginia without obtaining a certificate of convenience and necessity from the PSC.

The result is a monopolization of service in the Eastern Panhandle by Waste Management Inc., according to Berkeley County Solid Waste Authority Chairman Clint Hogbin, who called the decision the first step toward bringing meaningful waste hauling competition to the region.

"What this means is that for the first time Eastern Panhandle businesses will have the opportunity to select from a variety of haulers," Hogbin said.

The judgment will not affect the in-state transport of waste hauling, which still requires certification.

Hogbin said the immediate effect of the court's decision will be to open the market to recycling, construction site and other out-of-state commercial carriers.

Waste Management Inc. Director of Government Affairs Lisa Kardell said allowing out-of state hauling will cost the state and the local solid waste authority money in the form of lost revenue. West Virginia collects $8.25 per ton of waste hauled to the LCS Services/North Mountain Sanitary Landfill in Hedgesville, W.Va., while Berkeley County's solid waste authority receives 50 cents per ton, Kardell said.

Kardell said reduced rates are not guaranteed as a result of the ruling. Transportation and disposal costs for out-of-state haulers could drive prices up, she said.

"I wouldn't jump to the conclusion that bringing in additional haulers is going to reduce the price," Kardell said.

Last year, the PSC approved a limited certificate for Maryland-based Panhandle Pumpers to haul construction site waste out of state. Another petition to the PSC - this one from Allied Waste-owned BFI Waste Services to begin providing recycling and waste hauling services in both Berkeley and Jefferson counties - will be heard July 25 to 27 in Martinsburg.

If BFI's application is approved, Hogbin said that could set the stage for competitive bidding for residential customers down the road that could affect service and pricing, a position supported by Stanley, who dismissed the claim of defendants in the case brought by Ohio-based hauler Southern Ohio Disposal LLC that contracts also impede market entry by competitors.

"The evidence establishes that local, competitively bid contracts or franchises can be used to achieve the goals of universal service at reasonable rates," Stanley wrote, adding the possibility of restricted market entry only existed in the face of non-bid renewable or long-term contracts.

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