California Integrated Waste Management Board Update On Long-Term Postclosure Maintenance And...
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Transcript of California Integrated Waste Management Board Update On Long-Term Postclosure Maintenance And...
California Integrated Waste Management Board
California Integrated Waste Management Board
Update On Long-Term Postclosure Maintenance
And Corrective Action Financial Assurances
Activities
Permitting and Compliance CommitteeAgenda Item 2 (Committee Item C)
April 13, 2009
Update On Long-Term Postclosure Maintenance
And Corrective Action Financial Assurances
Activities
Permitting and Compliance CommitteeAgenda Item 2 (Committee Item C)
April 13, 2009
Problem StatementProblem Statement
Postclosure Maintenance is Required Until the Waste No Longer Poses a Threat – Beyond 30 Years
Current Financial Assurances Cover Only the First 30 Years of Postclosure Maintenance
Current Financial Assurance Only Cover Water Quality Corrective Actions
Postclosure Maintenance is Required Until the Waste No Longer Poses a Threat – Beyond 30 Years
Current Financial Assurances Cover Only the First 30 Years of Postclosure Maintenance
Current Financial Assurance Only Cover Water Quality Corrective Actions
Profile of Solid Waste Landfills in CaliforniaProfile of Solid Waste Landfills in California
AB 2296 RequirementsAB 2296 Requirements
Adopt regulations (referred to as Phase I) by January 1, 2008, that specify that closure and postclosure maintenance cost estimates be based on reasonably foreseeable costs the State may occur if it should assume responsibility for those activities due to an owner/operator’s failure to do so;
Conduct a Study by January 1, 2008, to define conditions that potentially affect solid waste landfills and study various financial assurance mechanisms that would protect the State from long-term postclosure maintenance or corrective action costs;
Adopt regulations (referred to as Phase II) by July 1, 2009, to implement the findings of the Study; and
Develop recommendations for needed legislation by July 1, 2009 to implement findings of the Study.
Adopt regulations (referred to as Phase I) by January 1, 2008, that specify that closure and postclosure maintenance cost estimates be based on reasonably foreseeable costs the State may occur if it should assume responsibility for those activities due to an owner/operator’s failure to do so;
Conduct a Study by January 1, 2008, to define conditions that potentially affect solid waste landfills and study various financial assurance mechanisms that would protect the State from long-term postclosure maintenance or corrective action costs;
Adopt regulations (referred to as Phase II) by July 1, 2009, to implement the findings of the Study; and
Develop recommendations for needed legislation by July 1, 2009 to implement findings of the Study.
AB 2296 StudyAB 2296 Study
Composed of Contractor study and Staff Report – completed December 2007Evaluated Financial Assurance
MechanismsDeveloped Financial Exposure ModelDeveloped Simple Risk Screening MethodDirected Staff to Explore Financial
Assurances beyond 30 Years and for Non-Water Corrective Actions
Composed of Contractor study and Staff Report – completed December 2007Evaluated Financial Assurance
MechanismsDeveloped Financial Exposure ModelDeveloped Simple Risk Screening MethodDirected Staff to Explore Financial
Assurances beyond 30 Years and for Non-Water Corrective Actions
Cost Estimate Regulations Summary (Phase I)
Cost Estimate Regulations Summary (Phase I)
Clarify Third Party Costs are the State’s CostsPrevailing WageCaltrans RatesOperator May Justify Alternative Costs
Increase Financial Means Test from $10M to $15M
Update Estimates to Reflect ”current costs on a unit basis (unit costs)”
Clarify Third Party Costs are the State’s CostsPrevailing WageCaltrans RatesOperator May Justify Alternative Costs
Increase Financial Means Test from $10M to $15M
Update Estimates to Reflect ”current costs on a unit basis (unit costs)”
Long-term Financial Assurances
(Phase II) Proposed
Long-term Financial Assurances
(Phase II) ProposedRevise Postclosure Maintenance
Financial Assurance LevelAnnual Incremental Drawdown or First
15 Years After ClosureOptional Step-down in 5X Increments for
Good Performance to a Minimum of 5XExpand Use of Reasonably
Foreseeable Corrective Action Assurances for Non-water Corrective Action
Revise Postclosure Maintenance Financial Assurance LevelAnnual Incremental Drawdown or First
15 Years After ClosureOptional Step-down in 5X Increments for
Good Performance to a Minimum of 5XExpand Use of Reasonably
Foreseeable Corrective Action Assurances for Non-water Corrective Action
Long-term Financial Assurances
(Phase II) Proposed
Long-term Financial Assurances
(Phase II) ProposedAdd 5-year Update for Plans
Closed Between 1988-2003Add Closure Certification Report
Deadline and As-Built CostsRevisions to Trust Fund, Pledge of
Revenue, and InsuranceClarifications to Cost Estimates for
Phased and Premature Closure
Add 5-year Update for Plans Closed Between 1988-2003
Add Closure Certification Report Deadline and As-Built Costs
Revisions to Trust Fund, Pledge of Revenue, and Insurance
Clarifications to Cost Estimates for Phased and Premature Closure
Three Key QuestionsThree Key Questions
1. Is the level of long-term financial assurance sufficient to protect against financial exposure to the State?
2. How to best protect against divestiture defaults?
3. Whether and how to address remaining default exposure?
1. Is the level of long-term financial assurance sufficient to protect against financial exposure to the State?
2. How to best protect against divestiture defaults?
3. Whether and how to address remaining default exposure?
Effect of Currently Proposed Phase II Regulations (8x)
Effect of Currently Proposed Phase II Regulations (8x)
Postclosure Maintenance and Base Corrective Action over 100 years
System Cost = $7,390MDivestiture = $542MDefault = $363M
Postclosure Maintenance and Base Corrective Action over 100 years
System Cost = $7,390MDivestiture = $542MDefault = $363M
Options to Address Divestiture
Options to Address Divestiture
Regulatory (Agenda Item 3)Establish minimum postclosure
assurance level of at least 15XAdd Step-up to 15X Upon Transfer or
SalePossible waiver for buyer with proven
track recordAdd 5X Step-up for lack of continued
performance or enhanced monitoring
Regulatory (Agenda Item 3)Establish minimum postclosure
assurance level of at least 15XAdd Step-up to 15X Upon Transfer or
SalePossible waiver for buyer with proven
track recordAdd 5X Step-up for lack of continued
performance or enhanced monitoring
Options to Address Divestiture
Options to Address Divestiture
Statutory (Agenda Item 4)Keep former owners/operators
liableMake generators liable tooSize pooled fund to cover
Statutory (Agenda Item 4)Keep former owners/operators
liableMake generators liable tooSize pooled fund to cover
Options to Address Remaining Default
Exposure
Options to Address Remaining Default
ExposureFind as Acceptable RiskRaise Assurance Level to Minimize
Exposure and Early DefaultRecommend Statutory Change to
Establish Pooled Fund Sized to Cover
Find as Acceptable RiskRaise Assurance Level to Minimize
Exposure and Early DefaultRecommend Statutory Change to
Establish Pooled Fund Sized to Cover
Corrective Action TypesCorrective Action Types
Base Corrective Action – known and reasonably foreseeable assurances
Major Maintenance – partially covered by reasonably foreseeable assurances
Extraordinary
Base Corrective Action – known and reasonably foreseeable assurances
Major Maintenance – partially covered by reasonably foreseeable assurances
Extraordinary
Pooled Fund OptionsPooled Fund Options
StructureCombined Pooled Fund – both
public and privateSplit Pooled Fund – separate public
and private
StructureCombined Pooled Fund – both
public and privateSplit Pooled Fund – separate public
and private
Pooled Fund OptionsPooled Fund Options
CoverageDefaultsAdd DivestitureAdd Major Maintenance and/or
Extraordinary Corrective ActionAll System Costs
CoverageDefaultsAdd DivestitureAdd Major Maintenance and/or
Extraordinary Corrective ActionAll System Costs
Questions?Questions?