WM Fuel/Environmental Charge Information

Overview

Waste Management remains committed to controlling costs so we can continue to provide you with the best overall value in waste related services. However, rising fuel prices are something we cannot control and currently our fuel charge does not cover the true impact that rising fuel prices have had on our business. Consequently, for all invoices dated on or after January 01, 2006, we are changing the fuel charge component of our fuel/environmental charge to more accurately reflect the impact of changing fuel prices to our expenses.

Fuel Component

The fuel charge calculation is tied directly to the Canadian National average of diesel fuel as reported weekly by Bloomberg. Bloomberg is the leading global provider of data, news and analytics. The BLOOMBERG TERMINAL and Bloomberg's media services provide real-time and archived financial and market data, pricing, trading, news and communications tools in a single, integrated package to corporations, news organizations, financial and legal professionals and individuals around the world. This change will ensure that you, our valued customer, will pay a fuel charge that is currently adjusted, easy to calculate and equitable to you and the company.

The WM collection and disposal fuel charge table shows what the fuel charge, as a percentage of your monthly invoice charges, before taxes, would be based upon the last reported Bloomberg Canadian National diesel price prior to your invoice date. For example, if the last reported Canadian National diesel price was 115 cents per litre, your collection fuel charge would be 9% of your invoice charges, excluding taxes.

Environmental Component

The environmental component of this fuel/environmental charge, which is not a tax or charge imposed or remitted to any governmental agency, will be at 7.5% of invoice charges, excluding tax. It is directly associated to costs associated with environmental compliance. These environmentally related expenses include, but are not limited to: cover materials, engineering costs, environmental testing and maintenance on environmental systems. The fuel/environmental charge is our charge.

The fuel/environmental charge that is included on a customer’s invoice is determined by combining the percentage from the WM collection fuel charge and disposal fuel charge and the 7.5% environmental fee component and applying that percentage to the invoice charges.

For easy reference, the historical collection fuel charge and historical disposal fuel charge shows each fuel/environmental charge issued by WM since Jan. 2006.

Fuel charge percentages may be changed at the discretion of Waste Management.

Frequently Asked Questions

Q: Why are you increasing my fuel charge?
A: This increase is necessary for us to stay even with the cost of diesel fuel today. Our residential and commercial vehicles get 2km per litre and our roll-off vehicles around 4. We changed our calculation to the Canadian National monthly diesel price, which gets our company closer to covering our fuel costs.

Q: If the price of fuel goes down, will my fuel charge go down too?
A: Yes, if Bloomberg's Canadian national monthly average price for diesel goes down, your fuel charge will come down as well. If the cost of diesel fuel decreases, this will affect your fuel charge. This is the same procedure that we have used in the past. Using this new index allows us to be more responsive to fuel cost changes.

Q: What does the environmental component cover and will it fluctuate each month?
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. 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. The environmental charge will not fluctuate each month. It is currently set at 7.5% of all invoice charges (excluding taxes and fuel charge). The percentage may be changed periodically if there is a business determination that warrants a change.