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SPSA Calls it Off with Covanta

Date: October 25, 2006

Source: Southeastern Public Service Authority

At its meeting today, the SPSA Board of Directors accepted the recommendation of the SPSA Executive Committee and SPSA Staff to discontinue pursuit of the contract with Covanta Energy. All work on this project has ceased.

"It is our understanding that Covanta must make their best and final proposal to New York City next week, so that will effectively end our consideration of this project," says SPSA Board Chair Leroy Bennett. "However regarding our efforts with the City of Portsmouth-----we will continue the newly established Portsmouth Citizen Advisory Committee as well as work on a Memorandum of Intent to continue to build our relationships there. Those items are planned regardless of the Covanta project."

SPSA Deputy Executive Director Louie Jordan said, "It should be understood that the only reason SPSA pursued this project was for the purpose of providing a large financial benefit to our member communities which could be used to offset some of the upward pressure on the municipal tipping fee. The extensive work done by both SPSA staff and the City of Portsmouth indicated that this project could be done in an environmentally sensitive manner. The only reason we have chosen to halt this project is that Covanta is unable to provide the necessary guarantees that the tons delivered to SPSA will be sufficient to produce the financial returns necessary to justify this project to our constituents. Covanta Energy has negotiated in good faith with SPSA and the City of Portsmouth throughout this process, however, they are constricted by New York City's position that it will only guarantee recovery of fixed capital costs and not the variable costs associated with the volume of waste. All parties involved should be commended for the countless hours spent conducting due diligence on this project and for their professional conduct in dealing with the sensationalism and misinformation that has been put out into the public."

For additional information, contact Felicia Blow at (757) 420-4700.

Felicia D.W. Blow, APR
Director of Public Relations and Marketing
Southeastern Public Service Authority (SPSA)
723 Woodlake Drive
Chesapeake, VA 23320

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