Virginia Veterans and Defense Affairs Secretary: Withdrawing From SPSA Could Hurt Navy

Virginia Veterans and Defense Affairs Secretary John Harvey Jr. raised red flags last week when he sent eight localities letters saying Norfolk Naval Shipyard could be harmed if they withdraw from a trash agreement.

“Making it more costly for NNSY to do business to the potential detriment of the Navy, and the shipyard’s 9,000 employees who live throughout the Hampton Roads region, is the wrong message to send at this time,” Harvey wrote.

The Southeastern Public Service Authority agreement expires in January 2018. Eight localities — Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Franklin, Southampton County and Isle of Wight County — have to decide whether they will continue to participate. And if they do, they also have to figure out which of three companies to work with.

Wheelabrator Technologies now processes the trash at a plant in Portsmouth, and the city benefits from $3 million in taxes and water fees. Wheelabrator has applied to continue processing the trash after January 2018 along with two new players. RePower South hopes to build a trash-to-energy facility in Chesapeake near the High-Rise Bridge. Republic Services has a landfill in Brunswick County.

Wheelabrator also, by burning trash, provides 45,000 to 90,000 pounds of steam power each hour of the day for 94 buildings and docks at the Naval Shipyard in Portsmouth and its critical repair operations, said Jeff Primavera, Wheelabrator’s vice president of the mid-Atlantic region, in an August email. Its contract with the Navy runs through 2023.

Portsmouth council members are the only ones thus far to say publicly that they are seriously considering withdrawing from SPSA.

Councilman Danny Meeks said at an August work session that if Portsmouth continued with SPSA and any of the three applicants, “they need to fire all of us.”

Mayor Kenny Wright added, “I can share with you, I have chatted, and have ate, and I have made sure we have eaten the dinner and they have paid for it before I have told them not only a ‘no’ but a ‘hell no.’ ”

Wright did not return calls Monday. Meeks said Monday that Portsmouth is one of the smaller localities and that it needs to do what is best for its taxpayers.

“We already have the people in place to manage our garbage,” he said. “Why should we pay an outside entity to manage it? Not only Portsmouth but every city in this region should look at what it is costing.”

In 2007, SPSA was $300 million in debt. In 2010, Wheelabrator purchased a waste-to-energy plant from SPSA for $150 million, which helped pay that down. As of 2014, the authority’s debt stood at $30 million and was scheduled to be paid off by 2018. Fees have risen to $125 per ton for most municipalities.

Meeks called the letter by Harvey “a dirty political move.”

“Everybody respects his opinion, but he doesn’t know the financial situation Portsmouth is in because the state put these tolls in,” Meeks said.

Tolls at the two tunnels connecting Portsmouth and Norfolk cost Portsmouth $14 million in taxable sales a year, and tunnel closures cost it $10 million, according to James Koch, an Old Dominion University economist.

Harvey said he got calls from three to four people and met with Wheelabrator representative Joel Rubin about the SPSA situation. Rubin gave him a proposed letter that he “changed fairly dramatically” to focus on the big picture instead of Wheelabrator alone, Harvey said. Rubin said four Wheelabrator executives also attended the meeting with Harvey.

Harvey said he was concerned that if members didn’t sign another SPSA agreement and pick Wheelabrator, the company would not obtain enough waste and would have to shut down its facility. Rob Johnson, plant manager for Wheelabrator, said the company has a backup fuel oil boiler and could use a fossil fuel to complete its contract with the Navy.

But if SPSA doesn’t send waste to Wheelabrator, the Navy would likely have to figure out another steam source or build its own after 2023, Johnson and Harvey said.

Harvey said the shipyard was not at risk of being closed because of federal budget cuts, but the “attitude demonstrated by various communities” is important.

But even if the eight localities decide to sign another SPSA agreement, it remains unclear which of the three companies SPSA would work with.

Bucky Taylor, SPSA’s executive director, said the authority is trying to create a new agreement by the end of the year and have it circulated to local governing bodies. But the agreement won’t include exact fees — which he said are estimated to be about half of what they pay now — or which company they are selecting.

Other SPSA localities reached Monday were noncommittal or said they were still considering options concerning their trash deals.

“Secretary Harvey’s letter raises some valid points and demonstrates why we need the Commonwealth’s engagement and support to ensure there is an adequate solution to meet the military’s needs,” Norfolk Mayor Paul Fraim said in an email through spokeswoman Lori Crouch.

Johanna Somers, 757-446-2478, johanna.somers@pilotonline.com  

Shared from Pilotonline.com.