PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON

Transcription

1 CASE NO SWF-CN ENTSORGA WEST VIRGINIA LLC PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON RESPONSES OF APPLE VALLEY WASTE SERVICES, INC., TO COMMISSION STAFF S FIRST SET OF INTERROGATORIES, DATA REOUESTS OR REQUESTS FOR INFORMATION AV 1. Please provide corporate structures and describe the operational and financial relationship of AVW of West Virginia, Inc. (AVWWV) and Apple Valley Waste Services, Inc. (AVW). RESPONSE: Apple Valley Waste Services, Inc. is the sole owner of (i) Apple Valley Waste Technologies, LLC, (ii) AVW of West Virginia, Inc., (iii) Apple Valley Waste Services of Maryland, Inc., and (iv) Morgan Sanitation, Inc, 0 Apple Valley Waste Technologies, LLC, is not a motor carrier or PSC-regulated entity, but it will own one-third of Entsorga West Virginia LLC s equity; 0 AVW of West Virginia, Inc. holds P.S.C. M.C. Certificate No. F-7496, authorizing common carriage of solid waste in residential service in Berkeley and portions of Jefferson Counties (Case No MC-TC), and P.S.C. M.C. Certificate No. F (Case No MC-TC), authorizing common carriage of recyclable materials in residential service in portions of Berkeley County; 0 Apple Valley Waste Services of Maryland, Inc., operates a garbage collection business in Maryland; 0 Morgan Sanitation, Inc. holds P.S.C. M.C. Certificate No. F-5851 (Case No MC-PC), authorizing common carriage of solid waste in Morgan and portions of Hampshire Counties. Based on discussions with Staff counsel, Staff wishes to learn that the investment of Apple Valley Waste Technologies, LLC, in Entsorga West Virginia LLC will not jeopardize the I As noted in response (August 12, 2012) to Staffs discovery request F.l, T[ 2 of the Application erroneously indicated that Apple Valley Waste Services, Inc., was itself an Entsorga owner. Apple Valley Waste Technologies, LLC, ownership is correctly documented in the Application s Exhibit 2, Schedule B Members Schedule. { C I }

2 operations of AVW of West Virginia, Inc., and Morgan Sanitation, Inc. AVW of West Virginia, Inc, and Morgan Sanitation, Inc. will not make any investment in Entsorga West Virginia LLC, and neither of those entities assets will be pledged or encumbered to secure financing for Entsorga West Virginia LLC. Apple Valley Waste Services, Inc., acquired AVW of West Virginia, Inc, and Apple Valley Waste Services of Maryland, Inc., for a total purchase price of $24.5 million on December 31, The acquisition was led by Summer Street Capital Partners, a Buffalo, NY based private equity fund, in partnership with the management team at Apple Valley Waste. In financing the acquisition, the operating subsidiaries were conservatively capitalized with a mix of equity and debt to ensure adequate cash flow and access to capital to support the existing operations in West Virginia and Maryland as well as planned growth initiatives. Approximately 76% of the purchase price was financed with equity and a long-term (6-year) note held by the seller. The balance of the purchase price (approximately $5.9 million, or 24%) was financed under a $15 million line of credit provided by M&T Bank. A line of credit was also put in place to provide access to capital to support existing operations as well as future acquisition and growth initiatives. Since December 2010, Apple Valley Waste Services, Inc., has completed four acquisitions with a total purchase price of approximately $9 million. Summer Street Capital 11, L.P., as the primary owner of Apple Valley Waste Services, Inc., remains supportive of these initiatives and ensuring that Apple Valley Waste Services, Inc, and its subsidiaries each continue to have access to sufficient levels of capital. Appropriate witness(es) on behalf of AVW concerning this request: Frank Celli or John Decker. { C } 2

3 AV2. Please provide, by month, MSW disposed [of] by AVW for the past thirty (36) months, Please include disposal site, number of tons, total cost and cost per ton. RESPONSE: Apple Valley Waste Services, Inc., is a holding company that does not dispose of solid waste. Exhibit A VI provides the information requested for AVW of West Virginia, Inc. Appropriate witness(es) on behalf of AVW concerning this request: JP Phillips. AV3. Please provide, by month, MSW disposed [ofl by Morgan Sanitation, Inc. (Morgan) for the * past thirty (36) months. Please include disposal site, number of tons, total cost and cost per ton. RESPONSE: See Exhibit A VI. Appropriate witness(es) on behalf of AVW concerning this request: JP Phillips. AV4. Staff notes that the disposal rate embedded in Morgan s cost of service is $ per ton and the proposed rate for the proposed Entsorga facility is $63.00 per ton. Provide explanation as to the benefit to the rate payers of using a higher cost facility for disposal. RESPONSE: Neither the rates of Morgan Sanitation, Inc., nor any disposal practice of Morgan Sanitation, Inc. is presently before the Commission. Morgan Sanitation, Inc. has made no commitment to dispose of any amount of waste at the Entsorga facility. Appropriate witness(es) on behalf of AVW concerning this request: Frank Celli or John Decker. AV5. Please indicate why AVW does not believe it needs to seek Commission approval to become an investor in the propose[d] Entsorga facility. RESPONSE: As addressed in response to AV1, neither Apple Valley Waste Services, Inc., nor any of its subsidiaries that are motor carriers will become investors in Entsorga West Virginia LLC. Apple Valley Waste Technologies, LLC is not a motor carrier or PSC-regulated entity, so (C } 3

4 its ownership of one-third of Entsorga West Virginia LLC s equity does not require Commission approval. Appropriate witness(es) on behalf of AVW concerning this request: Frank Celli. APPLE VALLEY WASTE SERVICES, INC. By Counsel JACKSON KELLY PLLC Post Office Box 553 Charleston, WV pmelick@jacksonkelly.corn { C

5 VERlFIC ATION STATE OF NEW JERSEY, I - COUNTY OF BEROEN, to-wit: Frank E, CeIli, Treasurer of Entsorga West Virginia LLC, being first duly sworn, says --tkatthef oreaa~~-resp~nsas-are-true,except-sufslr -~hherein-sta~d-to-be-on-infomzati on and belief, and that where therein stated lo be on information and belief, he believes them to be true, Frank E. Celli, Affiant Taken, sworn to and subscribed before me, the undersigned authority, this 9th of October, ANTONEU FUSCO My cornmission expires NOTARY PUBLIC, STATE of N&W COMMISSION ID Y EXPIRES 'I I [ C I ) 5

6 Exhibit AVW-1

7 Appie Valley Waste Services. Inc. Summaly of Voiume 36 Months Ended &ugul 2012 AVW Wen Virginia, InC. tu lefferson Transfer IESl Morgan sanitation tu Romney Transfer Stal :lo" Frostburg. Mountain View Tofa1

8 Apple Valley Waste Services. Inc. Summaly of Volume 36 Months Ended August 2012 AVW Welt Virginia, Inc. LtS IESI Morgan Sanitation tcs Romney Transfer Station Frostburg. Mountain View

9 Apple Valley Waste Services, Inc Summary of Volume 36 Months Ended August 2012 AVW West Virginia, lnc. IESI Morgan Sanitation Romney Transfer Station kefferson Transfer Frostburg. Mountain View

10 Apple Valley Waste Services, Inc. Summary of Volume 36 Months Ended August 2012 AVW West Virginia, Inc. IESl Morgan Sanitation Romney Transfer Station Frostburg - Mountain View

11 Apple Valley Waste Services, Inc. Summary of Volume 36 Months Ended August 2012 AVW West Virginia, Inc. lesl Average 36 Mo 36 Mo Rate/Ton Tons Landfill Exp ,030 3,42 1, ,972 3,868, , ,878 7,316,126 Morgan Sanitation Romney Transfer Station Frostburg - Mountain View , , , I , , ,716