Low-level radioactive waste disposal providers EnergySolutions and Waste Control Specialists are each other’s top rivals, and their merger would undermine competition in dozens of states, the Department of Justice said Monday in the opening day of the federal antitrust trial against the deal.
The bench trial in U.S. District Court in Delaware is scheduled to last two weeks and will be overseen by Senior Judge Sue Robinson.
Salt Lake City-based EnergySolutions in November 2015 announced its $367 million acquisition of Dallas-based Waste Control Specialists, a Valhi Inc. subsidiary that operates a waste disposal site in West Texas. The Justice Department sued one year later, contending the deal would deny competitive benefits to customers for low-level waste services in 36 states, the District of Columbia, and Puerto Rico. DOJ has said the two companies are the only two significant competitors for LLRW disposal services in those jurisdictions.
LLRW is a radioactive byproduct of nuclear power generation, scientific research, and medical treatment. It includes items such as tools, personal protective clothing, water-purification filters and resins, reactor hardware, and medical equipment. Customers include universities, hospitals, and nuclear facilities.
Justice’s opening statement detailed a timeline that it says supports its claims against the deal. Waste Control Specialists in 2014 opened its low-level radioactive waste facility in Andrews County, Texas. Two months later, EnergySolutions attempted to buy WCS, which refused its rival’s pursuit repeatedly through 2015.
That year, EnergySolutions filed an antitrust claim against WCS. EnergySolutions’ in its lawsuit claimed the other company engaged in “monopolistic behavior” in securing a waste disposal contract.
Justice Department attorney Julie Elmer said in her opening statement that prices for the companies services will only increase with the merger, as they face little competition, Bloomberg BNA reported. Businesses including Perma-Fix Environmental Services and NorthStar Medical Radioisotopes will during the trial argue that they have benefited from the competition, Elmer said.
EnergySolutions attorney Tara Reinhart argued that DOJ will fail to prove a “substantial lessening” of competition, according to Bloomberg, as its market definitions are too broad. Reinhart acknowledged that EnergySolutions did see WCS as a competitive threat, but did not lose customers as expected.
EnergySolutions has asserted that various other competitors operate disposal sites for low-level radioactive waste. Customers have the additional option of storing waste on-site, the company has said. WCS parent company Valhi has additionally said the acquisition is beneficial for its employees, customers, and the industry as whole, as the merger will result in a better price point for commercial generators of LLRW and nuclear power plant decommissioning projects.
Waste Control Specialists spokesman Chuck McDonald declined to comment on the trial in an interview Monday, but said company President and CEO Rod Baltzer will be present at the proceedings. EnergySolutions spokesman Mark Walker also declined to comment.
Last week, WCS said it halted, but did not cancel, its license application with the Nuclear Regulatory Commission for a consolidated interim spent nuclear fuel storage facility at its Andrews County complex. The company said the licensing process is financially “unsupportable” until it completes the merger with EnergySolutions.
