PHOENIX – Waste Control Specialists (WCS) has reduced costs and staff since its January 2018 sale to a private-equity firm, part of a wider program to update its operations and attract new customers, an executive told an industry audience here last week.
The changes have been “dramatic,” according to Dan Burns, senior vice president of planning and business development at the Dallas-based radioactive materials disposal provider.
“We have really reduced our costs,” he said during a panel discussion at the Waste Management Symposia. “We have looked at every aspect of our company, from staffing, resource allocation, staff makeup, looked at all these issues and we’ve done quite a bit of reductions at our site and gotten quite a bit leaner, which will benefit our customers.”
Burns declined to discuss specific figures for costs and personnel. While staffing overall is down, it has been increased in the technical services and project management groups, “the folks who go out and help waste get to us,” he said.
The slimming strategy stands in contrast to peer US Ecology, which through a series of acquisitions since 2010 has increased its employee count from 225 to nearly 4,000, Joe Weismann, the company’s vice president for radiological programs and integration management, said in another panel.
Waste Control Specialists management is also making new capital investments and looking for additional business opportunities, Burns and other WCS executives said during several sessions at the conference.
Waste Control Specialists only opened its 14,900-acre waste disposal and processing complex in Andrews County, Texas, in 2012. The site encompasses four distinct waste facilities and is one of four commercial operations licensed for disposal of low-level radioactive waste.
The business was developed by billionaire Harold Simmons, who died in December 2013. It was owned by holding company Valhi Inc. until its January 2018 sale to J.F. Lehman & Co.
In its earnings reports, Valhi said Waste Control Specialists at times lost millions of dollars each quarter, due to a combination of high operating costs for its facility and insufficient waste disposal volume. The company ran an operating loss for Valhi through at least 2016, though the earnings figures improved in the months prior to the sale.
J.F. Lehman is privately held, so its earnings figures and those of its businesses do not have to be made public.
The sale came with a change of leadership at the top of Waste Control Specialists. Then-President and CEO Rod Baltzer exited, opening a consultancy and eventually becoming chief operating officer at another radioactive waste disposal company, Deep Isolation. His role was divided between new President and Chief Operating Officer David Carlson and CEO and Chief Nuclear Officer Scott State, who also heads another Lehman business: environmental solutions specialist NorthStar Group Services.
“I got to stay with the company, and I really appreciate the opportunity because the changes have been great,” said Burns, who joined Waste Control Specialists in 2009. “The new ownership is very well versed in nuclear issues and waste management, and I’m enjoying that quite a bit.”
Waste Control Specialists has focused on becoming more user-friendly, which Burns said had been a major criticism of its operation during his decade with the company. He didn’t discuss details of that criticism, but said additional project management personnel have been hired “to help integrate new folks into customers’ processes and systems.”
Among its capital investments, WCS in 2019 opened a new rail offloading facility, which is helping to expand its reach into new disposal markets such as naturally occurring radioactive material (NORM) and waste from the U.S. Army Corps of Engineers.
The company is also look at opportunities for accepting more waste that would be shipped through the Texas ports of Victoria or Houston.
“We can’t get all the way there with a larger ship, but we can get most of the way,” Burns said. Management has conducted route studies and bridge analyses through Texas, he added.
The WCS property sits on the state border with New Mexico, over 500 miles from both ports. The primary traffic would be waste from demolition and decommissioning of nuclear plants, Burns said.
Waste Control Specialists is already taking all waste generated by decommissioning of the Vermont Yankee nuclear power plant, which is managed by NorthStar Group Services. It expects to fill that role at future decommissioning jobs conducted by Accelerated Decommissioning Partners, NorthStar’s joint venture with nuclear company Orano.
Waste Control Specialists and partner Orano could also be a year and change away from receiving a federal license for another new revenue stream – an interim storage facility on the Andrews County property for up to 40,000 metric tons of spent fuel from nuclear power plants.
The company aims to continue reducing disposal rates at the Compact Waste Facility, which it operates for the state of Texas under the Texas Low-Level Radioactive Waste Disposal Compact. Texas and Vermont are the sole members of the compact. But it is available for disposal of low-level waste from 34 other states without their own compact.
Disposal rates are set by the state of Texas. Members of the compact pay less than the established amount for disposal, and non-members more.
“The problem was, when we sat down and added up the costs compared to potential revenue, that the costs were significantly higher than the revenue and if we set the rates at that level we would’ve gotten no waste really coming into the facility,” Carlson said during another conference panel discussion. “So we actually had to set rates initially at an interim level that were lower than that and frankly since that point in time we’ve continued to reduce the rates that are set by rulemaking as time goes forward.”
The Texas Commission on Environmental Quality has approved two rate reductions and is considering another for the so-called curie surcharge for disposal. “We continue to work to reduce those disposal rates in order stay competitive in the marketplace,” Carlson said.
