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4.0 Recent Research/ Procurements for Waste <br />The most recently constructed MS\N-processing VVTEfad|dy in the U.S. oornnnanoed <br />operations in 1996.5 Since that time, no commercial plant has been implemented. <br />Several reasons account for this |u|| of activity in the VVTE field: <br />1. Loss of Tax Credits -The 1986 Tax Reform Act eliminated the significant tax <br />benefits for project owners/developers, contributing to the pipeline of <br />projects. <br />2' Environmental Activism - Misinformation about air pollution and ash impacts, <br />and preferences for recycling, created public resistance. <br />3. » ( ) - Effectively ended legislated <br />flow control, creating uncertainty in the revenue stream for projects. <br />4. Megafills - Large landfills with low tipping fees and no put-or-pay waste <br />supply requirement out-competed VVTE for the market. <br />5. Amendment to the Clean Air Act (1998) - New regulations required retrofit on <br />existing plants and drove up VVTEoosts, effective as of December 2OOO. <br />6. -Visib|e opposition by U.S. EPA to <br />combustion and preference for waste reduction/recycling sent negative <br />message about VVTE' <br />7. The rapidly increasing fossil fuel costs ofthe <br />1970a and `QOs stabilized, reducing the value of the energy products from <br />VVTE facilities, which were key drivers in facilities developed earlier, and <br />making overall project economics less attractive. <br />In the past few years, however, interest in VVTE and waste conversion has begun to <br />grow again. This renewed interest in waste processing technologies |s due boseveral <br />factors: <br />1. Proven WTE Track Record - superior environmental performance, reliability, <br />advancements in technology. and successful ash handling strategies have <br />made VVTE an acceptable option to consider as part of waste management <br />planning. <br />2. Increasinci Fossil Fuel Costs - With the price of oil now over $120 per barrel, <br />the cost of transportation fuels is making MSVV hauling and |andfi||ing more <br />expensive. In addition, the cost of electricity from fossil fuels is increasing, <br />making electricity from waste more valuable and making VVTE more <br />competitive. <br />3. requiring utilities to <br />generate a portion of their electricity from renewable sources, which <br />sometimes includes VVTE; the Federal government has included VVTE in its <br />definition of renewable energy' <br />4' 2006, the U.S. EPA revised its waste <br />management hierarchy to include VVTE explicitly as the third priority after <br />waste reduction and recycling/composting. <br />sCovanta's 2,250 TP0 plant in Niagara Falls, NY. <br />GBB/CO8027-01 12 August 15, 2008 <br />