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Wednesday, September 19, 2012

Rad Waste Market Games

This article shows how the radioactive waste market favors one particular company called EnergySolutions (ES).


Notice that the tax rate on processed waste is more than unprocessed waste.  The article says that it's because the processed waste yields less volume and since the company charges by volume, the tax should be higher.  Just because ES charges by volume doesn't mean the tax needs to be based on the same metric.  If the state charged by weight, not volume, than it could have a single tax rate based on something more easily measured (weight is a direct scale readout, volume is more subjective).  This would encourage radioactive waste generators to process their waste, reducing the volume, putting it in a safer, more stable form, which ultimately benefits the general public of the state.

So why things end up the way they did?

Before ES acquired its own processing facilities it competed against waste processors who ultimately sent their processed waste to ES.  By convincing the state to tax the processed waste at a higher rate, those competitors were charged a premium by the state.  Reducing competition in that way hurt everyone who generated waste from hospitals to nuclear power plants, and therefore their customers.

Then ES acquired its own processing facilities.  So what did they do?  They charged themselves a lower rate than they charged their competitors.  This artificially reduces competition that once again hurts everyone, this time the state and county as well.

But then, Utah's capital was settled by Mormons, a religion founded by convicted con man Joseph Smith.

Same as it ever was.

Music, please Maestro:



In the interest of full disclosure, I used to work for companies which competed with ES and today I own some stock in ES.

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