Clean Air / American Ref-Fuel Partnership Program

PURPOSE:

Maximize the synergistic benefits of our partnership by combining American Ref-Fuel's expertise in waste-to-energy systems andCleanAir's expertise in environmental management.

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STAKEHOLDERS:

• Employees and stockholders of American Ref-Fuel
• Employees and stockholders of CleanAir
• Members of local communities
• The general public
• Government officials

BENEFITS TO STAKEHOLDERS:

• Exceed corporate goals for efficiency and profitability
• Better utilization of energy resources
• Improvements to the environment, both local and global
• Better policies for managing energy crises
• Greater professional and personal satisfaction

SPECIFIC AIMS:

• Achieve continuous improvements in data quality.
• Achieve continuous improvements in our mutual knowledge base.
• Achieve continuous improvements in the understanding and credibility of all stakeholders.
• Achieve zero accidents.
• Develop innovations in waste-to-energy systems for maximum energy benefits.
• Create awareness of waste as a sustainable energy source.
• Achieve recognition as a "green energy" provider.
• Minimize cost while maximizing quality of compliance testing.

ISSUES

• CurrentlyCleanAiris paid for testing services on a time and materials basis.
• CleanAir has no incentive to find ways to save on manpower or cost of testing.
• CleanAir has no incentive to develop new technology.
• In the event of a testing delay, working relationships may be strained while the cause of the delay is determined.
• ARC has come to rely on the quality and consistency of service provided byCleanAir, even though less expensive options may be available.
• Because there has been no price increase for service since 1995 CleanAir’s profit margin has been decreasing for ARC work.
• CleanAir feels they must turn down more profitable work from other potential clients because ARC is their largest client.
• Lump sum billing was tried in the past and was found not cost effective.

OBJECTIVES

• Develop a fee structure that supports innovative cost savings for both companies.
• CleanAir help ARC to perform well. When ARC performs wellCleanAirbenefits also.
• Strong positive working relationship built on trust.
• Maintain and improve data quality for better stakeholder decisions.
• Improve credibility and understanding for all stakeholders.

PLAN

• A revised experimental payment structure is proposed at one or more ARC plants for compliance testing.
• CleanAir will be paid an indexed fee based upon past ARC facility/corporate performance.
• The indexed fee will be designed to be revenue neutral.
• During initial phase, diagnostic or other elective testing would be handled with the traditional fee structure.

• CleanAir will receive a fee based 50% upon ARC facility/corporate revenue and 50% upon ARC facility/corporate profit performance.
• A review of the past three to five year’s performance will be used to establish the fee structure and demonstrate possible outcomes.
• If either party feels the revised payment structure is not effective, it may be terminated.
• CleanAir paid on a quarterly basis with annual reconciliation.

IMPLIMENTATION

• Establish plant(s) where demonstration project might be considered.
• Obtain historical data for purposes of establishing fee structure.
• Evaluate past performance and impact on proposed fee structure.
• Determine how to address budgetary changes.
• Complete review by ARC andCleanAirmanagement.
• Evaluate success of demonstration project.
• Determine if desirable to expand to all ARC facilities.
• Determine if desirable to expand to allCleanAirservices provided.