Waste Connections, Inc. (NYSE:WCN) Q4 2022 Earnings Call Transcript

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Jerry Revich: Super. Thank you. And can I just shift gears a little bit, talk about R&D, since your last public comments, the EPAs rollout of RINs and overall framework really essentially blesses R&D as an effective biofuel and with that context, I’m wondering if we could talk about what number of sites that you folks have that don’t currently monetize gas in the plan could ultimately over time if you get permitting, etcetera monetize gas at economically viable levels. And, separately, obviously lots of details to be worked out on RINs, but I’m wondering if you’d be willing to share how much e energy your gas to electric facilities are generating adjusted for your ownership position?

Worthing Jackman: Well, I think yeah, I think you almost answered the question within how you asked it, which is there’s still a lot of details to be worked out. And our view on eRINs right now is to wait till the final rules get promulgated this year before providing any hypothetical comment on it because anything again right now would just be hypothetical, right? Clearly eRINs provides optionality for the projects we do have underway as we compare one RNG versus eRIN approach, but I still think it’s remains to be seen who actually owns the eRIN with regards to the OEMs versus generators, etcetera. So let’s — our view is let’s wait until the final rules get promulgated and then we’ll make some comment comments on it.

Jerry Revich: Fair enough. Worthing, I’m wondering, you just comment on the number of facilities part of the question. So what’s not monetized yet within your footprint in terms of number of facilities there could get monetized?

Worthing Jackman: Well, we currently have electric generation facilities at 17 of our sites.

Operator: Thank you. Next question will be from Toni Kaplan, Morgan Stanley. Please go ahead.

Toni Kaplan: Thanks so much. Wanted to ask about volume, you have the expiring contracts running through in ’22. So that was an impact there, but it did seem that volume is getting progressively softer. You did have some tough comps but wanted to talk about sort of, is it price discipline or is it the special waste that you called out last quarter or something else? And it seems like you are implying a little bit of benefit or improvement I should say in ’23. So, just wanted to ask about it and really just the normalized level, I know the expiring contracts are sort of rolling off, so that’ll help.

Worthing Jackman: Yeah, we think about this industry as more of a kind of a plus one minus one type volume industry. Obviously it’s a big more of a fixed price service based business. Episodically, whether it be through special waste or new contract wins that could push volume above the 1% episodically within gravitational pull kind of brings it back within that range. Obviously last year we talked about the purposeful shedding of two contracts that pushed reported volumes below the negative 1%, but we said, hey, adjusted for that. it’s, it was still staying nicely between net zero and negative one. And we look at this year as likely, another year of zero to negative one. Episodically, there may be a couple things that do drive us above zero into the positive on any one quarter, but we’ll wait to see how the year plays out on that.

The important thing obviously in this environment is price. The important thing is core price. And that’s why we’re pleased that the 9.5% and core price are regarding to for the year.

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