Folsom-based Waste Connections is meticulous on diesel conservation

Think you've been feeling pain at the fuel pump? Imagine how you'd react if your tank gulped down 20 million gallons a year.

That's the kind of volume that executives at Folsom-based trash hauler Waste Connections Inc. must manage. They do it with a meticulous conservation plan that takes in minute details, right down to the resistance that tire treads meet as they contact pavement or other surfaces.

They have also promoted a serious attitude-adjustment among hundreds of truck drivers, asking them to think about fuel conservation constantly.

Waste Connections serves about 1.5 million residential, commercial and industrial customers in 23 states. Diesel powers virtually all of the more than 2,700 trucks in the company's fleet.

The fuel now goes for more than $4 a gallon at retail locations, up from about $3 six months ago.

"It's a significant increase, and it has affected us," said Worthing Jackman, Waste Connections' executive vice president and chief financial officer. "Fuel prices have been affecting the whole industry, but we're still projecting (revenue) growth this year."

Although the company relies heavily on the pricey fuel to deliver service, executives said they have no doubt that strategic growth and vigilance over costs will enable the firm to make financial gains.

Waste Connections has taken about "a $50 million hit" in fuel costs dating back to 2005 – when diesel could be had for less than $2 a gallon – but has made up about 88 percent of that cost with fee increases and operational adjustments, calculated Ron Mittelstaedt, company chairman and chief executive.

Yet, Mittelstaedt said, they have tried to avoid pushing the full brunt of increases onto customers.

"Frankly, we've eaten some of the cost," he said. "… On a dollar-for-dollar basis, we are not asking our customers to pay for all these increased fuel costs."

Waste Connections' fee increases have been less dramatic than those in the waste industry as a whole, primarily because a majority of its customers are in jurisdictions where fee hikes are based on the Consumer Price Index, noted Brian Nelson, a senior analyst with Morningstar Inc., the Chicago-based investment research firm.

One way to make up for rising fuel costs is with a diesel fuel surcharge. But, at least one customer agreed that Waste Connections has been judicious about seeking increases.

Placerville City Manager John Driscoll noted that company officials will soon appear before the City Council to discuss changes in the surcharge for the first time since September 2006.

Currently, Driscoll said, the surcharge translates into about 60 cents on a $15.57 monthly bill for a customer with a 32-gallon waste container.

Instead of depending solely on fee increases, the company has focused on "operational efficiencies." It is striving to achieve maximum service out of every drop of diesel it uses.

The philosophy so permeates the company that Mittelstaedt said he closely monitors how much fuel he puts in his personal diesel-powered pickup, which averages 13-14 miles per gallon overall. A number of rank-and-file employees also have been so motivated by all the talk on fuel conservation that they carpool to work sites.

"It affects us. I carpool with a guy even though it's only 15 minutes. He drives one week and I drive the next week. Fuel is a big part of the household budget," said Joe Lizarraga, a 41-year-old Waste Connections truck driver whose residential waste pickup routes include El Dorado Hills and Cameron Park.

Drivers such as Lizarraga and mechanics must attend technical training periodically to learn about maximizing fuel efficiency.

"Everybody gets involved … in just about everything we do," added Gregory Thibodeaux, Waste Connections' director of maintenance.

Thibodeaux's duties include overseeing the company's vehicle fleet, with the help of some 350 mechanics. They have been charged with minding the details that save fuel - and dollars.

Thibodeaux's team religiously monitors:

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