WM's Waste Surcharge Hit 26.76% as Diesel Swung $1.27 a Gallon

WM's energy surcharge on waste collection stood at 26.76% of invoice charges for the week of Oct. 20, down from a September peak of 27.71% but well above the 21.99% it charged in the week of Aug. 11. The national diesel average driving that math ran from $5.26 a gallon in mid-August to $6.53 on Sept. 22, easing to $6.28 by Oct. 20. For multisite businesses pricing 2027 waste service, the surcharge line moved almost six points in six weeks.

That swing matters because how a hauler builds the fuel line can reorder a renewal as much as the base rate itself. WM runs one published formula across collection and disposal invoices, and it still bills some customers under an older charge stack. Waste Connections lists separate fuel, environmental and administrative charges that vary by location and contract.

How Does WM Calculate the Number?

Two federal indexes feed the formula: the weekly national retail on-highway diesel price and the Henry Hub natural gas spot price, both from the Energy Information Administration. The gas price converts to a diesel gallon equivalent for WM's compressed natural gas trucks, adjusted for transmission costs and excise taxes. WM subtracts baselines of $0.95 a gallon for diesel and $0.39 per gallon equivalent for CNG, then multiplies each result by a factor and fuel-volume weight it sets itself.

Here's the catch. The page doesn't publish those factors or weights, so a buyer can track the percentage but can't recompute it. The rate applies to invoice charges before taxes, using the latest weekly index values when the invoice is cut. Collection and disposal carry separate percentages — the disposal surcharge was 11.51% for the week of Oct. 20 — and some customers pay a nonstandard surcharge or are exempt under contract.

What Happened in April 2023?

WM adopted the current structure with invoices generated in April 2023, folding its Environmental and Regulatory Cost Recovery (RCR) charges into the base rate for most customers. Some remain on the older stack for contractual reasons. For them, a diesel-only fuel surcharge comes first, then a 20% environmental charge on the invoice including that fuel line, then a 3.6% RCR charge on everything above it, before taxes.

The arithmetic gap is striking. On a hypothetical $1,000 monthly collection charge, WM's energy surcharge added $219.90 in mid-August and $267.60 in late October. If that $47.70 gap held for a year, it would add roughly $572 to a single account.

Run the same $1,000 through the legacy stack for the week of Sept. 22, when the diesel-only collection surcharge sat at 38.50% against 27.71% under the energy surcharge. The fuel line adds $385. The 20% environmental charge on $1,385 adds $277. The 3.6% RCR on $1,662 adds $59.83. Monthly total: $1,721.83, against $1,277.10 on the energy-surcharge invoice.

That doesn't mean legacy customers pay more overall. Newer-structure customers carry the old environmental and RCR costs inside their base rate, so the two base quotes can't be compared directly. An energy-surcharge bid could quote a base roughly 35% higher — about $1,348 — and still match the legacy invoice's monthly total.

What Does This Change for Buyers?

Waste Connections' pricing policy lists four kinds of U.S. charges: fuel and material surcharges, environmental and regulatory charges, administrative or invoice fees, and container fees. The company says fuel and material surcharges may fluctuate periodically, including monthly, and may not relate directly to the cost of serving a specific account. A container fee may cover one swap a year for a same-size container, with other exchanges billed separately. National accounts settle these terms site by site.

Buyers already tracing fuel adjustments in freight and supply contracts can apply the same audit to collection service. A published index also lets a hauler recover fuel costs without reopening a contract, while a fixed price that ignores rising fuel and labor costs can strain the supplier behind it. Hazardous and special streams price on separate terms, since outlets depend on regional treatment capacity.

Neither hauler's public pages show what an individual customer pays. WM posts its energy surcharge weekly, though its legacy table hadn't been refreshed past Sept. 22 as of Nov. 8. A sample invoice from each bidder, priced at the high and low weeks of the past three months, will show how far each offer moves with diesel before the renewal window closes.