Waste Management Will Help AEP Turn Ash Into Cash

Ashes to ashes, and... ashes to cash -- that might be the new motto at trash hauler Waste Management (NYSE: WM  ) . On Wednesday, the company announced a new deal with utility American Electric Power (NYSE: AEP  ) to help the latter dispose of "fly ash" produced by its coal-burning power plants.

Under the contract, Waste Management's FlyAshDirect division will be responsible for managing the ash created from the combustion of coal at AEP power plants, and marketing the ash to companies that might have a use for it.

In a statement, Waste Management's vice president of Energy Services observed that there are "150 million tons of fly ash produced a year by the electric utility industry" as a whole. Waste Management will now be responsible for trying to sell 700,000 tons of the stuff produced at AEP plants in Mt. Pleasant and Vernon, Texas, and Oologah, Okla.

The fly ash byproduct of power production has found a use in the construction industry, which incorporates the ash into concrete that it produces. Still, there is excess ash left over, over and above construction industry needs, and much of this ends up in landfills. By helping AEP to put more of the byproduct to productive use, Waste Management both bulks up its revenue streams, and extends the lifespan of the landfills it owns, by keeping them from getting filled up with ash. 

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