Lake Waburg Power Plant provides power to a metro- politan area of 4 million people. The plants controller, Sunny Hope, has just returned from a conference on the Environmental Protection Agencys regulations concerning pollution prevention. She is meeting with the companys president, Guy Poe, to discuss the impact of the EPAs regulations on the plant. Guy, Im really concerned. We havent been monitoring the disposal of the radioactive material we send to the Willis Disposal Plant. If Willis is disposing of our waste material improperly, we could be sued, said Sunny. We also havent been record- ing the costs of the waste as part of our product cost. Ignoring those costs will have a negative impact on our decision about the next rate hike. Sunny, dont worry. I dont think we need to concern ourselves with the waste we send to Willis. We pay the company to dispose of it. The company takes it off our hands, and its their responsibility to manage its disposal. As for the cost of waste disposal, I think we would have a hard time justifying a rate increase based on a requirement to record the full cost of waste as a cost of producing power. Lets just forget about waste and its disposal as a component of our power cost. We can get our rate increase without mentioning waste disposal, replied Guy. What responsibility for monitoring the waste disposal practices at the Willis Disposal Plant does Lake Waburg Power Plant have? Should Sunny take Guys advice to ignore waste disposal costs in calculating the cost of power?