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PERC Funds

As we went to press in early May, propane associations from across the country were weighing in on potential changes to the Propane Education & Research Council Assessment Rebate and Partnership with States programs.   In 2016 both of these programs are slated to provide an aggregate of about $9,600,000 to state and regional propane associations nationwide for safety & training, autogas, agricultural and other programs run by the propane industry in those areas.   By the middle of May these state and regional propane associations and foundations will have responded to PERC with their initial comments on the potential changes.

At the meeting of state and national propane organizations in Nashville, Tennessee in April, Roy Willis, president & CEO of the Propane Education & Research Council promised to write each state foundation and state check-off program and, at April’s end, Roy delivered his message to the state foundations that oversee PERC funds.

At issue is a draft strategic plan for 2016 through 2018 that includes a spending plan that would allocate $10 million annually for a consumer awareness campaign that launches this year.

The choice allows for either a restoration of the “pre-restriction” assessment level of 5/10-cent a gallon to adequately fund a nationwide campaign in 2017 and afterward, OR a second plan, put forth in April, based on the current assessment of 4/10-cent per gallon.

The Partnership with States program is slated to end at the end of this year.   This accounts for $2.3 million of the 9.6 million noted above, the balance of 7.2 million dollars being the Rebate funds that make up the bulk of the two programs

Willis says that under both approaches, PERC’s original strategic goals remain unchanged, namely to restore a residential focused consumer education program, expand propane applications and demand across multiple markets, provide quality safety and training resources and engage with the propane industry.

With the 5/10-cent assessment, Willis says the loss of matching funds from PERC would be offset by a 20% increase in state rebate revenue.   The end of PWS equates to a loss of revenue at the state and regional level ranging from a low of $3,400 to a high of $187,000 (based upon 2016 numbers)

Under the current assessment rate, the loss of matching funds will result in less funding to state PERCs and foundations beginning in 2017.

At the current 4/10-cent assessment, in order to support a nationwide consumer education campaign in 2017, PERC will have to reduce funding for all national programs, including the consumer education campaign, which would be cut from $10 million this year to $7.5 million in 2017 and beyond.

A 2017 budget plan is currently under development and will be taken up by the Council at its July 12-13 meeting.  Publication of the plan for comment will occur shortly thereafter. Final budget approval will take place in November of this year.

The issue will be discussed further at the Presidential Forum in Washington on May 22 in conjunction with NPGA’s Propane Days.  Readers should contact their state and/or regional propane association for more information on this process and its impact at the state and regional levels.

 

Shane Sweet is an energy and management consultant with clients in the heating oil, propane and motor fuel sectors, a partner with the firm of Lake Rudd & Company. Sweet is the executive director and technical director for the New York Propane Gas Association. He served the industry as president and CEO of the New England Fuel Institute from 2007 to 2011, and as executive vice president/director and lobbyist for the Vermont Fuel Dealers Association from 1993 to 2007. CONTACT: Sweet lives in Shaftsbury, Vt., and may be reached at shanemsweet@ gmail.com or 802-558-6101 cell/text. Suggestions by readers for future column content, as well as general comments are welcome. http://www.linkedin. com/pub/shane-sweet/7/a52/701

 

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