PERC Seeks Comment on 2018 Budget, Approves Assessment Rate Increase

At its meeting in Denver, July 11-12, 2017, the Propane Education & Research Council (PERC) approved an increase in the assessment to $0.005 per gallon of odorized propane, a hike of half of one-tenth of a cent per gallon from the current rate of $0.0045 per gallon, effective Oct. 1, 2017. The additional revenue is projected to be about $3.3 million for programs.

The move to increase the assessment brings it to a maximum level allowed by the Propane Education and Research Act of 1996. The PERC assessment has been $.005 per gallon previously but was lowered to $.004 per gallon in 2010 when PERC had to halt spending on consumer education activities after the U.S. Department of Commerce determined that propane prices had exceeded the threshold that had been established in the 1996 act. Last year following a lifting of the restrictions there was debate over raising the assessment back to $.005 per gallon. A compromise raised it to $.0045 per gallon. This year, with the new PROUDLY PROPANE Clean American Energy campaign featuring Blue the dog launched in July 2016 under way, the council decided that returning the assessment to $.005 would be critical to achieve its strategic plans.

Those attending the meeting were reminded that the propane industry and public are invited to provide comments on the proposed budget for 2018. Details of the plan are at:

Instructions for submitting comments are included in the document. After public review and comment, and approval by a majority of council members, PERC must submit the proposed budget to the Secretary of Energy and to Congress.

Prior to the decision to increase the assessment, the budget was reviewed and discussed extensively by the council. Five key objectives for 2018 include:

1. Strengthen outreach programs to marketers, decision makers, suppliers, dealers, and end-users in all markets.

2. Invest in next-generation safety and training programs.

3. Support the product development work under way.

4. Propose an integrated program to support growth in the residential homeowner market.

5. Confirm the investments are consistent with the strategic plan survey results.

An executive summary in the proposed budget says it represents an integrated approach to create market growth in the residential and commercial sector, with a balanced effort targeted at consumers, professional trades, and propane marketers. The proposed 2018 budget represents a strategic shift from the existing advertising-focused branding campaign. While that campaign was deemed successful, the intent of the new campaign is to build on the increased awareness through a coordinated campaign to builders, professional trades, and consumers.

Tucker Perkins, who began his duties as CEO at the beginning of August, spoke at the July meeting about the opportunities PERC faces and said that while some strategic changes are being made, the ship is on the right course. He wants to refocus on propane marketers. “Their support is crucial,” he said. “We need to ask, ‘Will marketers use the program?’ as we create new programs.” Perkins also cited state association executives and the National Propane Gas Association (NPGA) as critical partners PERC needs to work with. “Working together makes everything work better,” he said.

Perkins announced he will have a 60- to 90-day listening period, with a goal of visiting at least 60 retail propane marketers and 10 state executives. He also stressed the importance of working with GPA Midstream Association partners as well.

Also during the meeting, council chairman Tom Van Buren of Ferrellgas passed the gavel to incoming chairman Drew Combs of CHS Inc. Other executive committee members starting one-year terms are: Rob Chalmers, Meritum Energy Holdings, vice chairman, marketers; Kasib Abdullah, BP, vice chairman, producers; Randy Doyle, Blossman Gas , treasurer; and Daniel Dixon, AmeriGas, secretary.

The council welcomed two new members: Scott Brockelmeyer of Ferrellgas and Gary France of France Propane Inc.

Near to the date of the 20th anniversary of the first council meeting, retiring CEO Roy Willis delivered his valediction at the end of the meeting.

—Pat Thornton