Lifting of PERC Restriction Highlights Southeastern Event

The announcement from National Propane Gas Association (NPGA) chair David Lugar that the restriction on the Propane Education & Research Council’s (PERC) consumer education programs had been lifted after more than five years was a main highlight of an eventful NPGA Southeastern Convention in April that also included the convention’s first-ever Autogas Pavilion. The association reported that the 2015 expo was the industry’s largest show in nearly 10 years, with more than 230 exhibitors, more than 3000 attendees, and 30 countries represented.
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“I have the pleasure to announce a very favorable event for the industry, something we’re very proud of,” Lugar told the audience at the PERC Update session during the Southeastern event in Atlanta. “Last year at this time, after the winter we’d gone through, one of the questions we kept asking is when is the PERC restriction going to be lifted? We need to get back to talking to our customers. I’m here to say, it is officially lifted.”
 

The news ended a saga in which the U.S. Department of Commerce (DOC) placed a restriction on PERC’s consumer education activities in 2009. Under the Propane Education and Research Act of 1996 that created PERC, DOC is assigned to annually calculate the price for “consumer-grade propane” and compare it with an index of prices of specified competing fuels. Whenever the price of propane exceeds a certain threshold, the industry is restricted from conducting most of its educational outreach activities. In 2009, the DOC calculation triggered the restriction, and PERC’s educational outreach ceased. Last December, President Obama signed H.R. 5705, the Propane Education and Research Enhancement Act (PEREA) of 2014. The new law states that DOC must use data reflecting all propane market sectors, not just residential. Using the congressionally mandated data for its price analysis, the DOC reported that propane prices were below the statutory threshold.

“Therefore, no restrictions are required to be placed on the activities of the Propane Education [&] Research Council,” stated an April 10 letter from DOC that NPGA distributed at the Southeastern show.

PERC president and CEO Roy Willis spoke to BPN at the Southeastern show soon after the council’s notice of the lifting of the restriction, giving “kudos” to NPGA for its work in getting PEREA signed into law.
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“The effort demonstrates their legislative program is performing at full speed,” Willis said. He noted that the council wants to see a plan before deciding whether to raise the assessment from its current four tenths of a cent per gallon of odorized propane sold. PERC lowered the assessment from five tenths of a cent to four tenths after the DOC restriction was put into place in 2009.

“We have multiple audiences we want to reach,” Willis also told BPN. “We need to analyze each market segment and give deep considerations to the media options that are available. And we don’t want to rush it. It’s important to build consensus in the industry. We learned in the last campaign that we need to have the industry — state associations and marketers — collaborating to expand the reach of the consumer education campaign.”

He added that PERC has not done extensive promotional events in areas that have emerged since the restriction took place, such as landscaping and fleets. “We’ve done some in agriculture, but we have more to talk about there. So there are challenges in building this multi-audience campaign.”

Since the restriction was implemented in 2009, NPGA led the industry’s advocacy within the DOC and on Capitol Hill during five Propane Days events to end the restriction. Phil Squair, NPGA senior vice president, public and governmental affairs, told BPN after the event: “NPGA is very pleased that its top legislative priority has now been accomplished.”

Session Topic: Going Paperless One of Many Benefits of Automation
Five presenters took part in different sessions under the category “Propane Delivery Automation Workshop.” Vertrax, a back-office software and mobile logistics company for the propane and fueloil industries, focused on three main benefits of using mobile logistics during its presentation titled, “When Bad Routes Happen to Good Fleets; a Tale of Two EBITDAS.” The first benefit is the ability to increase profits by attacking your customer base proactively instead of keeping drivers in their pre-defined zones. John Rosen, vice president of sales for Vertrax, described a fleet that is delivering over a million gallons more per year with two fewer bobtails and how that has improved the company’s net worth.

A dramatic reduction in stress in and out of the office is the second benefit. Increased managerial vision and controls creates a transparent environment. When customer service representatives, drivers, and managers are all working off the same page, it creates a manageable environment.

The third benefit is the ability to institutionalize a fleet’s information, which Rosen stated is probably the greatest benefit as well as the important insurance policy a company could possibly have. Many fleets are still delivering off route cards, but mobile logistics is a strong tool to end that dependency. Going paperless and having paperwork electronically stored is a major advantage for most fleets, as is the ability to centralize dispatch in multi-branch locations.

Jason Levine, director of sales, truck automation, for BASE Engineering (Saint John, N.B.), conducted an additional session in the Propane Delivery Automation Workshop titled, “What to Expect When Implementing Truck Automation.” The presentation focused on the project management involved with executing a truck automation system. Marketers buying an automation system should look at it as a project, not just a purchase, Levine noted. For many propane bobtail products such as valves and meters, the marketer can bolt the system on and walk away. He might not have to collaborate with anyone until something goes wrong. But executing products such as billing systems, inventory management systems, or fleet tracking systems involves dealing with more moving parts than a marketer can imagine.

“The idea is, this has to be managed like a project,” Levine said. “Like a civil engineering project, if you were to re-engineer the Hoover Dam, you wouldn’t say, ‘Build me a dam tomorrow.’ You want to have clear expectations, [and] understand what the scope of the project is. Even if you don’t believe it’s your responsibility, it’s good you’re educated on how and what to do. That will help the project move forward much smoother.”

Whether a marketer is switching to a new automation system or going to automation for the first time, it involves stress because you are in a sense changing the way you run your business. You’re changing the way the drivers interact with something in the vehicle, and you’re changing the way the accounting team interacts with a new piece of software in the office.

“This has historically been painful, and it’s better to be prepared for what to expect than to let that creep up on you. By the time the next November or even October arrives, you start getting ramped up for the next peak season, and you realize, ‘I waited too long to put the system on, and I’m still struggling,’” Levine noted. Planning should take place from contemplation to realization, answering questions such as who will install the product and how the truck builders are involved.

“If you have a road map laid out for you, you will feel more comfortable in all the discussions you have with the various vendors so you are not in the dark about ‘What are they talking about?’ ‘Why the delay?’ ‘Why are the lead times so long?’ These are all things you want to be aware of before you make the initial call to start discussing truck automation.”

Marketers should also identify a “champion” at their company to oversee the process. “The champion is the one who believes that without this solution, the project will not succeed, and at all costs will be the one that helps push through all the political issues both internally and externally.” In a small company, the owner might be the champion who makes sure the accounting team, the drivers, and IT staff have bought into the project. “Without a champion, I guarantee the project will not succeed, because when something needs to happen, you won’t have that one person who will drive meetings to completion [and] make sure everyone’s schedules are coordinated with the start-up.”

Session Topic: Growth Opportunities with Irrigation
Cinch Munson sees a two-year window of opportunity for the propane industry to gain significant market share in irrigation. “That’s growth in gallons, profits, growth in placing engines, and selling propane because of it,” said Munson, director of agriculture business development for PERC. Marketers should talk to farmers about how propane irrigation can help them, but it can also help marketers sell a significant amount of extra summer gallons.

“Why are propane irrigation engines such a good choice? A typical engine can burn anywhere from 4000 to 12,000 gallons per year. That’s a pretty significant amount of fuel,” he stated, adding that as a general rule, per liter of displacement on the engine, it will burn about a gallon an hour. A 5.7-liter engine will burn about six gallons an hour. A farm might run that engine for 1000 hours in a summer, depending on location and other factors. He showed a slide with a large number of blue dots on a U.S. map, noting that each of the blue dots is equal to about 10,000 irrigated acres, and each engine or pump is doing about 100 acres on average. Each dot represents about a million gallons. “This opportunity is so big, it’s really hard to fathom.”    —Daryl Lubinsky

Forklifts: Productivity Is the New Normal

Strong R&D efforts are taking place to build the next generation of engine technology, but competition from electric forklifts has heated up, narrowing the advantage propane forklifts have held over electric models.

 Businesses more than ever want to increase productivity, and technology that shows the productivity of forklifts is a current trend in the materials handling industry. Brian Feehan, president of the Industrial Truck Association (ITA), noticed that and other trends in March while attending ProMat, a major materials handling conference that took place in Chicago.
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“Productivity is the new normal,” said Feehan, who is a former vice president of the Propane Education & Research Council (PERC). He joined ITA as president in 2011. “People want to make sure that efficiency is accounted for in what they’re doing in the workplace.”

That is the case for electric (class 1, 2, and 3) and internal combustion forklifts that run on propane, gasoline, diesel fuel, or compressed natural gas (class 4 and 5). The advantage that propane forklifts have held over electric models has narrowed in recent years as electric forklifts have made various product improvements.

Feehan talked about an interview he gave to BPN in 2011 right after the announcement that he would be joining ITA as president. At that time, he said he planned to work to ensure propane maintains its share of the lift truck market. His efforts in that area continue, and he said “industry efforts to support the market for propane would be bolstered by offering strong products and maintaining a committed presence in the marketplace.” He believes PERC took a step in the right direction recently when it proposed an initiative to provide $2 million in funding for forklift propane engine development. Under the funding proposal, which the council approved at its April meeting, Power Solutions International (Wood Dale, Ill.) will develop and commercialize an advanced propane engine that will help fill a gap created as a major engine supplier is expected to stop producing a popular engine model at the end of the year.

Feehan noted that the PERC project should go a long way toward ensuring the longevity of propane in the forklift market. Additional product R&D to compete in the heavier capacities at the top of class 5, an area in which diesel-fueled forklifts have been more predominant, could also support propane’s position in the market.

“Clearly, product availability to ensure your current market position or to create new opportunities is a program worth strong consideration.”

Feehan and the ITA communicate regularly with PERC. R&D efforts in the areas of filtration and fuel quality are of mutual interest and he hopes a meeting can take place this year between some ITA members and PERC to discuss and review these initiatives, which he feels are important.

Communication with PERC helps ITA keep abreast of other relevant propane industry developments such as increased fuel supply from shale. Updates on propane product availability, new sources of supply, ongoing work throughout the distribution stream, and other developments in the propane industry help forklift manufacturers stay current on issues.

“We want to be sure the forklift manufacturers have the most current and relevant information available when talking about fuel supply and quality. It can have an impact in many areas,” Feehan explained.

He noted additional trends that pose a challenge to the propane forklift industry, such as changes that have occurred over time in the size of distribution centers. Changes such as narrower aisle widths and increases in building height have had an impact on how forklift products have evolved in recent years. Forklift manufacturers have to design their product offerings to recognize the changes in work environments and the need for increased work productivity.

During his visit to the ProMat show in Chicago, he got a first-hand look at some of the improvements in electric forklifts. Battery technology continues to improve, especially in class 1, which includes electric-powered rider units. Those products are now able to run longer shifts between charges and feature increased lifting capacities. In addition, electric forklifts, once considered an indoor-only application, are now usable in all types of environments, on different grades, and in all types of weather.

For internal combustion or electric forklifts, Feehan is excited for the overall future of the lift truck industry. With strong sales in 2013 and 2014, the overall lift truck market is looking for another strong year in 2015. The industry sold more than 200,000 class 1 to 5 lift trucks last year.

While in Chicago, Feehan noticed a trend of more automation taking place, including robotics in manufacturing and automation in material handling, along with a significant presence of new technology offerings, including data management systems for the fleet, the forklift, and the operator. Forklift manufacturers are providing lift truck users with more detailed data on the productivity and efficiency of the products in a continuing effort to help the customer become more efficient than ever.

“Customers want to know data and facts on productivity, downtime, operator performance, safety, and how the product performs in terms of fuel use or battery charge. There is an awful lot of data that can be received by the customer from the products themselves. That is a trend that has been around, but it seems like it’s growing.”

Propane has opportunities for growth in the lift truck market. In addition to developing products such as the PERC product with Power Solutions International, the propane industry should continue with its traditional methods of seeking more market share.

“Look at where the markets are, how big is that market today, what’s the annual volume, how are those markets dominated, what are the applications, who are the major manufacturers in those marketplaces, what type of relationship do you have with them, and how can you work with them to maintain or expand your share,” Feehan advised.    —Daryl Lubinsky

Propane Education & Research Council Re-Launches Popular Grilling For Heroes Campaign

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The Propane Education & Research Council (PERC) is celebrating National Military Appreciation Month by re-launching its Grilling for Heroes campaign to increase awareness of safe grilling practices and raise charitable donations for military members and their families. Partnering with Food Network personality Sunny Anderson, PERC crowdsourced recipes from grilling enthusiasts across America and compiled them into the Grilling for Heros Cookbook that includes 50 original grilling recipes and is currently available to download at GrillingForHeroes.com in exchange for a goodwill donation. One hundred percent of all proceeds from the campaign will go to Hope For The Warriors, a nonprofit whose programs enhance the quality of life for post-9/11 wounded service members and their families.

At facebook.com/PropaneCouncil, propane industry members are invited to share photos and stories of up to 300 words about themselves, family members, friends, and colleagues who have served in the military or are currently supporting the U.S. Armed Forces. The stories will be featured in PERC's Grilling for Heroes campaign, and will create a public record of the industry's dedication the military. (https://www.facebook.com/PropaneCouncil/app_592993584098659)

"Grilling for Heroes has always been about celebrating our American pasttimes and honoring those who have served," said Roy Willis, PERC president and CEO. "The propane industry has a long history of serving in the military and supporting our armed forces here and abroad. We're honored to be able to collect and share our industry's stories and celebrate them through this new facet of the campaign."

To get involved in the campaign visit http://www.propanemarc.com/SearchResults.asp?Cat=2117 for Grilling for Heroes materials or visit http://www.propane.com/residential/grilling-for-heroes/ to donate and download the cookbook.

Women in Propane-Sponsored "Defining Moments In Leadership" Huge Success at NPGA Southeastern Convention

At the recent NPGA Southeastern Convention & International Propane Expo industry trailblazers shared with a well-attended audience "defining moments in leadership" from their personal and professional journeys at the Women In Propane-sponsored roundtable and networking event.

The "Defining Moments In Leadership" speakers included Miriam Cavagna, Marketing & Communications Director, Cavagna Group; Peter Gibbs, CEO, Touchstar Corporation; Natalie Peal, Publisher, Butane Propane News, and Alison Abbott, Communications Director, World LP Gas Association.
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In addition to hearing inspirational, touching and sometimes humorous examples of leadership challenges speakers had encountered and conquered during their careers, attendees also gained insight into several personal experiences that had strengthened speakers’ leadership abilities from Cavagna, Gibbs and Peal. Ms. Abbott discussed the progress currently underway to launch a Global Women In Propane Network. Speakers also shared with the audience leadership traits they believed were necessary to be a successful leader. 

Following the four inspiring speeches, participants split into small groups to define and discuss the various characteristics and values exhibited by leaders. Roundtable groups were moderated by Women in Propane (WIP) members representing different segments of the propane industry - family businesses, association leadership, suppliers, and small and large marketers. Each shared their key discussion points and best practices with the full group. A networking reception concluded the event.
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The Women in Propane Council was established to provide positive opportunities for all members of the industry to support the advancement and success of women in every scope of business operation and professional development.

WIP Reception

Breaking News: PERC Restriction Lifted

Propane Education & Research Council (PERC) President & CEO, Roy Willis, announced at the National Propane Gas Association (NPGA) Southeastern Conference on Saturday, April 11, 2015, that the U.S. Department of Commerce restriction on PERC's consumer education programs had been lifted.
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BPN will feature expanded coverage of this news in the coming days along with other exciting convention coverage.