Look Ahead To 2021: State Associations, PERC Review 2020

Like everyone else, state propane gas associations have dealt with a lot of COVID-19-related challenges this year. These challenges just added to those they had seen on their radar for a longer period of time such as the “electrify everything” movement, workforce development for the propane industry, and finding more ways to increase propane sales across the United States.
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COVID-19 CHANGES THE LANDSCAPE

“MPGA (Missouri Propane Gas Association) and MOPERC (Missouri Propane Education and Research Council) replaced in-person meetings with video conferencing or conference calls,” said Steve Ahrens, president/CEO of MPGA and MOPERC. “We plan to continue with online board meetings in the future, with a couple of exceptions, as it saves travel time for our volunteer leadership, some of whom travel more than four hours one way to attend.”

“We are in the field doing in-person training for smaller groups while offering appropriate health protocols,” Ahrens added. “Other meetings such as our eight Spring District Safety Meetings will be transitioned to webinars.” While its largest event of the year, the Mid-States Propane Expo, hosted with three other state associations each year, was moved to July 2021, the Missouri Family Outing still took place as an in-person event. It was just in early October instead of during the summer.

“We were unable to hold our three conferences in-person, but met via virtual means instead,” the Mid-Atlantic Propane Gas Association’s Jonathan Williams said. “We hope to return to ‘normal’ in 2021 with regard to our conferences. If we cannot meet in-person in March, we hope to meet in July in Ocean City, Md.”
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“Right now we are planning an annual membership meeting in January and an open house for our new facility in May,” Minnesota Propane Association’s Dave Wager, executive director, explained. “We are being realistic and planning for a virtual membership meeting. Training is being planned for all in-person, but can transition to virtual or instructor-led as conditions warrant.”

The Texas Propane Gas Association has for many years utilized a communications philosophy that included weekly updates called ‘Monday Morning Messenger’ sent electronically along with the ability to send ‘urgent updates,’ usually compliance-focused or weather related,” said Bill Van Hoy, the association’s executive director. “These platforms were familiar to all of our members; it clearly was a fantastic asset as the COVID issue came on. I had begun the process of having the internet and phone system migrated to a cloud-based system and in May the process was completed. It could not have come at a better time. I decided to rotate staff from the very beginning, so having only one staff member physically in the office did not reduce TPGA’s ability to answer timely calls immediately. Each employee monitors all incoming calls regardless of the location any of us are.”

Van Hoy said the system worked well with the association’s regulatory compliance store, Propane Service Corp. “Calls and e-commerce correspondence come daily that require real people answer real questions. Shipments must be packaged and sent daily. Propane Service Corp. ramped up its e-commerce site last year and we continue to improve the site and welcome new customers from around the propane industry worldwide.”
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For most associations, many spring, summer, and fall meetings were cancelled or postponed across the country. In the cases of board meetings, most groups used video conferencing software such as Zoom to conduct association business. “Our North Central Convention was supposed to be in June, but we changed it to August 2021 with Minnesota and Wisconsin in La Crosse, Wis.,” said Deb Grooms, CEO of the Iowa Propane Gas Association. “We held our summer board meeting in-person and had a golf outing with 46 participants. We are having our fall board meeting in person in November. We started doing our CETP/Refresher Classes at our facility in July. We limit them to 10, due to COVID. They must wear masks.”

“ELECTRIFY EVERYTHING” MOVEMENT INTENSIFIES
“Don’t California my Alabama,” said Alabama Propane Gas Association’s executive director, Lisa Hill, noting the phrase is catching on with many state associations as they plug their state name into the phrase based on the concern that stiff decarbonization regulations challenging propane and other fuels in California will be copied in other states throughout the country. In 2021, Alabama will work on proposed legislation that will protect the propane industry from being banned in areas of the state.

“Don’t California my Georgia,” said Jenni McKeen, who leads the Georgia Propane Gas Association. “We are working with a strong coalition in Georgia including natural gas, Southern Co., and others. We have not had legislation passed protecting the propane industry yet because of COVID and budget priorities at the legislature. We will try to get something passed soon.”
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Bruce Whitney, executive director of the New York Propane Gas Association, considers responding to the “electrify everything” movement a top priority, especially relating to the Climate Leadership and Community Protection Act (CLCPA) passed last year in New York. “Major benefits of propane have shown up during the pandemic from temporary hospitals and testing facilities and, most especially, New York City approving special propane use to keep restaurants and other businesses in business,” Whitney said. He is working with members to help better communicate the value, versatility, and dependability.

“Today and in the future, propane is cleaner and cheaper than electricity in New York,” he concluded. “We have the cleanest, most economical energy that is out there.” One of many concerns he shared related to new peaks in demand developing as electrification continues. “If electric heat is ultimately mandated, what will people do in interruptions in power, especially in winter? In the end, people will support what works and vote with their pocketbooks,” he deducted.

“With the election behind us, we know that it’s more critical than ever to communicate propane’s low carbon, environmentally friendly message,” commented Missouri’s Ahrens, “Passing a ‘ban the ban’ bill in the state legislature and ensuring that propane is among the clean fuels being funded by the feds are key elements of our governmental affairs focus. We also know that energy policy will be dominated by the big utilities seeking to promote renewable projects. The state’s largest electric utility, for example, wants to designate almost $2 million to incent the replacement of non-electric forklifts with electric models. The utility generates about 73% of its electricity from coal, but the program is being sold as an environmental benefit. Ratepayers need to know what the consequences are, particularly lower-income populations that will have to receive huge subsidies to underwrite any transition.”

Derek Dalling leads both the Michigan and Ohio propane associations. “In Michigan, the retailers had been preparing for the battles with electric utilities for quite some time,” he said. “Here, the natural gas utilities and electric utilities are one in the same. So, we have been successful in our battle with the utilities for years and we’ve prevented them from subsidizing natural gas expansion. However, Gov. Gretchen Whitmer gave the utilities the electricity victory by issuing an executive order to make Michigan an all-electric, fossil fuel-free state by 2050. Additionally, Gov. Whitmer created the Upper Peninsula Energy Task Force last year largely to address the Line 5 controversies. However, one of the twists we have encountered is that the UP Energy Task Force recently recommended subsidized electric expansion in the UP to put propane companies out of business. As a result of the executive order and the discussions from the UP Energy Task Force, MPGA plans to push back much more in 2021 by promoting awareness of renewable propane, potentially working with social influencers through social media promotion, and other ideas to educate propane consumers and make them proud of the clean energy they already have at their homes through their propane heat.”

“Ohio has not witnessed as much of the ‘electrify everything’ movement yet,” Dalling said. “But ‘yet’ is the key word. Several large cities in Ohio are already actively pursuing goals to be fossil fuel free by 2050, 2035, and one even mentioned 2030. With these local government pushes, OPGA is actively working to draft ‘ban the bans’ type legislation that we hope to unveil and push in 2021.”

“Kansas is in a unique position compared to other states,” said Greg Noll, executive vice-president of the Propane Marketers Association of Kansas. “We have not seen a drastic change pertaining to the ‘electrify everything’ movement, which several states have been battling for many years. We know it is coming and we plan to address it accordingly, but at this time propane is still considered a smart choice for consumers and their energy needs.”

Dan Binning leads both the Colorado and New Mexico Propane Gas Associations. “In Colorado, propane faces a challenge amid the governor’s efforts to reduce greenhouse gases,” he pointed out. “But, propane is not a greenhouse gas like methane. We have provided a 15-page response to the governor’s 180-page outline of his plans. We have encouraged the public to write to the governor’s office about this short-sighted, poorly thought out plan.” Binning noted that New Mexico has not had a similar challenge yet, but anticipates the likelihood of battling something in the future. “We’ll react when we need to.”

In Texas, the association’s Van Hoy noted that it is always a great challenge to shift public perception. “We continue to support and implement programs both the Propane Education & Research Council (PERC) and the National Propane Gas Association (NPGA) have rolled out,” he said. “Fortunately, TPGA passed legislation that would prohibit political subdivisions from regulating electric-only areas of Texas. There are, of course, situations that come up and we actively participate in overseeing these.”
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“We were disappointed that propane was left out of a ‘ban the bans’ law when natural gas was included,” said Louisiana Propane Gas Association’s executive director, Randy Hayden. “Considering the high demand for propane lately with hurricanes causing a need for generators for hospitals, cell towers, etc., we are not giving up.” Hayden said that many local governments make money from natural gas through locally owned natural gas systems and therefore banning propane from legislation protecting natural gas is financially motivated. “In other cases, liberals come in and try to ban everything fossil fuel-related,” he said. “We are encouraged though by the ‘ban the bans’ on natural gas and feel propane, with its many benefits, will ultimately be included in future legislation.”

BUILDING NEW PROGRAMS TO EDUCATE THE PROPANE WORKFORCE
‘We’re very excited about a big development for 2021,” said Hill of Alabama. “We did a joint request for PERC funding with Tennessee and each received $25,000 for adding propane-related HVAC and plumbing curriculum and propane equipment. Initially, we funded a new propane lab at the Bevill State Community College in Hamilton. The lab, which includes a tankless water heater, tank water heater, range, furnace, wall heater and dryer, will be used for the hands-on portion of the state approved 3 credit hour propane elective. In addition, we’ve funded a ton of props, trained instructors, and set up a mentor program. We are ready to go!” Hill said with this funding they will also be able to create propane labs at Bevill State in Sumiton and Bishop State in Mobile. “Three additional Alabama community colleges each received a $10,000 PERC grant to enhance propane training. A second round of PERC funding is underway at this time and we hope to get even more colleges funded so that we have propane labs throughout Alabama. This will allow people all over the state to receive training and certification through the regulatory board as a service tech. This will allow them to promote themselves as state certified,” Hill said.

“Our new school, NC-TEC will open on April 5, 2021, for our first eight-week course,” said John Jessup, president/CEO of the North Carolina Propane Gas Association. “This school will recruit and train technicians to work in the propane industry.”

In South Carolina, the association’s executive director, Corky Clark, noted two major accomplishments in 2020. “First, we completed the introduction of the Overview of Propane Distribution Systems for HVAC and Plumbing Professionals into the curriculum of 14 of our South Carolina Technical Colleges that teach HVAC and plumbing. Secondly, we became a Gold Sponsor of the Be Pro Be Proud initiative in South Carolina.”

Clark said that each college received a propane furnace and propane tankless water heater for their training labs. “Our hope is that the curriculum will teach students how to install and service propane appliances and that some of the technical college graduates will be interested in starting a career in the propane industry. We are always in need of good service technicians.” He described the mission of Be Pro Be Proud SC as a way to showcase skilled-profession careers abundantly found in South Carolina through displays of hands-on, interactive stations representing on-the-job experiences.

“The movement aims to bring a new generation of pride and professionals to the state’s skilled workforce, specifically among the student populations who are weighing their options after graduation,” Clark said. “Students will learn that many of these skilled jobs are not only high-paying, but in demand, have long-term career prospects, and are only a fraction of the cost of a four-year degree. Inside the 53-foot mobile display unit, visitors will experience hands-on module simulators for commercial driving, HVAC technicians, forklift operation, utility bucket operation, diesel technology, heavy equipment operation, welding, carpentry, construction technology, and computer numerical control (CNC) machine operation.”

Clark noted that in addition to the hands-on simulations, visitors will walk away with information on what it takes to start a skilled professional career. “As a Gold Sponsor, we have access to the registration database of all students and other visitors who go through the mobile display,” he explained. “With that information, we can provide resource materials about the propane industry to those who have shown an interest in commercial driving and HVAC. It is estimated that 50,000 visitors will pass through the mobile display unit each year as it visits middle and high schools, career days, and job fairs throughout South Carolina.”

Missouri’s Ahrens said his state will continue with its Safe Appliance rebate program, which focuses on new construction or replacing non-propane appliances. “We’re also working hard with home builders on Propane HomePro, which highlights new construction residential projects that feature propane throughout,” he added. “Once schools get back to in-person education, we’re prepared to participate with our Tech Team outreach, which provides a propane furnace and water heater to install in building trades project while providing instruction for the students.”

“An extension of Tech Team will be to get a propane-based HVAC curriculum into two-year and technical schools,” Ahrens said. “We’re looking at how to support a 12-hour LPG Tech certificate at the secondary level as well. Another Workforce Development program we’ll evaluate is Propane CONNECT, a five-state jobs board that is working to match companies needing help with job seekers looking for employment in our industry. With so much focus on reaching home builders and the technical schools, we’re looking to add staff in the role of a propane advisor.”

NEW STATE CHECKOFF PROGRAMS
While PERC has been in existence for more than 20 years, a few states have had checkoff programs even longer and many have added programs. Georgia is one of the latest to add a state checkoff program, which is collecting 2.5-tenths of a cent per gallon. “We are just getting started collecting the funds,” said Georgia’s McKeen. “We are not ready to spend the money just yet. Expanding rebate programs and reaching out to HVAC, plumbers, contractors, and other decision makers will be a priority.”

South Carolina’s Clark said his association was about to begin a legislative push for a state checkoff program just as COVID hit. “We need that to supplement our national funding from PERC so we can provide advertising and appliance rebates to promote propane. Depending on what the legislature does beginning in January, we will either restart our state checkoff program efforts in 2021 or 2022.”

Michigan’s Dalling shared that despite balancing numerous COVID-related executive orders, the UP Energy Task Force, and the executive order to electrify Michigan by 2050, the Michigan association has remained hard at work on legislation to create a Michigan state checkoff program to supplement the national PERC program. “We are close to finalizing the legislation and sending it to Gov. Whitmer for her signature,” he said. “If we are successful with the checkoff program in December, then we anticipate working with the Michigan Department of Agriculture and Rural Development to create the rules to begin the program in 2021.”

Dalling also said that Ohio was able to pass legislation last year to create an Ohio state checkoff program. “OPGA hoped to finalize the rules and have the checkoff program operational this year. The COVID pandemic halted the work on the checkoff program for several months,” he added. “OPGA is pleased to report that it is working closely with the Ohio Department of Agriculture now and is close to finalizing the program and having the checkoff program operational. OPGA expects a referendum vote from all Ohio propane retailers in 2021 and assuming the referendum vote approves the checkoff program, it will be operational in 2021.”

OTHER GROWTH OPPORTUNITIES
“Our state PERC and MOPERC continue to evaluate how to increase the number of propane burner tips in the state,” said Missouri’s Ahrens. “Our primary focus is residential, but we also know that, with 3 billion gallons of gasoline and diesel fuel sold in the transportation sector, there are gains to be made with fleets. It feels that we are at a point where the ‘same old, same old’ isn’t going to be helpful. The velocity of electrification is exponentially greater than the progress toward our best bet, renewable propane. Creating programs and hoping marketers take advantage is the standard approach, but we need to be more aggressive. We need to help create demand and then match it with a supplier, rather than the hands-off approach. One idea is to underwrite a propane-powered shuttle for transit/paratransit use by local jurisdictions. We’d pay for the vehicle wrap, the fuel, and work with the agency to sell them on propane. If they move forward, getting a marketer on board would not be hard.”

Clark said the association has worked diligently to promote propane for school buses in South Carolina. “All school buses are owned and operated by the S.C. Department of Education. Our S.C. Department of Insurance was designated the beneficiary of S.C.’s VW Settlement Funds,” he explained. “I testified at Insurance Department hearings on how our VW funds should be utilized. The first award from S.C.’s $34 million total allotment was $9.3 million, of which $7.8 million went to the S.C. Department of Education for propane school buses. A total of 78 new Thomas school buses were delivered to the Department of Education this spring. This brings the total number of school buses funded by VW settlement funds to 217 school buses.” In North Carolina, Jessup also reported getting $1.2 million in VW funds for propane buses.

The Louisiana Propane Gas Association has been active in the Clean Fuels Clean Cities Coalition for several years and the association’s executive director, Randy Hayden, is also the chairman of the coalition this year. “We are pleased that half of the state’s $18 million in Volkswagen Settlement dollars have gone toward adding propane school buses,” he said. “We have also been aggressively marketing propane via our outreach at Louisiana College football games and through our partnership with the Miss Louisiana program. We are scheduled to tailgate at two football games per weekend, but COVID has caused some cancellations. We are also doing a $150,000 television advertising campaign with this year’s Miss Louisiana, Courtney Hammons, as spokesperson.”

HONORING JOE PORCO THROUGH SCHOLARSHIP AND NEWSLETTER
New York’s Whitney said that his association is developing a scholarship and a second member communication newsletter in honor of Joe Porco, who died earlier this year. “He had a wealth of knowledge about the industry and its opportunities,” Whitney said. “He is truly missed and, in his honor and memory, we are developing a significant scholarship for students within the industry. We are also creating a second newsletter to help associate members/vendors to share information on people, products and places with marketer members. The second newsletter will be called, ‘HEY JOE, WHAT DO YOU KNOW?’ This will be fitting considering Joe’s reputation for being a resource of good ideas and his willingness to help and share information with all.” — Pat Thornton