Friday, August 14, 2015
Management of Pierce Pepin Cooperative Services (PPCS; Ellsworth, Wis.) and the board of directors have agreed to sell Pierce Pepin Propane Services to River Country Cooperative of Inver Grove Heights, Minn. The closing date will be Aug. 31. Details of the agreement were not released. PPCS notes it entered the propane business in 1999, positioning itself for the emerging fuel cell technology that was developing. Although propane did not ultimately advance as a commercial-scale feedstock for hydrogen fuel cell energy, PPCS instead expanded into the residential market.
The PPCS board commented that the propane industry has changed dramatically in the last few years with the increase in domestic production of oil and natural gas. What was once a propane supply affected regionally and nationally is now heavily impacted by international demand as well. “The board and management recognized the need to strengthen supply sourcing, transportation, and storage. Improving these elements provides the foundation for guaranteeing the rural customers who are dependent on propane with secure supply and stable pricing. With that in mind, we evaluated the options that would best meet these critical essentials and set about to secure them.”
As a result of discussions, PPCS decided to seek terms with cooperative providers of propane, and eventually to negotiate a transaction with River Country Cooperative. River Country brings more than 80 years of service to its members and over 45 years of providing propane service, said PPCS. The cooperative also has established propane logistics—sourcing, transportation, storage, and technology—through its relationship with CHS Inc. (Inver Grove Heights, Minn.) and various propane associations.
“This transaction will benefit both cooperatives and honors one of the cooperative principles, ‘cooperation among cooperatives,’” said PPCS board chairman Roger Wiff. “Our number one priority is to provide safe, reliable electric service to our members. Divesting of the propane business, at this point, will help PPCS do that even better. We also believe this will benefit our propane customers by providing long-term benefits for supply and service, and the opportunity to participate as member owners.”
The PPCS board commented that the propane industry has changed dramatically in the last few years with the increase in domestic production of oil and natural gas. What was once a propane supply affected regionally and nationally is now heavily impacted by international demand as well. “The board and management recognized the need to strengthen supply sourcing, transportation, and storage. Improving these elements provides the foundation for guaranteeing the rural customers who are dependent on propane with secure supply and stable pricing. With that in mind, we evaluated the options that would best meet these critical essentials and set about to secure them.”
As a result of discussions, PPCS decided to seek terms with cooperative providers of propane, and eventually to negotiate a transaction with River Country Cooperative. River Country brings more than 80 years of service to its members and over 45 years of providing propane service, said PPCS. The cooperative also has established propane logistics—sourcing, transportation, storage, and technology—through its relationship with CHS Inc. (Inver Grove Heights, Minn.) and various propane associations.
“This transaction will benefit both cooperatives and honors one of the cooperative principles, ‘cooperation among cooperatives,’” said PPCS board chairman Roger Wiff. “Our number one priority is to provide safe, reliable electric service to our members. Divesting of the propane business, at this point, will help PPCS do that even better. We also believe this will benefit our propane customers by providing long-term benefits for supply and service, and the opportunity to participate as member owners.”
