Propane Education & Research Council Approves $21.2 Million Budget

Sets Assessment Rate At 2/10-cent for 2001; Evaluation of Council Programs is Major Focus of Meeting


September 21, 2000

Washington, DC - The Propane Education & Research Council (Council) met on September 19 in the nation's capital where it conducted an extensive review of its funding programs over the past two years and unanimously approved a $21.2 million budget that sets the assessment rate on odorized propane at two-tenths-cent per gallon in 2001.

In July, the Council proposed the budget, which was distributed for industry review and comment (July 26-September 8). Based on feedback from the Council's Consumer Education Advisory Committee, the Council allocated additional funding to the consumer education mission to adequately fund a nationwide trade and consumer advertising program in 2001. Funding for research and development and safety and training were adjusted to provide the additional funding for consumer education.

"Approving this budget is the beginning of good things for the propane industry," said Propane Council Chairman Daryl McClendon, president, Platinum Propane, Hinsdale, Illinois. "Compared to 1999 and 2000, we will significantly expand investments in safety and training and research and development, and finally be able to launch a nationwide consumer education program."

By law, the budget must now be sent to the U.S. Secretary of Energy before going into effect on January 1, 2001.

2001 Budget


Revenues   $21,210,000
Administrative    $ 1,342,000  (6.3%)
Consumer Education     $ 6,980,000
 Research & Development     $ 5,480,000
Safety & Training $ 2,570,000
 Industry Programs $ 525,000
Other Expenses $ 193,000


Evaluation of Programs and Projects - The Council devoted most of its meeting to a mission-by-mission review of the programs and projects funded over the past two years. It also heard from evaluation expert Dr. Gary Williams with the Texas Agricultural Market Research Center at Texas A&M University who shared his expertise on the ways many check-off programs are being evaluated. Dr. Williams complimented the Council on the evaluation process it has put into place to review individual projects and encouraged the Council to collect data on the industry and its markets that will enable the Council to calculate the industry's return on its assessment investments over time.

"The review systems we have now for evaluating specific funding requests are serving the industry well, but we are searching for ways to improve them," said Roy Willis, Council president. "We also need ways to measure the cumulative impacts of those projects on the industry. To do so, we will need the industry's strong support for the benchmarking survey this year and for years to come." Willis encouraged propane marketers to complete and return the questionnaire surveys recently sent to them by Market Analytics, Inc. for the first Industry Statistical Survey.

Research & Development Advisory Committee (RDAC) Chairman Mark Alexander, CEO, Suburban Propane, Whippany, New Jersey, reported on the detailed project evaluation procedures developed by RDAC members. Since its inception last October, the RDAC has reviewed nearly 90 projects submitted to the Council for funding. To date, 39 projects have been approved totaling $5.1 million while another 32 have been declined funding. Sixteen projects are under review.

Joe Colaneri, executive director, Propane Vehicle Council (PVC), presented a progress report on the Council's investments in the motor fuel market. Since 1998, the Council has approved just under $1 million for vehicle projects. Working in partnership with the PVC, the Council has leveraged that investment into $8.7 million by raising matching funds from the federal government and other public and private organizations to support numerous projects.

Safety & Training Advisory Committee Chairman Ray Enstine, president, C.W. Pulver Inc., Bridgehampton, New York, reported on the projects being implemented in the safety and training area including the successful Propane Emergencies program. Working with the National Propane Gas Association, the Council has made the distribution and promotion of the award-winning training program a priority project in the safety and training mission. Enstine said that developing a long-range plan for safety and training is a top industry-wide priority.

Consumer Education Advisory Committee (CEAC) Chairman Tom Jaenicke, region vice president, Ferrellgas, Flint, Michigan, presented an overview of the market research that has driven the Council's national consumer education initiatives. "One of the goals of the CEAC is to ensure that all projects are aligned with the Council's strategy to reach the right markets with the right messages about propane," said Kate Caskin, Council's vice president of communications.

Grants and State Rebates - The Council approved grants ($623,780) and state rebates ($470,104) totaling $1,093,884. It also approved a recommendation from the Council president to schedule an additional funding review session for the April 2001 meeting. States are eligible to receive rebates equivalent to 20 percent of the Council's annual assessment collections. Approved grants include the following:

Research & Development:
Council Fuel Cell Project, Year 2 (Advanced Development and Demonstration)-- Propane Education & Research Council ($85,100) (docket #10337)

ASME Container Fire Resistivity Study-- Michael A. Langerman, Ph.D. ($9,400)(docket #10315)

Safety & Training:
Propane Emergencies Supplemental Facilitator's Guides Printingun-- National Propane Gas Association ($35,000) (docket #10338)

Consumer Education:
Propane Vision and Technology Roadmap Printing and Distribution-- Propane Education & Research Council ($9,280)(docket #10339)

2001 Trade Advertising Initiative-- Propane Education & Research Council ($485,000)(docket #10340)

New Council Officer - The Council elected Dale Delay, PG&E NGL Marketing LP, Houston, Texas, to serve as Council Secretary. Mr. Delay replaces founding Council member David Lugar who has resigned from the Council due to a job change in the propane industry. The Council honored Mr. Lugar for his service and leadership.

Next Meeting - The Council will meet next in Dallas on December 5-6, 2000.

2001 Calendar - Council Meetings
April 10-11:  Atlanta (Grants/Rebates/Strategic Planning)
July 17-18:  Chicago (Grants/Rebates/2002 Budget/Officer Elections)
September 18-19:  Washington, D.C. (Evaluation of Programs/Rebates)
December 11-12:  Houston (Grants/Rebates)

The Propane Education & Research Council was authorized by the U.S. Congress with the passage of Public Law 104-284, the Propane Education and Research Act (PERA), signed into law on October 11, 1996. The mission of the Propane Education & Research Council is to promote the safe, efficient use of odorized propane gas as a preferred energy source.