Our industry’s progress depends on everyone doing their fair share

June 1, 2007 By    

2007 marks the 10th anniversary of the Propane Education & Research Council (PERC). As evidence of its commitment to the industry’s continued progress at this important juncture, the council has launched an important new campaign to improve the assessment collections process and increase participation in the annual Sales of Natural Gas Liquids and Liquefied Refinery Gases survey conducted by the American Petroleum Institute (API).

Bill McAdam Aux Sable Canada LP
Bill McAdam Aux Sable Canada LP

As chairman of the Assessment Collections Task Force (ACTF) appointed by the council, I’m asking for the industry’s support to help make the effort a success.

Assessment collections. To help meet its federal mandate, PERC depends on the assessments to support programs enhancing safety, educating consumers on propane’s value and researching and developing new applications for propane.

Assessments are collected to fund this important work under the federal law that authorized PERC. These are based on odorized propane use with the responsibility to remit the assessment to PERC by the owner of the propane at the point of odorization.

Most companies are in compliance with remitting the PERC assessment. We believe there are instances of non-compliance, likely due to administrative oversight or misunderstanding of the process. We would like to reach out to all industry participants and solicit your help in achieving the goal of ensuring that everyone pays their fair share.

Neither the states nor federal government collect propane odorization or information that might help in benchmarking PERC’s assessment receipts.

The Propane Education and Research Act (PERA) does not specifically require terminal operators to disclose to PERC how much propane they odorize for others. Although PERC requests that all terminal operators submit monthly reports regarding volumes odorized and the owner of the propane odorized, it is difficult to ensure full cooperation.

PERC recently initiated a heightened outreach to terminal operators to help increase their report submissions, and we are hoping the effort proves fruitful.

The task force already has identified opportunities to improve the assessment collections process and is working with PERC staff and Apex Integrated Solutions, PERC’s accounting and billing service that administers the collections effort, to implement improvements promptly.

All industry owners, managers and tax departments are urged to make a renewed effort to ensure that every odorized gallon of propane handled through their company has been assessed and the proper fee remitted to PERC. Several companies already have identified gaps in their systems that resulted in underpayment of assessments, so please review your internal systems to be sure the PERC assessments are properly accounted for.

Making the process easier. Based on PERC’s belief that most non-compliance is a result of misunderstanding the assessment processes, we have taken several important steps to help companies properly remit.

All of the following information and more can be found on PERC’s assessment Web link (available at propanecouncil.org.)

  • Enhanced assessment support systems to simplify the remitting process, including updated guidelines, electronic remittance forms, and help desk support.
  • A strict confidentiality policy that precludes any council or staff member from accessing any company’s volume or assessment information.
  • A waiver on interest and penalties if a remitter: 1) can demonstrate that an oversight of past assessments was unintentional, 2) voluntarily offers to rectify the situation on their own initiative, and 3) fully cooperates with PERC’s assessment investigations. The standard policy is a charge of a 5 percent penalty and 1 1/2 percent interest per month when assessments are overdue.

We also value your input and recommendations to continuously improve the assessment process, so please don’t hesitate to contact AIS at (856) 872-4761 or PERC@apex-is.com to share your ideas.

A special note to marketers. The API survey is our industry’s most important benchmark for assessment collections and propane sales nationally and state by state. It collects data on specific markets.

The API survey is vital to the allocation of state rebates, which account for one of every five assessment dollars. Considerable time and professional effort has been invested in improving the API survey. However, its precision and accuracy are ultimately dependent upon everyone in the industry participating in the survey.

About 58 percent of marketers responded to the last API survey. To you, I say thanks and keep it up. To the other 42 percent, I urge you to respond to the current survey on 2006 propane sales. The last deadline for returning your completed survey is June 22, 2007.

If you have questions regarding the survey or to obtain a copy, please call Pamela Gibson at API: (202) 682-8528 or Martha Evans at PERC: (202) 452-8975.

I thank you all in advance for doing your fair share on behalf of the industry and look forward to updating you on our continued progress.

William J. (Bill) McAdam is president and CEO of Aux Sable Liquid Products LP and Aux Sable Canada LP and a member of the Propane Education & Research Council.

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