A small independent propane marketer from South Dakota faced a tall task only months after assuming the chairmanship of the National Propane Gas Association (NPGA).
After taking the reins from Blossman Gas’ Stuart Weidie in June, Jerry Brick of North Star Energy urged the industry to become more aggressive in marketing propane to consumers and to find new ways to adapt and grow its businesses.
But not long after NPGA installed Brick, his focus shifted to unification amid philosophical differences between the national association and two of its largest members. A 40-year veteran of the propane industry, with a quiet demeanor and determination, Brick went to work on an issue he didn’t see coming.
These philosophical differences were at least part of the reason Suburban Propane, the nation’s third-largest marketer, indicated its intentions in recent months to withdraw from NPGA. Meanwhile, Ferrellgas, the second-largest marketer, informed NPGA that it’s withholding dues payments until its concerns are addressed. Marketers and state and district directors discussed these developments during NPGA’s fall board of directors meeting in Minneapolis.
Brick vowed he wouldn’t leave the city until forming a task force and a plan that would help open a dialogue with the two companies.
“We want to get these folks back into the fold,” Brick says. “My goal is to build a bridge, not burn a bridge. I want to get a better understanding of what Ferrellgas and Suburban Propane really want.”
Part of the discussion
Two issues in particular appear to be at play for the companies: support of minimum membership standards and opposition to the association’s state affiliation agreement.
Following the winter of 2014, Suburban Propane proposed that NPGA create enforceable membership standards, including minimum storage and insurance requirements, as a condition of membership. An NPGA task force explored the idea and concluded that changing the association from an advocacy organization to an enforcement organization was inconsistent with its mission. A vote by its Executive Committee confirmed the decision.
“We determined that our mission is as an advocacy group and our membership dollars are better spent working with DOT, OSHA, EPA – with all of the government organizations and on any number of things that can create a better environment for our members to do business in,” Brick says.
With NPGA’s affiliation agreement, which traces back to 1949, propane marketers essentially belong to both their state and national associations. Intrastate marketers, those primarily located in one state, become NPGA members by first joining their respective state or regional propane associations. Multistate marketers, including Ferrellgas and Suburban Propane, first join NPGA and automatically become members of the affiliated states and regional associations in which they do business.
Ferrellgas and Suburban Propane would like to see NPGA abolish this requirement.
“We would like to support the associations we believe serve the industry,” Ferrellgas Interim CEO Jim Ferrell writes in a company letter to Brick. Ferrell lists several points that he says would move the industry into modern times.
NPGA presented details about the affiliation agreement in Minneapolis. It says the agreement allows for a unified industry voice when working with legislative and regulatory bodies and it helps state associations budget for the future, knowing their largest members will participate.
“Because two of our largest members raised the issue of affiliation, we must have this discussion to see if the policy continues to make sense and whether it can be improved,” says Rick Roldan, president and CEO of NPGA.
Not only do the state and national associations risk dues revenue losses totaling hundreds of thousands of dollars without the two majors, but they also lose employee contributions to various committees.
Employees from both companies have sat on boards, committees and task forces and “really helped this industry become stronger and safer, and we’re grateful for their contributions,” Brick says.
NPGA and its members haven’t always seen eye to eye. Ferrellgas pulled its membership in 1992-98 and 2008-10. Brick, however, hopes this isn’t the end of the companies’ ties to NPGA – but a chance for leaders to communicate about the issues and move forward together.
“The association needs to stay focused,” Brick says. “We still have 2,800 members out there depending on us to watch what’s going on in Washington and in the state associations. We’re not going to take our eye off the ball.”