Vital Signs

July 1, 2008 By    

Ferrellgas Partners has withdrawn its membership from the National Propane Gas Association (NPGA) over claims of inequity in service provided to major retailers and independent marketers.

It marks the second time that Ferrellgas has left the association. The nation’s second-largest propane retailer also pulled out in 1992 before rejoining in 1998.

NPGA President Richard Roldan was notified of the termination in a May 28 letter from Ferrellgas President Stephen Wambold. Wambold declined a request for an interview to discuss the decision.

However, in his letter he expresses “frustration with the evolution of the NPGA from an organization that serves equally the interests of all of its members.”

“I remain convinced that it’s possible for the NPGA to satisfy the needs of the industry’s smallest retailers, the industry’s largest retailers, and everyone in between,” the letter says.

“That’s not what I’m seeing today and that’s why, after repeatedly expressing my concerns and not seeing the desired results, I’ve elected to sever our ties.”

Despite Wambold’s claims that he has made his concerns clear to Roldan in recent years, Roldan insists the decision caught him off guard.

“If this is strictly a value proposition, we can demonstrate quantifiably that we provide value for all members, including the multi-state marketers. We can demonstrate savings in excess of dues,” Roldan said in a June 6 interview.

The decision will impact the association on several levels.

NPGA will lose almost $150,000 in annual dues payments – about 2 percent of its dues revenue.

Wambold and Director of Propane Acquisitions Daryl McClendon serve on the NPGA board of directors. Wambold will surrender his seat, but McClendon’s will remain as a past NPGA president. However, he no longer will serve on its powerful Executive Committee since he was elected as a Ferrellgas representative.

Because of rules that require multi-state retailers to be NPGA members before joining local associations, Ferrellgas also will pull more than a dozen employees who serve as officers in local associations. The company, which pays an additional $200,000 a year in dues to state and regional propane associations, operates in all 50 states.

“We would love to remain active at the state association level, but it appears that is not possible. Our beef is with the national level,” Ferrellgas spokesman Scott Brockelmeyer said.

The defection also raises the question as to whether other propane retail giants share Ferrellgas’ concerns and might also consider leaving.

“We insist this is an opinion not unique to Ferrellgas,” Brockelmeyer said, declining to identify the others.

Roldan said he is unaware of any discontent from the other multi-state marketers. In fact, he received a note of support from AmeriGas President and CEO Gene Bissell, who chaired the NPGA board in 2002-03.

“I am convinced that the dues we pay to NPGA are a high return investment for AmeriGas. NPGA is an effective advocate for our industry, at a time when the stakes are high. I am not aware of times when the interests of small and large marketers have diverged, and I have seen the benefit of an industry association that includes not just marketers, but all of the stakeholders in our industry,” Bissell wrote in a June 8 memo to Roldan.

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