LPG Spotlight: Blue Star Gas

In 2021, Blue Star Gas, now an 87-year-old company in California, established a power generation division. Today, the propane retailer offers both backup and primary power generation to homes and businesses.

When asked why people are turning to propane for power generation, David Lee, Blue Star’s power division director, had two words: grid instability.

“Power generation or backup generation seems to be viewed largely as a luxury item, but it’s becoming more of a necessity as grid instability grows,” Lee explains.

“The labor involved in an installation, as well as the equipment costs up front, are fairly significant,” Lee continues. “And until recently, power outages really weren’t a big story, so people viewed backup generation as, ‘I can get by. It’s not that big a deal. The power doesn’t go off that often. And so, do I really need this? You know, I can get by without it.’

“Now, as the need is becoming more frequent and more apparent, I would say it’s becoming less of a luxury item and definitely more of a necessity,” he says.

Lee also says there is a growing “awareness and desire for people to be less reliant on utilities,” which is contributing to the move to backup power generation.

“Here in California, we have extremely high utility costs,” he says. “So, we offer power generation just to offset those grid costs. We’re able to peak shave or, in some cases, completely remove a customer from grid liability.”

Peak shaving is an attractive aspect of propane power generation. In times of high utility demand, electrical prices can increase. During those periods, a propane-fueled backup generator can kick on and take over the power generation from the home’s main power source, saving the homeowner money.

“That is becoming more and more a part of the typical installation, especially as utilities rise,” Lee says.
Peak shaving can be especially important to Blue Star’s business and industrial customers, a space that Lee is working on expanding.

“Since I’ve been here, one of the things that I’m trying to do is expand into more commercial and industrial spaces, and not just home backup generation,” Lee adds.

Lee, whose background is in backup and primary diesel power generation, is also seeking to grow the company’s primary power generation capabilities.

“One of the things that I bring is the knowledge and familiarity with prime power,” he elaborates. “So that’s one of the things that I’m working to expand us into is more of a primary role.”

As part of its expansion efforts, Blue Star entered into a collaboration with EC Power. The partnership will enable Blue Star to incorporate EC Power’s XRGI25 – a 24-kilowatt combined heat and power system – into its product offerings.

“They’re a well-established Danish company that builds a really nice CHP package – combined heat and power,” Lee explains. “I’m really excited about the combined heat and power technology. It creates tremendous efficiency, and again, in our situation here, the ability to offset a lot of what the utilities are charging.”

To Lee, the power generation space is ripe for the taking.

“Having resiliency, having that backup capability, is only going to become more and more important,” he says. “It’s a great advantage for the propane industry to have this in their pocket.”

Company profile: Blue Star Gas

Year founded // 1938
Headquarters // Santa Rosa, California
Founder // Paul Stewart
Owner // Jeff Stewart
Generator installations in 2024 // Over 350
Total number of employees // Over 200
Number of employees in power generation unit // 8
Online // bluestargas.com

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