Article

Heard it in The Big Easy

A few interesting items flew under the radar at the National Propane Gas Association’s February board meeting in New Orleans the week before Super Bowl Sunday.

NPGA filing FTC complaint
NPGA will file a formal complaint with the Federal Trade Commission against Thrifty Propane for advertising it claims is patently deceptive and in violation of federal and state consumer protection laws.

The Ohio-based company says on its Web site and in direct mail promotions that it sells cleaner fuel than its competitors. It claims most Midwestern propane marketers don’t purchase product from regulated pipelines, but instead offer “refinery slop.” Competitors’ product produces “... a weak, mottled flame that hangs on to a stew of refinery by-products, with little or no propane in the mix,” the Web site contends.

NPGA in 2006 and 2008 sent letters to company President Angela Alderman demanding it cease. The second also challenged the company’s “Truth in Pricing” claims that it sells only cleaner burning, pure HD5-grade propane, and that federal regulations only require propane to be 51 percent pure.

Thrifty has not responded to NPGA or complied with its requests.

Manufacturers challenge testing
NPGA’s Manufacturers Section members have written a letter raising concerns about the use of PERC funds for its Consumer Reports-style comparison testing of products used in the propane industry.

The group, which represents the manufacturers of some of the products being reviewed, says it does not object to studies that involve the testing of products. They say they want the studies to be performed “in a fair manner so that no manufacturers are placed at a disadvantage when the results of the study are released.”

They also say the studies should not be used to show that one company’s product performed better than another, and that manufacturers should not be listed or rated in the final report.

The program is modeled after the popular Consumer Reports magazine that assesses thousands of products for the general public. PERC launched it in 2006 to give marketers a tool to evaluate competing brands of equipment beyond promotional material from manufacturers and vendors.

Since then, evaluations have been done on relief valves, regulators and underground tank coatings.

Ferrellgas state membership
The Minnesota Propane Gas Association has denied a request to reinstate membership to Ferrellgas L.P. because of a very messy public battle being waged with state Attorney General Lori Swanson.

Swanson filed suit against the nation’s second-largest marketer last October, alleging that the company deceived its residential customers about rates and fees charged for heating fuel. Ferrellgas counter-sued, insisting it hasn’t violated laws and that Swanson exceeded her authority.

MPA Executive Director Roger Leider says the investigation has scrutinized the entire propane industry in Minnesota. The attorney general is urging consumers to shop propane suppliers for the cheapest price and get written price guarantees.

Ferrellgas dropped out of NPGA in 2008 over claims of inequity in service provided to major retailers and independent marketers. Because of affiliation agreements, that triggered its automatic removal as state association members as well.

Ferrellgas has recently rejoined NPGA. According to association rules, the intrastate marketer is required to join all state associations in which it operates. Ferrellgas is one of the largest marketers in Minnesota with some 50,000 retail customers.

But the MPA board says the retail giant needs to resolve its legal issues with the state before returning.