FEDERAL RULE CHANGE COUD COST PROPANE USERS MILLIONS, INDUSTRY ASSOCIATION SAYS

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East County News Service

January 24, 2017 (Washington D.C.) -- The Trump Administration has not yet announced if it will roll back a rule imposed by the U.S. Department of Transportation (DOT) during the Obama Administration that effective yesterday, imposes $125 million in new costs on propane consumers, according to a press release issued by the National Propane Gas Association (NPGA) last week. 

On Monday, January 23, 2017, approximately 5 million propane cylinders, including many that are used for home heating, forklifts, and even grill cylinders, became out of compliance with DOT regulations. 

In 2016, the Pipeline and Hazardous Materials Administration (PHMSA) made a major change to a decades-old regulation that reduces the time propane marketers have to initially requalify a propane cylinder from 12 years to 10 years. 

“This action is an unlawful violation of the Administrative Procedure Act (APA),” a press release issued by the NPGA contends. “The APA requires that affected parties have an opportunity to comment on any changes that might create new obligations for stakeholders.  DOT misled the propane industry in the initial notice of proposed rulemaking saying, `Costs associated with the rule are estimated to be negligible annually…. [T]hese requirements would not impose new requirements on current non-holders of SPs [special permits].’” 

In the rule PHMSA cites the number of affected business at 50.  The reality is this rule affects thousands of companies, starting with approximately 3,000 propane marketers, according to the NPGA.

Phil Squair, NPGA’s Senior Vice President for Public and Governmental Affairs said, “We estimate that this rule will cost more than $125 million.  Calling that amount of money ‘negligible’ indicates more education needs to be done with regard to how these kinds of regulations affect small businesses.”

On Friday, January 13, NPGA filed a Petition for Rulemaking & Emergency Stay for Cylinder Requalification Requirements before PHMSA.  The petition outlines the extensive reasons for issuing a halt on the enforcement of this rule until a lawful rulemaking process can commence. 

 


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