GROUPS MEET WITH TREASURY ON CREDIT CRISIS

On Wednesday, November 20th a group from Connecticut, [Gene Guilford & Jim Meehan] New Jersey, [Eric DeGesero & Ed Miller] Vermont, [Matt, Cota, Sean Cota, Chris Keyser] Rhode Island, [Julie Gill] as well as Shane Sweet from NEFI and Dan Gilligan from PMAA [10 people] met with Assistant Treasury Secretary for Economic Policy Phillip Swagel and Deputy Assistant Secretary for Business Affairs and Public Liaison Jeb Mason. Asst Secy Swagel reports directly to Treasury Secretary Paulson. Senator Dodd prevailed on Secretary Paulson directly on our behalf to have this meeting. The nine original signatories of the original letter to Secy Paulson also signed a briefing memorandum presented to Treasury in advance of the meeting.

Treasury officials said that many, many industries are coming to them about the lack of lending in the banking community. What makes us unique is the seasonality of our needs. Treasury officials said that they had not been aware of our industry's need before we reached out to them. 

Marketers attending did an excellent job presenting the issues involved in access to capital, or lack thereof, and the critical nature of the onset of winter and our need for access to private lending and the degree to which private lending has yet to be motivated either by federal or state agency loan guarantees or the funding the Treasury is providing under the Troubled Assets Relief Program (TARP). While TARP only passed six weeks ago, we don't have the time to wait for things to shake out, given our needs for access to capital and where the banking community is.

Many regional wholesaler's view of some of their retailer relationships is that retailer's credit will likely run out in Jan/Feb, and other wholesaler's believe that somewhere near half of their retailer customers are, on a mark-to-market basis, technically bankrupt. The fall-out from this condition will publicly reflect on our industry - it will have an effect on consumers - it will have an effect on the wholesale supply industry - as there will be failures in the retailer community in the hundreds across the region and there is simply no way to finance our way out of that in many cases. That doesn't mean we won't do our utmost to assure companies who can borrow that they get the opportunity to by using the means we have undertaken to accomplish that.

Congress considered abolishing “mark-to-market” valuation of assets in the passage of the Emergency Economic Stabilization Act, and many well-respected economists have stated that “mark-to-market” valuation is a big part of the reason for our nation’s fiscal trouble. Steve Forces appeared on CNBC this past weekend with former Clinton Administration Labor Secretary Robert Reich - from the left and the right there is sentiment that mark-to-market accounting has deepened the mortgage crisis that led to the banking and lending crisis.  See the Wall Street Journal's treatment of the issue> http://online.wsj.com/article/SB122576100620095567.html\

In short, Treasury officials after our 90 minute meeting directly stated that "they get it," and asked us to provide a list of the major banks we deal with so that they can work with them to help the banks see the "obvious," and do whatever they can to help spur reasoned, rational and prudent lending and to do it now. Everyone is assembling their major private lender lists today and that will be coordinated into a single list and sent to Treasury on Monday the 24th.

After the Treasury meeting Jim Meehan and Gene Guilford met with Senator Dodd's staff and representatives from Dodd's Banking Committee. Dodd's people will work with Treasury officials on the matter of helping banks see the obvious.

ICPA also met on November 21st to brief Dept of Consumer Protection Commissioner Jerry Farrell and the Governor's staff on this issue, and to request the Governor do what she can to reinforce among the state's lenders of the importance of the need for borrowing among the petroleum industry.

• Capital markets being locked up means lending to small businesses and consumers shuts down or gets very difficult and the fact is the $700 billion Congress appropriated that is designed to free up lending hasn't reached Main Street yet.
• We are the face of Main Street, local businesspeople who live in the communities where we work. Wall Street speculators drove energy prices through the roof this spring and early summer – predicting $200 a barrel crude oil and $5 or $6 a gallon heating oil. Consumers came to us in great numbers and demanded protection. Our companies had to lock in very expensive wholesale supply in order to meet that consumer demand. Prices have fallen 55% since mid-July, but not for those retailers and consumers who locked in their supply.
• The Senate Banking Committee says "The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. "
• We are among those small businesses having difficulty accessing credit.
• Despite the actions of Congress and the Treasury, many fuel companies still do not have access to the capital we need to borrow in order to maintain our businesses and serve our consumers.
• These small businessmen and women are not asking for a bail out or a hand out. They want to borrow money and pay it back. We simply want the system to work as Congress intended – to free up commercial and consumer lending. This is the point of Emergency Economic Stabilization Act.

For more information contact Gene at gene@icpa.org or call ICPA toll free at 1-866-521-ICPA

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• State Deficit to be Addressed in Special Session

Governor Jodi Rell has called the Connecticut General Assembly into a special session to consider her recommendations to reduce the state budget deficit.  With significantly declining revenues from the state income tax, petroleum gross earnings tax, casinos and other taxes the shortfall is estimated at approximately $350 million.  The state's budget has been a matter of great media discussion. Estimates are for a $6 billion deficit over two years out of roughly $31 billion. Unofficially, from the inside it's likely twice as big as that. There is a special session on 11/24 to deal with that. 60% of the state's income taxes are paid by 15% of the wage earners and 1/2 of that 15% is expected to be unemployed this year. Fairfield County and its role in national finance is taking a huge hit.

It is anticipated that the legislature will consider several cuts including, raising $40 million by waiving penalties and interest for delinquent taxpayers, seizing unclaimed bottle deposits to raise $13.8 million, transferring $14.5 million from a savings account used to pay retirement benefits for state employees and reducing spending in a wide variety of other accounts by nearly $41 million.  

The Governor’s plan to alleviate the deficit relies on a combination of spending cuts, new revenue owed Connecticut by the federal government, a tax amnesty program, the cancellation of the start of new state programs and additional efficiencies in state government.  The plan requires no new taxes, no employee layoffs and it leaves $1.4 billion in the Rainy Day Fund for future use.  Once the legislature resolves the current deficit in this special session, they will have to address a reported $6 billion deficit for 2009 and 2010 in the regular January session.  

ICPA will monitor several programs (high efficiency heating sales tax exemption, commercial tank fund, bio grant program, fuel oil conservation fund, etc.) that have benefited the petroleum industry and guard against increased taxes that affect the industry.  

• ICPA met personally with the House Democrat and House Republican caucuses, as well as the Senate Democrat and Senate Republican caucuses and representatives of the Governor's office prior to the Special Session to determine if any non-budget issues were going to be allowed to be heard. The Governor's office stated emphatically no, no non-budget related issues were going to be dealt with in this Special Session.

• Stand Up & Be Heard – ICPA’s Legislative Agenda

In an effort to accurately represent petroleum marketers interests, ICPA Legislative Committee chair Tom Devine of Devine Brothers ( Norwalk ), is asking members to submit issues that affect their business for consideration in the upcoming 2009 legislative session that begins in January.  ICPA members are asked to forward suggestions for potential legislative changes that effect taxes, licensing, transportation and environmental issues.  Your communications to us about these important issues help ICPA formulate an agenda that is responsive to your companies needs.  Click here for the online version of Stand Up & Be Heard.

• State Clean, Tune & Test Program Underway

ICPA recently hosted an information session conducted by the Office of Policy & Management (OPM) that provided information on how to participate in a new program to help Connecticut oil heat consumers save money by making their heating systems and homes more energy efficient.  The new program, which began on November 15^th, starts with a clean, tune and test of a customer’s heating system and then the efficiency of the system is audited.  Once the clean, tune and test is complete, the customer will be referred to the Home Energy Solutions (HES) program, which performs a whole-house energy audit.  To qualify for the program, consumers need to contact their licensed HVAC contractor to schedule a clean, tune and test between November 15^th and June 30, 2009.  HVAC contractors will be required to bill their customer $75 and balance bill the state $125 to pay for the clean, tune and test.  For more information and to register for the program click here http://www.ct.gov/opm/cwp/view.asp?a=2994&q=428502.  For oil dealers who are interested in becoming HES certified ICPA will be announcing dates for training shortly.

For more information contact Chris at chris@icpa.org or call ICPA toll free at 1-866-521-ICPA

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• ICPA Annual Holiday Celebration

December 4, 2008. 5pm to 7pm  St. Clements Castle, Portland, Connecticut. Special Guest, CT Attorney General Richard Blumenthal

Website > http://www.saintclementscastle.com/home/default.asp

Register here > http://www.icpa.org/store/products_view.php?url_product_id=439

Sponsored by Federated Insurance

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For more information contact David Chu at chu@icpa.org  or call ICPA toll free at 1-866-521-ICPA

Meeting the energy needs of the most vulnerable of our citizens is a challenge made easier by ensuring those consumers know about a variety of important assistance programs available to them. ICPA has assembled a document that allows everyone in your company to easily convey this information to your customers.

See > http://icpa.org/protect/heating_asst_consumers_icpa.pdf

For more information contact Gene at gene@icpa.org or Chris at chris@icpa.org or call ICPA toll free at 1-866-521-ICPA

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MARKETERS WIN ONE AT EPA

In 2007 ICPA approached the New England Fuel Institute with a request to engage other states and the U.S. Environmental Protection Agency over the issue of certain EPA field inspectors requiring heating oil marketers with on-site storage to not only have SPCC plans for the storage but to include the delivery trucks parked on the same property in the SPCC plan.  This was not only impractical but also likely beyond the scope of Congress' intent when it passed the Clean Water Act and the first SPCC plan requirements in 1973. In December of 2007 ICPA also wrote to Connecticut's Congressional delegation, asking our Members of Congress to weigh in at EPA with concerns about this practice. See ICPA letter here. This week we had good news for marketers as NEFI informs us that the U.S. Environmental Protection Agency (EPA) has exempted cargo tank vehicles, including heating oil trucks, from sized secondary containment requirements under Spill Prevention, Control and Countermeasure (SPCC) rules while parked at bulk plant facilities. 

The victory could save members thousands of dollars in otherwise costly and burdensome compliance costs and potential fines for non-compliance. ICPA thanks NEFI for taking this on and securing this important regulatory victory for heating oil retailers.

This is a major victory for marketers, who were required under the former SPCC rule to provide "size" secondary containment for trucks parked with product that would be sufficient to hold the contents of the single largest compartment. NEFI was quick to act on this issue after members in EPA Region I (New England) began reporting cases of enforcement of this obscure provision, imposing stiff fines on some heating oil dealers and requiring construction of expensive secondary containment areas for parked trucks.

Under the new SPCC rule, petroleum trucks parked at bulk plants are not required to be parked within secondary containment structures. Instead, these trucks must comply with the general secondary containment provision which requires containment of the "most likely" release, which in this case would be a leaky valve or hose rather than a catastrophic release from a compartment. As a result, heating oil and other fuel dealers can now meet SPCC secondary containment requirements for parked trucks by providing release protection as simple as drip pans and absorbent.

EXEMPTION PART OF BROADER RULEMAKING

The development came as part of a broader, 200+ page rulemaking released this week making a final round of amendments to the SPCC regulations. NEFI had submitted comments to the EPA earlier this year advocating for the exemption, and the completely agreed with NEFI's arguments, especially the unwarranted burden it places on small business fuel dealers.

The rule makes many other modifications to the SPCC rule of interest to members, including:

• An exemption for residential heating oil tanks in single family homes;

• modifications to the ""navigable waters" definition in order to comply with a recent Supreme Court ruling; and 

• a delay in the SPCC compliance deadline for plan revision and implementation from July 1, 2009 to November 20, 2009. [NEFI]

DEMOCRATS NOW HAVE 58 SEATS IN THE SENATE

The Associated Press has called the Alaskan Senate race in favor for Democrat Mark Begich who added another 2,700 votes to his narrow margin over longtime Republican incumbent Sen. Ted Stevens. Stevens, who was found guilty for failing to report home renovations totaling $250,000 on Senate financial disclosure forms, was already facing possible expulsion in the Senate Republican Caucus. The Alaskan race was very important to the Senate Democratic majority which now is only two seats short from reaching the 60-vote filibuster proof threshold.

Two other Senate races are yet to be decided. In Georgia, Republican incumbent Senator Saxby Chambliss will face state Senator Jim Martin (D) in a run-off election December 2. Current polls show a close race. In Minnesota, a hotly contested race between Republican incumbent Sen. Norm Coleman and Democratic challenger Al Franken has yet to be decided. Currently, Senator Coleman leads Franken by 174 votes out of almost three million cast. A state-wide hand recount is underway.

REPRESENTATIVE HENRY WAXMAN (D-CA) OUSTS ENERGY AND COMMERCE COMMITTEE CHAIRMAN JOHN DINGELL (D-MI)

Representative Henry Waxman (D-CA) defeated longtime Chairman John Dingell (D-MI) of the House Energy and Commerce Committee in his bid to lead the committee in the 111th Congress. The decision came down to the entire House Democratic Caucus in which Waxman won 137 votes to Dingell’s 122. Waxman, who many expect will bring an aggressive environmental (and anti-oil) agenda to the Energy and Commerce Committee, will oversee global climate change legislation, energy legislation and FDA tobacco legislation. Dingell, an advocate for the U.S. automobile industry, will have the title of Chairman Emeritus but he will not have control over decisions made within the committee. Today’s vote follows yesterday’s vote in the House Democrat Steering and Policy Committee where Waxman was endorsed over Dingell by a vote of 25 – 22. Waxman’s victory gives him control of one of the most powerful committees in Congress with jurisdiction that touches almost every corner of domestic policy from energy to health care to telecommunications.

PRESIDENT-ELECT OBAMA TO PROPOSE UBER-ENERGY POST IN THE WHITE HOUSE

The President-Elect has stated his intention to provide an economic stimulus in the area of creating 5 million new "green jobs" through innovations in new energy technologies in order to move the country away from fossil fuels. The President-Elect is also expected to create a new White House post that will coordinate and oversee the U.S. Environmental Protection Agency, the U.S. Department of Energy and the U.S. Department of the Interior toward the goal of producing the results from the planned expansion of "green jobs"  - dramatically reduce imports of oil from the Middle East and Venezuela - and introduce carbon emissions reductions and global warming initiatives as outlined in http://my.barackobama.com/page/content/newenergy

For more information contact Gene at gene@icpa.org or call ICPA toll free at 1-866-521-ICPA

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Fall into Savings 2008

COCARD launches the new Fall into Savings Program and Sweepstakes. Oil heat and propane dealers can save up to 40% on their credit card processing fees and get chance to win an exclusive 5-day VIP package to the 2009 Arnold Palmer Invitational in Orlando, Florida, compliments of MasterCard.

“We recognize that oil heat and propane dealers are facing some very daunting cash flow challenges this winter” said Tracy Richmond, V.P. of COCARD. “We want the dealers to know there is an IMMEDIATE way to start keeping more of the money they earn and reduce their credit card processing expenses by up to 40%.” 

COCARD is the preferred processing partner of many state and regional energy associations , and it utilizes its extensive knowledge of the programs available to the energy industry to GUARANTEE savings no matter which company currently does the dealers' processing. It is the country's recognized expert in the MasterCard Utility Industry Program, which offers an interchange rate for qualifying one-time and recurring U.S. consumer credit MasterCard card, World MasterCard® card and Debit MasterCard® card transactions. "COCARD has been very active with ICPA over the last 5 years to enhance and improve the benefits the Oil Heat and Propane industry receive from credit cards” Richmond stated. 

In addition to saving money immediately, any dealer which signs up for the MasterCard Utility Industry Program and runs their first transaction with COCARD before December 31, 2008 will get a chance to win an exclusive 5-day VIP package to the 2009 Arnold Palmer Invitational in Orlando, Florida. The package, courtesy of MasterCard, includes travel, accommodations, VIP hospitality and the chance to cross the barrier ropes and walk in the fairway as the world’s best golfers compete. 

For more information please call COCARD at (866) 849-8800 or visit www.fallintosavings.com

For more information contact David Chu at chu@icpa.org  or call ICPA toll free at 1-866-521-ICPA

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PRICES CORRECTED TO THE BTU EQUIVALENT OF HEATING OIL http://icpa.org/protect/degreeday.htm

DPUC/Yankee Natural Gas	$2.75
DPUC/Connecticut Natural Gas	$2.40
DPUC/Southern Connecticut Natural Gas	$2.53
DPUC/Connecticut Light & Power	$7.44
OPM/Propane Statewide Average	$4.31
OPM/Heating Oil Statewide Average	$2.77
Wood Pellets*	$2.65

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*At $310 per ton, delivered, premium pellets with less than 5% moisture content

For more information contact Gene at gene@icpa.org  or call ICPA toll free at 1-866-521-ICPA

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ITEC's Newsletter is found at ITEC NEWSLETTER - November 24, 2008

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