GRAIN VALLEY, MO – The National Conference on Weights and Measures (NCWM) will tackle the issue of automatic temperature compensation (ATC) during its annual conference, July 12 to 16 in San Antonio, Land Line Magazine reports.
Some consumers and activist groups have called for retailers to sell fuel using a standard temperature benchmark of 60 degrees rather than by volume (and without temperature compensation), as is currently the practice. They claim that fuel "expansion" in warmer climates shortchanges consumers.
Retailers have argued that the allegations are overblown, that competition ensures the consumer gets the best value for each dollar spent, and that variations in temperature are already reflected in fuel prices. Also, both oil companies and fuel retailers say that adding automatic temperature compensation equipment is an expense that will drive up the cost of fuel for consumers.
The NCWM conference will consider a specific agenda item addressing whether or not to authorize states to institute mandatory or voluntary standards for automatic temperature compensation equipment.
In March 2009, the California Energy Commission (CEC) completed its work on a cost-benefit analysis of ATC in California and submitted its report to the state legislature. The report concluded that, under all scenarios, the costs far exceeded any potential benefit for the consumer. However, the CEC sought to estimate the economic value of “increased transparency” afforded by ATC and recommended that the legislature consider whether consumers would be willing to pay a slightly higher price for fuel in exchange for what some consider to be a more consistent and “fair” motor fuel gallon. This recommendation ignored the CEC’s own estimated costs of at least $7 million in recurring expense each year compared to an estimated “transparency” benefit of $257,000 annually.
In 2008, NACS joined with PMAA, NATSO and SIGMA to commission an economic analysis on the costs and benefits of ATC, which was prepared by LECG Inc., a global economic and financial consulting firm. NACS and the other marketer associations are using the findings from the LECG study (PDF), as well as those from the CEC study, at regional meetings and at this national meeting to ensure that regulators understand that ATC is an economic net loser for consumers.
The NCWM is scheduled to cast what might be a final vote on this topic at its July meeting. In Congress, there has been no action on any legislation regarding this issue since the 110th Congress.
Retailers are encouraged to attend the NCWM Annual Meeting to deliver their comments during the open committee hearings.