WASHINGTON – NACS Vice Chairman Sonja Hubbard, CEO of E-Z Mart Stores, is testifying today before the House Energy and Commerce Committee on behalf of NACS and SIGMA members. The issue: provisions contained in draft legislation concerning an alternative fuels infrastructure program that would require retailers to install E-85 compatible fuel equipment.

"Let me state clearly and unconditionally: NACS and SIGMA are strongly opposed to this provision. It is anti-free market; it will put retailers in significant economic jeopardy; it is an extreme overreaching by the federal government into private enterprise; and, it is unsupported by existing or anticipated market conditions," says Hubbard in her testimony.

Hubbard acknowledges the efforts made by committee staff to address some of the itemized concerns expressed by NACS regarding such a mandate, but says that no combination of provisions would overcome the industry's opposition to a mandate.

She adds: "The fundamental problem is that if a retailer is forced to install E-85 against its will, the bill before the committee fails to ensure that consumers will actually purchase E-85. In other words, the proposal imposes an expensive mandate on us without any promise that our forced investment will provide any return."

Hubbard notes that in order to convert one of E-Z Mart's newer stores to sell E-85, the company would face an expense of at least $11,000, which does not include labor expenses. "For older locations, the cost would be considerably higher than this. According to colleagues in the industry who have installed E-85 systems, such an investment would be considered a bargain. One reported spending upwards of $55,000 on a new system, while another in California reports the cost of installing a basic diesel system at more than $200,000 – not including the up-charge associated with compatible equipment." 

And then there is the issue of consumer demand. Hubbard says that retailers are willing to sell whatever products their customers demand, and that the industry is following E-85 developments. However, some retailers report their conversions to E-85 compatible equipment have not produced positive results.

Hubbard notes that most drivers of flex fuel vehicles "do not want to buy E-85 unless it is offered at a substantial discount compared to gasoline," and because they have a decision whether to purchase E-85 or regular gasoline, "they make economic decisions when at the pump."

In conclusion, Hubbard says that NACS and SIGMA members are extremely sensitive to customer concerns about motor fuel prices, as they compete with each other on the basis of "pennies per gallon." However, she stresses that the industry is "very concerned regarding any proposals that could potentially affect supplies or distributing efficiencies or otherwise put upward pressure on prices," and therefore is urging the committee to "consider carefully the supply and price implications of policies under your jurisdiction. Our customers, your constituents, deserve no less."

To read Hubbard's complete testimony, click here (PDF).