State DEP turns off surcharge fee for groundwater cleanup

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AUGUSTA — You may not notice it at the pump, but the Maine Department of Environmental Protection on Tuesday announced that a per-barrel surcharge paid on gas and oil imported into the state is going away, at least for now.

The surcharge, which is 20 cents a barrel on gasoline and 10 cents a barrel on all other petroleum products including heating fuel, goes to an account that’s used by the state to clean up contaminated groundwater sites. 

The surcharge is getting “turned off” because the fund balance is well beyond the $5 million minimum that triggers the surcharge under state law. 

With more than $9 million in the account, regulators were able to turn off the fees, which add up to about $5 million per year for gas and oil distributors.

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State law says if the fund drops below $5 million, the fees will be turned back on. DEP expects the surcharge holiday should continue for the rest of 2013.

Though they are paid by wholesalers and distributors of gas and oil at the terminal, those costs trickle down to the consumer, DEP spokeswoman Samantha DePoy-Warren said.

“We might not notice it right away at the pump, but over the course of the year it does add up,” DePoy-Warren said Tuesday.

A combination of effective financial management, cleanup bids that came in below expectations because of a weak economy and a decrease in the severity of the cleanups being done by the DEP, contributed to less stress on the fund, she said.

She said DEP managers have been strictly bidding the cleanup projects and that competition is driving down costs. She noted that the DEP is closing cleanup sites faster and saving on long-term monitoring costs.

In 2012, the DEP closed a record 158 sites. While there are still about 500 active sites left, the fund is expected to stay financially healthy through 2013, DePoy-Warren said.

The fund bottomed out in 2005 when it dropped to $3.5 million, which turned on the surcharge. But for the past three months, it has been above $7 million and is now more than $9 million, DePoy-Warren said.

The Fund Insurance Review Board, the independent board that oversees the State’s Groundwater Oil Clean-Up Fund administered by the DEP to pay for cleaning discharges of oil from storage tanks, also approved a reduction in the surcharge Tuesday.

A release issued by the DEP said cleaning up long-term spill sites so they could be returned to beneficial uses has been a priority of DEP Commissioner Patricia Aho and Gov. Paul LePage. 

Regulators expect the surcharge to remain off for the remainder of 2013. If and when it does go back on, it will be 2 cents lower for gasoline and 4 cents lower for other petroleum products. That change was also approved by the fund’s board Tuesday.

In 2012, 19.3 million barrels of gas and 16.2 million barrels of other petroleum products were imported into Maine, generating about $10 million in base fees and $5.5 million in surcharge fees for the Groundwater Fund.

In a prepared statement, FIRB board member Leslie Anderson of the Dead River Co. said the surcharge suspension was a positive move for taxpayers and the environment. 

“With many Mainers feeling the pinch during this tough economy, there is no better time to reduce taxes on necessities such as heating oil and gasoline,” Anderson said.

Jamie Py, another board member and president of the Maine Energy Marketers Association, said Tuesday the suspension of the surcharge was a positive step.  

He said that because of overall swings in the cost of fuels, most consumers, either those buying gas or heating oil, probably would not notice any price change. A 10- or 20-cent reduction on the per-barrel cost only amounts to fractions of a penny on a gallon of gas or heating oil, he said.

“Are you going to notice it?” Py asked. “Nobody’s going to notice it, to be perfectly honest. You are not going to see it.”

Still, the surcharge reduction is important because it helps retailers’ margins, which are small to begin with, Py said.

sthistle@sunjournal.com

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