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DEP shuts off fuel surcharge to save Mainers millions

Improved fiscal management at the Maine Department of Environmental Protection will save Mainers millions of dollars this year when they fill up on fuel to heat their homes and power their cars.

For the first time in seven years, DEP has turned off the 20-cent-per-barrel surcharge on gasoline imported into the state and the 10-cent-per-barrel surcharge on all other petroleum products—including home heating oil.

That move will prevent an estimated $5.5 million in surcharges in 2013 and is supported by the Fund Insurance Review Board (FIRB), the independent board that oversees the State’s Groundwater Oil Clean-Up Fund, administered by DEP to pay for cleaning up discharges of oil from storage tanks.

The fund is supported by a 38-cent-per-barrel base fee on gasoline and a 19-cent base fee on all other petroleum products. When its balance drops below $5 million for more than a month, by state law the additional surcharges kick on.

That happened in 2005, and total import fees since have been 58 cents per barrel on gasoline and 29 cents per barrel on other petroleum products.

However, because DEP has kept the fund balance above $7 million for three consecutive months, the surcharge can now be turned off—and DEP financial analysts expect it to stay that way through 2013.

Melanie Loyzim, director of DEP’s Bureau of Remediation and Waste Management, says the fund balance is up even as the environmental agency is doing more clean-up work because of more stringent and comprehensive budgeting practices, lower bids from contractors and reduced operational and staff costs.

Remediating long-term spill sites so they can be returned to an economically beneficial use has been a priority under Governor Paul R. LePage and DEP Commissioner Patricia W. Aho. An all-time high total of 158 sites were cleaned up last year in addition to the hundreds of small spills the agency’s responders handle as part of their 24-7 emergency services.

Fewer tank leaks are also occurring, largely because of education by DEP to move toward newer tanks that are of higher quality and feature secondary containment.

“DEP has increased its commitment to cleaning-up these spill sites and our management of the costs associated with them,” said Loyzim. “As a result, we’re able to decrease the charges ultimately paid by the consumers of these fuels, while better protecting public and environmental health. The savings seen by the individual driver or homeowner may seem small, but they add up to a big difference to Maine’s economy.”

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

Additionally, a proposal from DEP to lower the per-barrel import surcharge on gasoline from 20 cents to 18 cents and on all other petroleum products from 10 cents to 6 cents was adopted by the FIRB.

The drop goes into effect when the surcharge is turned back on and brings revenue more in line with historic spending.

“The FIRB’s action today is truly a win-win for both taxpayers and the environment of Maine,” said FIRB member Leslie Anderson of Dead River Company. “Under the department’s new leadership, DEP has implemented a budget and provided efficient financial oversight to reduce cleanup costs and manage administrative expenses more effectively. Thus, today we are able to reduce fees without impacting site clean-ups.

“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.

She added that Maine residents and businesses can do their part to reduce the use of the Groundwater Fund by keeping their fuel oil tanks up to code and servicing them annually.

For more information about tank safety from DEP, visit www.maine.gov/dep/spills.

 

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