State gas storage fund deficit forces owners to pay more

Ooltewah service station owner Steve Ray says the annual bill from the state Division of Underground Storage Tanks will be much higher.

He said he typically pays about $375 to maintain his three underground petroleum storage tanks, but this year he’ll be forced to pay $1,575.

“It seems like every time the state messes up, we have to pay for it,” Ray said. “I’m almost afraid to go to the mailbox these days and see what new fee I have to pay.”

Fund administrators say the fund receives money from a four-tenths of a cent gas tax and annual maintenance fees from each tank owner, but recent expenditures exceeded revenues.

“People are waiting for an average of 9 months before they got reimbursements,” assistant fund director Donna Washburn said. “We have to wait for the money to come in before we can pay, and that money just hasn’t been there.”

Administrators estimate the deficit will be $20.6 million next fiscal year and $120 million by 2012.

“It’s to the point that we have to do something about it now,” Washburn said. “If we don’t, its going to be much harder to restore it to financial solvency.”

Gov. Phil Bredesen agreed to allocate $10 million to the fund from the state budget next fiscal year to help pay down the debt, and the state Legislature created a special fee for tank owners to match the contribution.

Stations that have fewer than five tanks will now pay $625 per tank, while larger companies will pay $710 a tank.

For Mapco Express Inc., the largest tank owner in the state, the extra cost of their 581 tanks is $412,510.

When the fund was first created, the assumption was that the number of spills would decrease drastically because of improving technology.

The number of spills has decreased, but it’s not low enough, said Karen Stachowski, executive director of the state’s environment department.

“We thought that eventually it would go to zero,” she said. “That has not happened.”

The number of claims for reimbursement after spill cleanups is higher than anticipated, and the fund paid $17.4 million last year, records show.

Emily LeRoy of the Tennessee Oil Marketing Association said the extra fee would be tough, but that the industry recognizes the environmental importance of the fund.

“Obviously nobody wants to pay this fee when it might be a company’s total profit for the year,” she said. “We just feel that it’s something that has to be done because the choice is losing state environmental protection.”

Oil industry representatives said the fee will likely lead to higher gas prices for consumers.

“This is not a cost that I’m prepared to eat out of my personal profit,” Ray said. “I’m going to raise gas prices a penny or whatever it takes to pay it off. This will come down on the consumers, too.”

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On the Net:

Tennessee Department of Environment and Conservation, http://www.state.tn.us/conservation

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Information from: Chattanooga Times Free Press, http://www.timesfreepress.com