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NASHVILLE, Tenn. — The Tennessee Fuel and Convenience Store Association (TFCA) announced two legislative victories in two different areas: compressed natural gas (CNG) and tobacco.
Regarding CNG, the Tennessee Regulatory Authority turned down Piedmont Natural Gas Co.’s request for permission to raise heating rates to pay for the installation of CNG fuel facilities. TFCA had launched a full campaign to challenge Piedmont’s request.
“It was important that we prevented a regulated monopoly from gaining an unfair pricing advantage over our retail members,” said TFCA Executive Director Emily LeRoy. “If Piedmont had been allowed to use ratepayer dollars to cross-subsidize a business that competes in the open market, then a precedent would have been set for utilities across the state.”
The state of Tennessee is required by law to convert 25 percent of its fleet to alternative fuel vehicles. “If regulated utilities want to expand into the retail fuel business, they should accept risk and operate like any other competitor,” added TFCA President Bobby Page, also vice president and chief operating officer of Highland Corp./Fast Stop Markets.
The association also partnered with health care advocacy groups to win an increase in the minimum cigarette markup. The Tennessee General Assembly voted in April to increase the minimum markup for cigarettes from 8 percent to 15 percent over the next 24 months.
“Tennessee has historically supported a cigarette minimum markup law to prohibit retailers from using cigarettes as a loss leader and to discourage consumption of cigarettes, especially by children,” LeRoy noted. “C-stores and health care organizations shared a common interest on this legislation and worked together to increase the minimum markup.”
LeRoy said an important part of the campaign was explaining to legislators that tobacco companies require local retailers to sell tobacco products at or near the state minimum. With two out-of-state tobacco companies controlling 85 percent of market share for cigarettes in Tennessee, the result was that a monopolistic industry was setting cigarette prices at the expense of local retailers, according to the executive director.