You asked if a $2 fee that appears on a constituent's propane gas delivery invoice as a “Reg. Fee” is a tax or a user fee.

The $2 fee is neither a tax nor a state-mandated user fee. Rather, it appears to be a fee the propane delivery vendor chooses to charge its customers in an effort to recoup the costs it believes are associated with complying with numerous federal regulations that apply to the propane gas industry.

According to vendor-provided information forwarded to us by the Office of Policy and Management's (OPM) Energy Division, the company, Star Gas Service, recently began charging its customers a $2 fee for each propane delivery. It identifies the charge as an “Environmental and Regulatory Fee.” The company states in its literature, “In recent years, governmental regulatory agencies such as EPA, OSHA, and DOT continue imposing mandatory regulations on the propane industry. Compliance with the many mandates carries a substantial financial burden. These additional costs impact our ability to provide the highest level of safety and service you and your family deserves. To partially recover a small portion of the added costs, we find it necessary to implement a $2.00 Environmental and Regulatory Fee for each delivery after January 10, 2000.”

The company then lists a number of U.S. Department of Transportation (USDOT), Occupational Safety and Health Administration (OSHA), and Environmental Protection Agency (EPA) regulations compliance with which it believes necessitates its $2 per delivery assessment. It cites USDOT regulations governing cylinder requalification requirements; cargo tank rules; employee training; driver licensing and qualifications; random drug and alcohol testing; driver hours of service limits; and vehicle inspection, repair, and maintenance requirements. It also cites OSHA regulations requiring employee emergency and fire prevention plans, process safety management, and personal protective equipment requirements. The EPA regulations it cites are requirements for a risk management program.

This $2 fee is not required or specifically authorized by any state or federal law. It is being charged on the company's initiative. State law requires propane dealers to register with OPM but no registration fee is charged (CGS § 16a-22d, -22h).

OPM and Department of Consumer Protection (DCP) staff expressed concern over how charges such as the one you described are shown on delivery invoices. The law requires retail dealers selling fuel oil or propane gas for residential heating to place the unit price, the total units sold, and any delivery surcharge in a conspicuous place on the delivery ticket given to the purchaser at the time of delivery. It prohibits a dealer from billing or otherwise attempting to collect from a purchaser any amount that exceeds the unit price multiplied by the number of units stated on the ticket, plus the amount of any delivery surcharge stated on the ticket (CGS § 16a-21). OPM staff is apparently concerned that the fee, at least in the way it is being described currently, may not conform to the statutory requirements.

Elisa Nahas of DCP's legal division told us that on a previous occasion, they required a propane dealer to change what he called a “compliance” charge he was making for similar reasons. They allowed the dealer to continue the charge, but felt that the way it was described was a deceptive trade practice since it implied that it was required and not discretionary with the company. She added that they were not aware of the restriction of CGS § 16a-21 until contacted by the OPM staff regarding this request.

Apparently, OPM and DCP staff will be meeting with the representatives of Star Gas Service within the next few weeks to address how it will identify this charge in the future, both with respect to DCP's concern over it being deceptive and OPM's concern that it conform to the statute regarding delivery surcharges being properly identified on invoices.

JF:ts