BUSINESS
11/05/2012 07:38 pm ET

Gas Station Generator Law Pits Irate Voters, Legislators Against Industry

With motorists in areas ravaged by Hurricane Sandy still struggling to find gasoline, lawmakers in New York and New Jersey have vowed to introduce legislation aimed at preventing shortages in future disasters. They are seeking to mandate that gas stations maintain on-site generators so they can pump fuel even during power outages.

The gas station industry is already threatening to fight back, complaining that it should not be required to secure its own power supply when other industries do not face similar mandates.

"You know what else is important to how we live? Making sure people have groceries," said Eric DeGesero, a lobbyist for the Fuel Merchants Association of New Jersey, a trade group that represents gas stations in the state. "So does the grocery industry have to have generators? If plywood is part of the critical infrastructure, then does the hardware industry need generators? How far do you take all that?"

The beginnings of a battle between state lawmakers responding to enraged voters and gas merchants resisting an extra business cost echoes a similar fight that broke out in Florida in 2005, following widespread gas shortages in the wake of Hurricane Wilma.

That storm, which inflicted $20 billion in damages in Florida, knocked out power to hundreds of gas stations and caused lines similar to those seen in parts of the Northeast this past week. Sunshine State lawmakers quickly responded to their angry constituents by calling for laws mandating that gas stations have their own generators.

''I'm in favor of mandating generators [at gas stations]," Florida state Senate Leader Alex Villalobos (R) told The Miami Herald on Dec. 4, 2005, "and I'm in favor of them paying for it out of their big, fat profits.''

Over the next three months, however, storm-recovery rhetoric collided with harsh political realities, and by early February a state Senate committee chaired by powerful Republican Sen. Alex Diaz de la Portilla announced draft legislation that bore little resemblance to the high-minded mandate for generators just a few months before.

The Florida Legislature eventually passed a law directing that certain gas stations along evacuation routes be equipped to switch to generator-based power, but not that they actually own generators. The law also requires owners of eight or more fuel pumps in any one county to have access to at least one generator.

The new law hewed closely to the goals of the Florida Petroleum Marketers and Convenience Store Association, the gas station lobby, whose president, Jim Smith, praised the legislation. "We're not opposed to being generator-ready," he said in February 2006. "We're opposed to the mandatory installation of generators."

A similar dynamic in the New York and New Jersey legislatures could eventually yield a similar result: no great change.

In New Jersey, two state legislators announced plans late last week for bills aimed, they said, at making sure gas stations are equipped with generators. State Sen. Barbara Buono (D-Metuchen) called for legislation via Facebook on Sunday, saying that "we need to ensure that our gas stations are equipped with generators to keep their pumps running during extended power outages."

In an interview with The Huffington Post, Buono said she supports the goal of generators at every gas station, and she's not afraid of a challenge from the gas station industry.

"The franchises where we're talking about requiring generators are the largest ones in the state, which are awarded major contracts from the state of New Jersey, and along major thoroughfares," she said. For smaller gas stations, Buono is considering an incentive program that would make it possible for them to purchase generators at reduced prices as part of a public-private bulk purchasing discount.

Buono said she hoped that strong public support for a generator mandate would help to balance the opposition of powerful industry interests during the crafting of a bill. "Hopefully, people's frames of reference are changing following the storm," she said, "so a bill in the public interest can get through [the Legislature] and get signed by the governor without the worst of the political back-and-forth."

In a worst-case scenario, however, Buono said she is prepared for a drawn-out battle with the gas station industry. "You bet I am," she laughed.

She may well get one. DeGesero, of the Fuel Merchants Association of New Jersey, suggested that gas stations and their lack of generators have emerged as scapegoats in the story of how and why so many motorists lack fuel.

"Let's pretend that we could go back a week and every gas station had a generator," DeGesero said. "The problem is that you've got three fuel sources -- refineries, the Colonial [oil] pipeline, and tanker ships -- all delivering to a network of terminals, which then get to gas stations ... Backup generation at all these points might have made a difference, but are you really going to mandate generators for all of them?"

On Saturday, DeGesero's association set up a Facebook page for the first time, which could serve the group well if there's a public relations component to its legislative plan.

New Jersey state Assemblywoman Amy Handlin (R-Monmouth), the deputy Republican leader, also reportedly plans to propose legislation requiring gas stations to have power generators, saying that "[s]uch a measure should be included in any bipartisan post Sandy legislative effort." Handlin did not respond to an email sent to her office on Sunday.

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