The commission's study is the first comprehensive look at the hot-fuel controversy in the country. Currently, only Hawaii requires service stations to install automatic temperature compensation devices on pumps, while Canadian retailers voluntarily use the equipment to make sure they don't provide extra energy to customers when the fuel contracts in the 90% of the country that has long and frigid winters.
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No benefit to motorists in a 'hot fuel' fix, state panel says
California Energy Commission says the costs of compensating for gasoline temperature would outweigh the gains in fuel volume.
For The Record
Los Angeles Times Friday, March 13, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 32 words Type of Material: Correction
Gas station pumps: A story in Business on Thursday about a California Energy Commission report on the so-called hot-fuel phenomenon said the panel's chairwoman was Linda Douglas. Her name is Karen Douglas.
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Allowing purchasers to get a temperature-adjusted gallon of fuel could bring them a financial windfall, at least in theory, commission staff reported. The extra gasoline and diesel could be worth an estimated $437 million a year, Project Manager Gordon Schremp said.
But motorists are unlikely to pocket the money because nearly all retailers would be expected to protect their profit by raising prices, he cautioned. Others dispute that contention.
Nevertheless, installing the temperature compensation devices could create a small benefit to motorists, about $258,000 a year, by creating more price transparency that would allow consumers to better compare prices among competing retailers, Schremp said. That would be more than offset by up to $127 million to upgrade pumps as well as continuing maintenance costs.
"The cost-benefit analysis concludes that the results are negative or a net cost to society under all the options examined," Schremp's report said. Consumers might pay less than a quarter of a cent more per gallon if the costs of the pump retrofits are passed through by retailers. Any action to require new pumps would fall to the Legislature and Schwarzenegger.
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marc.lifsher@latimes.com
