Man links propane gauges to satellites

~ The key to success is convincing dealers that the system will increase profits.

A former Cape Girardean has chosen his hometown to launch an ambitious plan to bring the propane gas industry into the 21st century with satellite technology.

Rick Humphrey, chairman and CEO of NASCorp, believes he's offering a product that propane dealers will snap up to make monitoring customer gas use and routing deliveries more efficient.

The key component is a battery-powered box that continuously tracks the amount of gas in a tank along with outside temperatures in order to alert dealers when a customer needs a refill. The data is relayed to the dealer's computer through satellites, eliminating a radio link into the customer's home and telephone lines used by other monitoring systems.

The box can be installed on a tank in three minutes without any tools, Humphrey said. "We purposefully, willfully and deliberately made it simple."

Humphrey grew up in Cape Girardeau, where he moved as a child from Crystal City, Mo. After leaving in the early 1970s, he's worked for several energy companies, including a time building his propane firm into one of the nation's top 100 dealers.

He's a former chairman of the Missouri Propane Gas Association and was chairman of the Missouri Propane Education and Research Council during Gov. Mel Carnahan's administration.

More recently, he worked for America's Family Entertainment, a Nashville, Tenn.-based distributor of satellite television programming. The experience gained there began the discussions that led to NASCorp.

NASCorp's offices in Cape Girardeau on Mount Auburn Road will provide technical support, while an office in Branson, Mo., will be responsible for building the boxes.

To show his commitment to Cape Girardeau as a home for his company, Humphrey recently purchased a house near downtown.

Understanding the propane industry is key to understanding why dealers would want the boxes, Humphrey said. They are far more than just fancy tank gauges, he noted.

Most dealers own the tanks they fill for customers. Ideally, dealers want to fill the tanks when they are between 10 percent and 15 percent full because of the amount of time required for drivers to make each delivery. Tanks that run dry add extra expense for dealers to test the gas lines and topping off tanks that don't need refueling is time consuming.

"The average marketer that can increase their average deliveries by 25 gallons can decrease their delivery expenses by $45,000," he said.

Each of the monitoring units will sell for about $280, Humphrey said, but dealers will have the option of leasing them. They can recoup the cost, he said, by charging customers for access to their own data. And dealers can add value to the service by offering a range of options.

Thermostats, hot water heaters, carbon monoxide monitors can all be tied into the system via a radio antenna. The satellite signal can be used to alter settings on any switch linked to the system, Humphrey said.

And by monitoring propane use, the system can pinpoint problems. One customer in the Knoxville, Tenn., area for example, only used propane for a water heater, Humphrey said. When gas use increased dramatically, the customer was notified and found a water leak that was causing the heater to run continuously, he said.

Dealers won't put a monitor on every tank, Humphrey said. But most dealers have customers with tanks in remote locations, such as at generators powering transmitters or feeding burners that dry grain.

The key to success for NASCorp is convincing dealers that their system will increase profits. An article in the latest edition of LPGas, the industry magazine, indicates fairly strong resistance.

A survey showed that 69 percent of dealers don't use tank monitoring programs, and only 13 percent plan to install such systems. And 57 percent don't use truck-routing software and only 15 percent plan to do so.

The first places dealers will consider placing a system like the one NASCorp is developing will be in remote locations or places with high use, said Tom May, director of marketing for MFA Oil.

But convincing propane dealers they are making a good investment will be a difficult sales job, May said. "They have to have the infrastructure to support that kind of thing, the skills to support it and the customers that want it," he said.

Installing monitors for 1,000 customers without a sure way of recouping the cost, he said, "is a pretty hefty investment."

Steve Ahrens, president of the Missouri Propane Gas Association, said he sees the advantage in NASCorp's system. Humphrey's company faces competition from several companies with similar products but has the advantage of using satellite communications.

The hurdle, Ahrens said, is convincing the smaller dealers. "There are a lot of independents, mom and pop propane dealers. There isn't any way to say what the average company will do."

rkeller@semissourian.com

335-661, extension 126