Two companies that distribute liquefied petroleum gas have filed suit challenging the Utah attorney general's opinion that a state safety regulation has an anti-competitive effect on Utah's propane market.
The suit, filed by Suburban Propane and Petrolane Gas Service, both of Whippany, N.J., names Attorney General Paul Van Dam and state Public Safety Commissioner Doug Bodrero.Van Dam contended that allowing only propane-tank owners or their designees to fill propane tanks violates antitrust laws.
In his March opinion, the attorney general said that since as many as 85 percent of Utah residential propane tanks are leased from companies which also sell propane, the rule ends up prohibiting most homeowners from shopping for the best-priced propane.
The two companies, owned by Quantam Chemical Corp., New York, N.Y., seek a declaratory judgment from U.S. District Judge Thomas Greene that Van Dam incorrectly interpreted federal and state antitrust laws and that the state rule is a permissible safety regulation immune from antitrust challenge.
Because of Van Dam's opinion, the state Liquefied Petroleum Gas Board, which Bodrero oversees, earlier this month decided not to enforce the rule, adopted in 1987 from National Fire Protection Association standards.
In a letter this month to the National Fire Protection Association, Van Dam said, "A preliminary analysis of propane prices before and after the issuance of our opinion suggests that Utahns have been paying literally millions of dollars a year more for propane" because of the rule.
Industry officials contend a company with a financial investment in a propane tank is more inclined to take safety precautions in filling it than someone just selling the fuel.
Van Dam said states such as Utah, which test and license propane technicians, can assure that only qualified persons fill tanks.