S.D. retailers respond positively to blender pump grant program

By Kris Bevill | March 23, 2012

Just two months after launching its latest blender pump grant program, South Dakota Gov. Dennis Daugaard announced that the governor’s office of economic development (GOED) has already received applications for the entire $950,000 allotted to the first round of grants. The GOED began accepting applications on Jan. 9 and has so far awarded $755,000 to retailers in the state on a first-come, first-served basis. The remaining 20 percent of grants will be awarded on a competitive basis.

“We are off to a great start,” said Hunter Roberts, energy policy director at the GOED. “Funds have been allocated to 21 retail stations to install 44 ethanol blender pumps across the state, and four of those projects have been completed.”

One of the completed projects is located in Watertown, a city of about 20,000 people located in northeastern South Dakota. Dale Plunkett, owner of Tip Top Inc., said he applied for a grant on the first day the opportunity became available and was awarded $35,000 to offset the costs of installing two blender pumps at his station, a project which carried a total cost of about $500,000. He said the grant program was the deciding factor in choosing to install blender pumps and if it had not been available he would have opted to offer E10, regular unleaded and diesel instead. “Those pumps aren’t cheap, so small businesses need some help,” he said. The application process for blender pump grants was smooth, he said, and since bringing the blender pumps online in mid-January, he’s been pleased with the consumer response. “We’re in corn country, so we’ve got quite a few E85 vehicles around here,” Plunkett said. “But something that has surprised me is that my biggest sellers are E20 and E30 rather than E85 or even regular unleaded.” Now that he has blender pumps at his station, Plunkett said he will “definitely” offer E15 to his customers as soon as it’s available.

South Dakota is home to 15 ethanol plants, representing more than 1 billion gallons of annual production capacity. The South Dakota Ethanol Producers initiated the program and assisted in providing funding for the five-year, $3.5 million blender pump grant program by volunteering to redirect a portion of the Ethanol Producer Payments Program to the blender pump initiative. Ethanol producers believe that increasing the availability of ethanol blends in the state will benefit South Dakota’s economy and its ethanol industry. To date, there are approximately 100 blender pumps located throughout the state.

An additional $950,000 will be made available during the second round of this year’s funding, which will begin July 2. The program allows for $25,000 to be awarded for the installation of a station’s first blender pump. Grants up to $10,000 are available for the installation of each additional pump, according to the GOED.