SD lawmakers OK grant rules for flex-fuel ethanol pumps in SD

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PIERRE — The Legislature’s review committee gave final approval Tuesday to the rules for South Dakota’s new grant program for ethanol blender pumps.

The program will provide up to $25,000 in assistance for the first pump installed at a fuel station and up to $10,000 for each additional pump.

There is $1 million earmarked annually for the grants in 2012 and 2013 and $500,000 annually for 2014 through 2016. The money previously flowed to ethanol production plants as a state government subsidy.

State energy policy director Hunter Roberts told legislators Tuesday the grant amounts are for 2012 and might change in subsequent years.

He said the pumps typically cost $25,000 to $30,000, and any accompanying changes in tanks and other infrastructure, if needed, at fuel stations could cost in the hundreds of thousands of dollars.

The 2012 grant limits were set with that in mind. “The goal of the program is to spend the money. The goal is to not spend it in one day,” Roberts said.

Sen. Jean Hunhoff, R-Yankton, voted for approving the rules but stressed that the program most directly benefits those taxpayers who use flex-fuel vehicles.

Nearly all fuel stations in South Dakota already offer 10 percent blends of ethanol-gasoline, but many don’t have flex-fuel pumps for vehicles that can use blends with more than 10 percent ethanol.

The grants program is the result of legislation passed during the 2011 session at the request of Gov. Dennis Daugaard. He reached agreement with ethanol industry’s representatives on a compromise that steered money away from ethanol subsidies through 2015.

The plan sends $2 million annually from ethanol subsidies into the state REDI fund for making low-interest business loans and puts money into the flex-pump grant program.

Ethanol production plants that were receiving a total $7 million annually in subsidies will see their support reduced to $4 million annually in 2012 and 2013 and $4.5 million annually in 2014 through 2016. The subsidies will go back to $7 million in 2017 and after.

Tags: news, updates, fuel, energy, flex, pumps, ethanol, state