CM Deck Nov 2016(web)

PROPANE EDUCATION & RESEARCH COUNCILNAPLES, FLORIDA

November 2 – 3, 2016

CHAIRMAN’S REPORT

Tom Van Buren

ADVISORY COMMITTEE REPORT

Bruce Montroy

AUDIT COMMITTEE REPORT

Randy Doyle

STRATEGY TASK FORCE

Drew Combs

PERC STRATEGY WORKSHOP RESULTS

• Refresh Aspiration Statement

• Define Strategic Initiative Success

• Prioritize Strategies

• Establish Strategy emphasis

• Next Steps• Align Tactics with Strategic Priorities

through Strategic Emphasis

Aspiration

Initiative Initiative

StrategyStrategy

Initiative

Priorities

Tactic

TacticTactic

REFRESHING PERC’S ASPIRATION

Current:

To expand and grow the safe, efficient use of odorized propane gas as a preferred energy source through consumer education, training, technology development and the commercialization of new products.

Proposed:

Provide tools, resources and brand stewardship that support the propane industry's efforts to expand and grow the safe, efficient use of propane through consumer education, training, technology development, and the commercialization of new products.

Emphasis shifted to highlight PERC’s primary responsibility as an enabler.

Aspiration

StrategicInitiatives

STRATEGIC INITIATIVES TO ACHIEVE THE ASPIRATION

Consumer Awareness

Provide tools, resources and brand stewardship that support the propane

industry's efforts to expand and grow the safe, efficient use of propane through

consumer education, training, technology development and the

commercialization of new products.

Product DevelopmentSafety & Training

Industry Engagement

PERC has defined 4 Strategic Initiatives to achieve the Aspiration

This Task Force used these broad initiatives as a given.

Parking lot: PERC Staff may need to revisit the Initiatives to validate.

Top Strategies

RECOMMENDED OVERALL STRATEGY PRIORITIES 2017-2019

Middle Strategies

Lower Strategies

Cause Marketing

Paid Media

Research (CA tracking)

Owned Media Earned Media

Direct Marketing

State Associations

National Associations

CompaniesIndustry Workforce

Training

External AudienceTraining

Safety Messages

Residential/Commercial

AutogasAgricultureOutdoor Power

Equipment

Material Handling

Technical/Operational Innovation

Industry Engagement

Safety & Training

Product Development

Consumer Awareness

EMPHASIS FILTER BY STRATEGYCONSUMER AWARENESS

StrategiesCampaign/CA

ResearchPaid Media Owned Media

Emphasis

Nielsen Campaign Tracking

VOC research

Digital Websites/ Microsites/

Landing pages

Social Media

Cause Marketing

Adopt a classroom

Use only to support major

marketing initiative

Earned Media

Press Releases from success

stories

Heritage of propane history

Only for specific

coordinated marketing projects

Direct Marketing

Middle

EMPHASIS FILTER BY STRATEGYPRODUCT DEVELOPMENT

Strategies

Emphasis

Lawn & Landscape

Dealer Outreach

Top 3 OEM Golf Equipment

Affordability of Equipment

Ag AutogasTech Op

Research

Work with co-ops/extension

agents

School Bus

Irrigation

Propane Industry Fleets

Align with TS&S to identify

industry needs

Regulation response

Emissions quantification

Structure Heat

Emissions Research

Marketing Collateral

Fuel Quality

Mobile Refueling Infrastructure

code & development

Res/Com Material Handling

Consumer Campaign (+HVAC,

Plumbers, etc.)

Rebates for appliances

(direct or state)

Product Development &

commercialization

Dealer & Distributor outreach

Affordable GHP or similar

application

Emission & Economics research

Middle

OEM Engine Development

EMPHASIS FILTER BY STRATEGYSAFETY & TRAINING

StrategiesExternal Audience Training

Emphasis

First responders

Construction Pros (HVAC,

Plumbers, etc)

Dispenser Operators

Engine Mechanics

Safety Messages

Industry Workforce Training

Safety Videos

Anti-DIY

Safe Grilling

CETP online/blended

learning

“Safety Talk” Resources for

marketers

Propane Industry

Recruitment

Middle

Compliance Reviews for

new products

EMPHASIS FILTER BY STRATEGYINDUSTRY ENGAGEMENT

StrategiesNational

AssociationsCompanies

Emphasis

Curating Online content

Align with states to be frontline with marketers

Utilizing AC & Council volunteers (to represent PERC) during industry

conferences

Create relationships for bilateral

information sharing

State Associations

Staff and Member Leadership Outreach

Conference/Annual Meeting support

Align PWS with National campaign

Middle

Marketer Surveys

NEXT STEPS

• Create a brief narrative for industry to digest

• PERC Staff and Task Force to filter tactics against priorities

• Staff to re-organize existing Plan

• PERC to publish new Long Range Plan

• All above completed by April Council Meeting

INDUSTRY OUTREACH COMMITTEE

Bob Barry

CHAIRMAN’S COMMENTS

VICE-CHAIRMAN’S REPORT – MARKETERS

Drew Combs

NPGA REPORT

Rick Roldan, President & CEO, NPGA

VICE-CHAIRMAN’S REPORT – PRODUCERS

Bruce Leonard

GPA REPORT

Mark Sutton, Executive Director, GPA

TREASURER’S REPORT

Rob Chalmers

SURPLUS VARIANCE HIGHLIGHTS2016 FORECAST TO BUDGET ($ IN MILLONS)

Category Forecast Budget Variance

Beginning Surplus $7.6 $10.4 ($2.8)

Program Funding ($31.8) ($35.7) $3.9

Rebates ($7.1) ($7.2) $0.1

Forecasted Ending Surplus $2.6

Assessments $35.6 $36.3 ($0.8)

Deobligations $1.1 $0.8 $0.3

Total Variance from Highlights $0.8

Other Budget Components $0.2

Forecasted Added Surplus $1.0

2016 Budget Surplus $1.6

PERC INVESTMENT ALLOCATION AS OF AUGUST 31, 2016 (IN MILLIONS)

Deposits, $4.0, 17%

CD, $16.1, 67%

MB, $3.8, 16%

TOTAL: $23.9 M

Cash & Money Market(Deposits)

Cert.of Deposits (CD)

Municipal Bond (MB)

PERC TWELVE MONTH CUMULATIVE INVESTMENT RETURNS AT AUGUST 31, 2016

1.03% 1.06%Return %

Investment

Actual Returns CPI

(0.03%)

CHIEF EXECUTIVE OFFICER’S REPORT

Roy Willis

2017 PARTNERSHIP AGREEMENT

Docket 21039

DOCKET 21039 – PARTNERSHIP AGREEMENT

Research & Technology, $744,500 , 54%

Coordination with Qualified Industry Organizations,

$50,000 , 4%

Industry Conferences & Conventions, $115,000 , 8%

Employee Safety & Training,

$60,000 , 4%

Codes & Standards Collaboration,

$150,000 , 11%

CETP Outreach, $75,000 , 5%

Agency Outreach, Industry & Public Affairs,

$200,000 , 14%

Total: $1,394,500

INDUSTRY PROGRAMS ($4,770,500)

DOCKET BUDGETED REQUESTED TOTAL REMAINING

2017 Partnership

Agreement$1,394,500 $1,394,500 $3,376,000

2017 Industry Outreach $340,000 $340,000 $3,036,000

2017 Corporate

Communications$610,000* $610,000 $2,426,000

2017 MTST $700,000 $700,000 $1,726,000

2017 Partnership with

States$1,500,000 $1,500,000 $226,000

* Additional $400,000 Program Support

Initiatives, $75,000 Safety & Training

CHIEF BUSINESS DEVELOPMENT OFFICER’S REPORTTucker Perkins

2016 MARKET OUTREACH RECAP

PULL THE PLUG ON ELECTRIC WATER HEATERS CAMPAIGN

• Through September 30, 2016:

• 63,379 users visited

KnowYourWaterHeater.com.

• 10,974 users completed the five question

• 2,923 fact sheets have been downloaded

• Over 5.5 million impressions from ads

• Compared with September 2015, water

heating pageviews increased by over

3900 percent and users increased their

average time on the page by 40 percent

OVERVIEW OF PROPANE DISTRIBUTION SYSTEMS

• Course completed in first

quarter of 2016

• Includes printed course, five

videos, and instructor materials

• Metrics to date:

• 1,753 total visits to page

• 226 course downloads

• 100 video views

RESIDENTIAL OPPORTUNITY INSIGHTS

• Launched in April 2016 at the

NPGA Southeastern Conference

• Metrics to date (April to present):

• 517 registered users

• 8,500 visits to website

• 1,320 reports downloaded

• 677 templates downloaded

NEW RESOURCES

Code & Above Code

Course, Infographic,

Fact Sheet

Commercial Generator Course

E-BooksUpdated Virtual Home

Generator BrochuresVideos

Updated Product Directory

Energy Calculators

US FORKLIFT SHIPMENTS

1990 1995 2000 2005 2010 2015

PROPANE INTERNALCOMBUSTIONENGINE(Classes 4 & 5)

ELECTRIC RIDER(Classes 1 & 2)

BACK TO SCHOOL CAMPAIGN METRICS

• Total Campaign – 90 million impressions

• Notable coverage:

• All news affiliates in San Antonio - KSAT, News 4 NBC, KENS 5, KABB, and Univision 41. Print included: San Antonio Express-News and the San Antonio Business Journal

• Yahoo! News, MarketWatch, Parade Magazine, Coffee with America (nationally syndicated).

• 30+ Business Journals across the country

• 3 million social media impressions

• 285 TV/radio placements in more than 30 markets across the U.S.

• Notable markets: Dallas/Fort Worth, Washington D.C., Atlanta, Tampa, Portland, Indianapolis, San Diego, and Columbus (Ohio)

• No paid media support

2017 BUDGET

Jim Harris, CFO

2017 BUDGET ($ IN THOUSANDS)

Category Updated Budget July Budget Variance

Funds From

Beginning Surplus$2,631 $1,747 $848

NPGA/GPA

Partnership$1,394 $1,319 $75

Additional Uses of Funds

Medium Duty Engine

Development$1,500 $1,000 $500

Engine Emissions

Research$615 $200 $415

2017 BUDGET CONSIDERATIONS

• Four (4) public comments from industry.

• Budget approval : authorizes the administrative budget, the program labor plan, assessment collection costs, IT program support cost and capital projects.

• Budget approval directs staff to move forward with the proposed Program Plan initiatives.

• All project and program activities are subject to the docket approval process. (Council approval, consent calendar, presidential approval.)

CONSENT CALENDAR

CHIEF MARKETING OFFICER’S REPORT

Dennis D. Vegas

CONSUMERBRAND CAMPAIGN

REINVENTING OUR BRAND 2016 AND BEYOND

AGENDA

• Introductions

• Campaign

• Results Reporting & Findings

• 2017 Marketing Plan

MARKETING MISSION

Provide tools, resources, and brand stewardshipthat support the propane industry's efforts to expandand grow the safe, efficient use of propane throughindustry collaboration and consumer education.

NIELSEN BRAND STUDY (FEB 2016)

Propane Users Propane Non-Users

Familiarity

Favorability

BRAND PROMISE

Brand Vision

Delivering the energy you need when and where you need it

Brand Positioning

To those who are proud of how they live, Propane is the energy source that fuels their independent way of life

Brand Personality

A confident, surprisingly modern partner who always has your back

Brand Affiliation

Proudly Propane

GOALS AND STRATEGY

INCREASE

FAVORABILITY & FAMILIARITY

INSPIRE

ENGAGEMENT

CHANGE

PERCEPTIONS

CAMPAIGN GOALS

DRIVE AWARENESS OF THE

BRAND MESSAGE

Accomplish mass reach

through air cover

TV, high-impact, print, radio

COMMUNICATIONS STRATEGY

EDUCATIONAL

CONTENT

Content showing modern

applications of propane and

appliances

Paid search, microsite

MULTI-CHANNEL STORYTELLING

Create deeper funnel

engagements

Digital video, microsite,

retargeting, social

2016 CAMPAIGN JOURNEY

Paid Social and Search (Oct)

Results Report (Oct)

Consumer Launch (Jul)

Industry Introduction (Apr)

Focus Groups (Mar)

Benchmark Study (Feb)

Brand and Position (Jan)

Agency Selection (Dec)

Task Force Mandates (Sept)

CONSUMER EDUCATION BUDGET

$26.6 million

million

2016 MEDIA INVESTMENTS

60%22%

Digital

Media Total

$7 Million

(Campaign Total $9.65 Million)

2016 CONSUMER CHANNELS

Source: Summer 2015 Simmons Connect (Adults 35-64 with a household income less than $100k who own a home)

ADULTS

SOCIAL/DIGITAL

CINEMA

2016 INDUSTRY OUTREACH

MARKETERS

SOCIAL AND

DIGITAL

ONE-ON-ONE

OUTREACH

PUBLICATIONS

ONLINE CATALOG

MILESTONES ACCOMPLISHMENTED AS PROMISED

• Researched and tested all concepts

• Launched coast to coast campaign

• Deployed an effective multichannel media approach

• Campaign work is memorable and well liked

• Established metrics and tracked performance

• Garnered industry and state engagement

• Improved customer insights and benchmarks

• On time and on budget

• Favorability is up 13 points among people who saw the ads

• Familiarity among non-users who saw the ads is up 16 points

• Propane users who saw ads are 13 points more likely to purchase propane appliances

PROPANE BRAND TRACKING STUDYCONSUMER REPORT – WAVE 2

October 2016

BACKGROUND AND OBJECTIVES

• The primary objective of this study (Wave 2) is to assess the impact of the national advertising campaign on perceptions of propane across the country.

• The findings of Wave 2 are compared against the findings from the Baseline (Wave 1) study conducted prior to the launch of the campaign.

• 20-minute online surveys• Wave 1: December 18th, 2015 to January 19th, 2016 • Wave 2: September 9th to 29th, 2016

• Included in Wave 2 survey are before (prior to seeing the ad during the survey) and after (after seeing the ad during the survey) measures.

METHODOLOGY

3,001 (Wave 1)

2,054 (Wave

2) InterviewsWith Homeowners

Respondents were selected basedon the following:

• Ages 18+• Involved in energy decisions• Resides in qualifying zip code• Does not live on a natural gas line• Homeowner• Does not work for an energy supplier

Results have been weighted to be representative of key population demographics.

INTERVIEWS PER PADD SCREENING CRITERIA

RegionSample Size

Wave 1Sample Size

Wave 2

PADD 1 849 613

PADD 2 1,201 802

PADD 3 448 308

PADD 4 162 98

PADD 5 341 233

PADD Region

Distribution

INTERVIEWS OF USERS VS. NON-USERS

RegionSample Size

Wave 1Sample Size

Wave 2

PROPANE USERS 1,758 (59%) 1,220 (58%)

NON-USERS 1,243 (41%) 834 (42%)

Propane users are those who use propane for any of the following appliances/applications:• Furnace or heat• Cooktop or range or oven• Traditional water heater• Tankless water heater• Fireplace• Clothes dryer

• Perceptions of propane have improved since Wave 1; exposure to the ads increased favorability

• Favorability is up 5 pts overall from Wave 1 (+5 propane users; +4 non-users)

• After being shown the ads, favorability increases 9 pts (+5 propane users; +16 non-users)

• Among the 22% who recall seeing the ads on TV, perceptions are up significantly from Wave 1

• Familiarity among non-users is up 16 pts from Wave 1

• Favorability is up 13 pts from Wave 1 (+17 propane users; +9 non-users)

• Propane users are more likely to trust propane, advocate for propane, and purchase a propane appliance

• Key attributes communicated in the ads, including Made in America and availability, are up roughly 10 pts among propane users and non-users

SUMMARY OBSERVATIONS

ADVERTISING RECALL

BASE: ALL QUALIFIED RESPONDENTS (n=2054)Q34A. Have you , read, or heard any advertisements for propane or propane appliances and products over the past 12 months?BASE RECALL SEEING AD (n=486)Q37C. Where do you recall seeing, reading or hearing propane advertising?

ONE IN FOUR RECALL SEEING A PROPANE AD, WITH TELEVISION BEING THE MOST COMMON MEDIA CHANNEL

Not sure

RECALL SEEING A PROPANE ADVERTISEMENT WHERE AD WAS

Television advertising

Direct mail (such as flyers, brochures)

Print advertising

Newspaper inserts

Radio advertising

Online advertising

Social networking sites (such as Facebook, Google+, LinkedIn, Twitter)

Mentions or discussions in online blogs or discussion boards

Preview in a movie theater

3% 5% 8%4% 4%

Yes, many times Yes, a few times Yes, once or twice

3% 5% 8%4% 5% 7%

2% 5%9%

Yes, many times Yes, a few times Yes, once or twice

Yes (Net)Total 16%User 16%

Non-User 17%

Living Free

Yes (Net)Total 16%User 16%

Non-User 17%

Windows

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q34B/C. Have you seen this ad on television, online, or in the movie theater in the past 12 months?

22% REPORTED SEEING ONE OR BOTH ADS DURING THE CAMPAIGN

■ Total ■ Propane User ■ Non-Propane User

Net RecallTotal 22%User 21%

Non-User 24%

AFTER VIEWING THE ADS WITHIN THE SURVEY, RESPONDENTS SAY THEY STOOD OUT AND NON-USERS SAY THEY PROVIDED NEW INFORMATION ABOUT PROPANE

OUTCOMES OF ADVERTISEMENTS

The ads stood out as different from other energy advertising

I would enjoy seeing the ads again

They told me something new about propane

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)Q42. Thinking about the advertisements that you just viewed, please indicate how the advertisements made you feel.

Total Propane Users Non-Users

FAMILIARITY & FAVORABILITY

TOTAL PROPANE USERS NON-USERS

Electricity

Propane

Natural gas

Heating oil

FAMILIARITY WITH ENERGY SOURCES

FAMILIARITY AMONG ALL ENERGY SOURCES IS UP SLIGHTLY SINCE THE FIRST WAVE

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)Q1. When thinking about energy within your home, what types of energy sources come to mind for major appliances such as cooking appliances or heating equipment?Q2. How familiar are you with the following energy sources for major home appliances such as heating, cooking or water heating?

■ Top of Mind Awareness ■ Aided Familiarity (Top 2 Box)

Change from Wave 1

ALL RESPONDENTS

Change from Wave 1

FAMILIARITY WITH PROPANE

Recall Advertising

Propane Users

Non-Users

Does Not Recall Advertising

FAMILIARITY WITH PROPANE IS UP AMONG THOSE WHO SAW THE ADS

BASE: RECALL ADVERTISING (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171); DOES NOT RECALL (n=1627)Q1. When thinking about energy within your home, what types of energy sources come to mind for major appliances such as cooking appliances or heating equipment?Q2. How familiar are you with the following energy sources for major home appliances such as heating, cooking or water heating?

■ Top of Mind Awareness

■ Aided Familiarity (Top 2 Box)

Change from Wave 1

+12+16

Electricity

Propane

Natural gas

Heating oil

FAVORABILITY WITH ENERGY SOURCES(Top 2 Box)

PROPANE’S FAVORABILITY INCREASED MORE THAN OTHER ENERGY SOURCES

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)Q6. Now indicate how favorable you are towards the following energy sources.

Change from Wave 1

Change fromWave 1

Change from Wave 1

ALL RESPONDENTS

Favorable (6/7)

TOTAL PROPANE USERS NON-USERS Change from Wave 1

FAVORABILITY IS MUCH HIGHER AMONG THOSE WHO RECALL SEEING ONE ORBOTH ADS

FAVORABILITY OF PROPANE(Top 2 Box)

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q6. Now indicate how favorable you are towards the following energy sources. Use the scale from 1 to 7 where “1” means that you have extremely

bad or negative feelings toward the energy source and “7” means that you have extremely positive or good feelings toward the source.

53% 69% 30%

81%35%

61%RECALL

ADVERTISING

ALLRESPONDENTS

Change from Wave 1

WAVE 2 - BEFORE SEEING THE ADS

Favorable (6/7)

Wave 1

Wave 2 – Before

Wave 2 – After

AFTER VIEWING THE ADS IN THE WAVE 2 SURVEY, NON-USERS SAW THE HIGHEST INCREASE IN FAVORABILITY

CHANGE IN FAVORABILITY OF PROPANE(Top 2 Box)

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q6. Now indicate how favorable you are towards the following energy sources. Q40. Please indicate how favorable you now feel towards propane as an energy source.

Wave 2 – Before

Wave 2 - After

70% +18

ALLRESPONDENTS

83% +2+9

RECALL ADVERTISING

Favorable (6/7)

KEY CAMPAIGN ATTRIBUTES

PROPANE PERCEPTIONS(Top 2 Box)

Allows me to live where I want and how I want

Made in America

Runs all appliances effectivelyand efficiently

Allows me to choose and usethe appliances I want most

THOSE WHO SAW THE TV ADS ARE MUCH MORE LIKELY TO ASSOCIATE KEY CAMPAIGN MESSAGES WITH PROPANE

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q28. To what extent do you agree or disagree with the following statements as they apply to propane.

■ All Respondents■ Recall Advertising

Agree (6/7)

Reliable

Available for useanywhere I live

American Made

PROPANE ATTRIBUTES(Top 2 Box)

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q29 How well would you say each of the following describes propane?

THOSE WHO SAW THE TV ADS ARE MUCH MORE LIKELY TO RECOGNIZE KEY ATTRIBUTES HIGHLIGHTED IN THE CAMPAIGN

Describes (6/7)

KEY CAMPAIGN OUTCOMES

Trust propane to efficiently powerappliances within your home

Speak positively about propane to others

Recommend propane to yourfamily and friends

Purchase an appliance thatrequires propane

PROPANE ACTIONS (BEFORE SEEING THE ADS)(Top 2 Box)

PROPANE USERS WHO SAW THE ADS ARE MUCH MORE LIKELY TO ENGAGE WITH AND ADVOCATE FOR PROPANE

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q10a. Thinking about propane as an energy source, how likely are you to do each of the following?

Agree (6/7)

Speak positively about propaneto others

Recommend propane to your familyand friends

Purchase an appliance that requires propane

AMONG ALL RESPONDENTS, SEEING THE ADS INCREASED THEIR LIKELIHOOD TO EMBRACE PROPANE

PROPANE ACTIONS – BEFORE/AFTER CHANGE(Top 2 Box)

BASE: ALL RESPONDENTS (n=2054); PROPANE USERS (n=1220); NON-PROPANE USERS (n=834)Q10a. Thinking about propane as an energy source, how likely are you to do each of the following?

■ Before ■ After

ALL RESPONDENTS

Before / AfterChange

Before / After Change

Likely (6/7)

Speak positively about propaneto others

Recommend propane to your familyand friends

Purchase an appliance that requires propane

AMONG THOSE WHO RECALL SEEING THE ADS, SEEING THE ADS AGAIN INCREASED THEIR LIKELIHOOD TO EMBRACE PROPANE

PROPANE ACTIONS – BEFORE/AFTER CHANGE(Top 2 Box)

BASE: AIDED AD RECALL TOTAL (n=427); PROPANE USERS (n=256); NON-PROPANE USERS (n=171)Q10a. Thinking about propane as an energy source, how likely are you to do each of the following?

■ Before ■ After

AIDED ADVERTISING RECALL

Likely (6/7)

CONCLUSION

• The campaign generated more favorable perceptions of propane among those who recall seeing the ad on their own and within the survey.

• Those who recall seeing the ads on their own are much more likely to associate propane with key attributes promoted in the campaign and are also more likely to embrace and advocate for propane.

• The longer the campaign is off the air, the likelihood increases that some of the improvements will recede.

• Given the results, the impact of the next ad buy will largely hinge upon the size and scale of the buy. As the campaign is improving perceptions of propane, a larger buy will have a greater influence.

MEDIA CHANNELS USED

THE 2016 MEDIA PLAN

CREATIVE – TV/CINEMA

Window :30 Livin’ Free :30

CREATIVE – DIGITAL

Dog House :20 Good Boy :30

Pool :16

Running :23

Pre-Roll Digital Videos

CREATIVE – DIGITAL AD UNIT

Viant/Scripps

CREATIVE – DIGITAL NATIVE ADS

Nativo

CREATIVE – DIGITAL HIGH-IMPACT

Undertone

CREATIVE – PRINT

CREATIVE – ADDED VALUE EXAMPLES

Great American Country RFD TV

CREATIVE – ADDED VALUE EXAMPLES

Country Music Television Animal Planet

HOW MEDIA CAMPAIGN WAS MEASURED

CAMPAIGN MEASUREMENT

Video KPIs High Impact & Native KPIs Social KPIs

• Completion

• Cost per view

• Time spent

• Engagement rate

• Video completion

• Click through rate

• Cost per click

• View rate

• Engagement rate

• CPM

• Cost per engagement

• The Gold standard for overall effectiveness of the brand campaign

• Measuring specifically brand familiarity and favorability improvements

• Measure effectiveness of our media in impacting favorability on those exposed to the media

• To determine which ad types and / or creative executions are most impactful

• Gain insight to inform media planning, creative, and budget for future campaigns

• Using third party ad tracking (Sizmek) and microsite statistics, the video, high-impact, native and

social channels will be measured against the specific KPI’s below. These are the fundamental

KPI’s to help us understand the ground level performance of our various digital tactics

CAMPAIGN MEASUREMENT TOOLS

Digital Campaign Measurement

• Perceptions of propane have improved

• Exposure to the ads increased favorability

• Among those who recall seeing the ads on TV, perceptions

improved significantly

NIELSEN – KEY SUMMARY

COMSCORE AD EFFECTIVENESS STUDY

• Designed to gain insights about which media, channels, and message types produced the most impact

• Rather than surveying only the core target segment, comScore’s sampling follows the media and surveys based on exposure to the messaging

• Meant to supplement, not replace, the Nielsen study and provide deeper media insights

KEY LEARNINGS FOR 2017 PLANNING

• Maintain Radio and Print exposure in upcoming campaigns to drive key awareness/familiarity metrics among target audiences

• Most significant lifts in brand attributes result when audience is exposed to a combination of media

• Television is the strongest driver of ad recall

• Use High-Impact and Pre-Roll partners to improve attitudes toward propane, affect intent to switch, and increase brand trust

• Optimize creative by channel and experiment with alternative digital messaging

KEY RESULTS

THE DIGITAL CAMPAIGN

DIGITAL RESULTS IN 90 DAYS

July 1 – October 2, 2016

293,600

Total visits to

ProudlyPropane.com

110,643,724

Total digital

impressions

45,269,971

Online video

52,032

Social engagements

on Facebook

SOME KEY DIGITAL HIGHLIGHTS

• Overall traffic to propane.com increased by 79%

• Direct traffic to propane.com increased by 297%

• Percentage of new users to propane.com increased by 86%

• 72,000 entries to the Generator Facebook sweepstakes (33,000 unique entries)

• 73% Video Completion Rate on all paid (+ 3 points vs. advertising industry benchmark)

Compared with same period 2015 (July - October)

A SUMMARY OF THE KEY FINDINGS JUNE THROUGH

SEPTEMBER

SOCIAL LISTENING

SOCIAL LISTENING APPROACH

PERC and Proudly Propane

• All mentions of Proudly Propane and PERC

Specific applications

• Residential, agricultural, autogas, etc.

Propane overall conversation

Competitive conversation

• Natural gas, heating oil, and electric

MARKETERS LEVERAGE AND SUPPORT CAMPAIGN

Conversation volume up by 29% and positive sentiment up by 387% year-over-year

Campaign-related posts on PERC Facebook page had 40% higher engagement than posts with non-campaign content

REACHING THE RIGHT SOCIAL AUDIENCE

Facebook retargeting strategy helped engage passionate propane users

Proudly Propane content such as the generator giveaway performs better than benchmark because it resonates with this audience

EXPAND ROLE OF INFLUENCERS IN SOCIAL

There are valued thought leaders with top-performing content that can be leveraged further with paid support. As an example:

• Their content was top-performing among other posts and can be pushed out to consumer audiences

EXPAND ROLE OF INFLUENCERS IN SOCIAL

Opportunity for ongoing dialog with a smaller network of handles mentioning @PropaneCouncil

Elevate propane advocacy among those who are strong PERC supporters online

SEASONALITY CAN GUIDE OUR CONVERSATION WITH CONSUMERS

Propane is a part of what consumers are passionate about, particularly grilling, outdoor living, camping, and portability during the summer

• Proudly Propane can build on existing messaging for 2017 campaign content, focusing on what is unique to consumers

• Create seasonal topics around consumer pain points to help them with the advice they’re seeking

ALIGN WITH CONSUMER INTERESTS

Over 70% of consumer conversation about propane is related to residential use

• Discussions were often about consumers troubleshooting, asking for a product solution, or proudly sharing advice about specific topics

• Our current Proudly Propane messaging focuses on awareness and caters to industry priorities

ALIGN WITH CONSUMER INTEREST

Proudly Propane should recognize consumer’s interests by relating to their passions first

Then Proudly Propane can retarget those consumers with further information about propane when they’re more likely to be open to it

LEVERAGING CONSUMER INTERESTS

Develop a retargeting strategy for Proudly Propane to speak to consumer’s interests and then follow up with engaged viewers with further information about propane

• Educate consumers on broader propane facts and uses that may expand the conversation

THE 2017 PLAN

SO WHAT’S NEXT?

2017 CONSUMER BRAND CAMPAIGN

What We Want

• Maintain levels of familiarity and favorability (aided and unaided)

• Increase marketer satisfaction

What We Are Going To Do

• Deepen consumer education and drive advocacy

• Explore economies in media buying across PERC

• Assess value of a Marketing Automation platform

• Promote relevant and timely content distribution

• Promote people behind the brand

• Build on Blue

2017 COMMUNICATIONS

How We Are Going To Do It

• Deploy a platform/channel synergy, with highly entertaining and emotional content

• Encourage authentic, shareable, user-generated content

• Maintain strong brand visibility across PERC

• Execute and scale a consistent, integrated marketing message

• Provide a platform on which users can enjoy interactive content and learn

• Double down on video – test live streaming

• Leverage multi screen marketing

• Talent recalibration

MULTI-YEAR PLAN

Year One Focus

Familiarity

Favorability

Year Two Focus

Maintain Familiarity

Maintain Favorability

Year Three Focus (TBD)

Increase Familiarity

Increase Favorability

Increase trial and

additional applications

Based on what we learned and in light of available resources, our goal for 2017 will be to maintain the gains from 2016.

AVOID GOING DARK

• Millward Brown observed that brands can go dark for six months or

so with little negative effect

• But longer off-air periods are likely to

weaken brand health

• Lower-interest brands like propane

may be especially vulnerable

Source: Millward Brown Knowledge Point Report

KEY CONSIDERATIONS

• Marketers desire to cover two time periods (spring and fall)

• Budget reduction cannot accomplish brand growth, simply maintain what was achieved

• Ad industry research shows detrimental impact of long, dark, off-air periods (Millward Brown)

• Promote propane lifestyle in social content instead of propane itself

• Social sweepstakes can build brand engagement

COMMUNICATIONS PLAN

• Maintain 2016’s overall goals and strategy given success in Nielsen brand metrics and reduced budget

• Continue with optimal media target and geographic coverage

• Refine the media mix using 2016 learnings

• Hone partner selections to maximize existing Blue assets, provide positive brand association and align with topical content

• Use measurement tools to gauge campaign success as done in 2016 (Nielsen, Sizmek, social listening)

TARGET AUDIENCE REFRESHER

KEY TARGET AUDIENCES

SIMPLE LIFE

55-74 years old

HHI <$100k

Couples

Own Residence

51% own a dog

ENTRY LEVEL

35-54 years old

HHI $75-200k

Families w/ Kids

Own Residence

68% own a dog

TRANSITIONAL

<44 years old

HHI <$50k

Couples/Families

Rent Residence

48% own a dog

Honest, straightforward, reliable people who value their independence and self-sufficiency and take

pride in how they live

Adults 35-64 with limited access to natural gas

GEOGRAPHY

Efficient awareness

Cover all marketers

Maintain brand growth among

Simple Life & Entry Level

Transitional target halo reach

MAIN FOCUS

OVERLAY

NATIONAL

GEO-TARGET

Air cover

Bullseye focus

OPTIMIZED MEDIA MIX

TV saw greatest ad recall nationally and

Propane Country

Video Print Audio Digital

2016 Actual 2017 Estimated

OPTIMIZED MEDIA MIX

Propane Country

Highly effective in increasing brand

metrics

OPTIMIZED MEDIA MIX

Propane Country

metrics

OPTIMIZED MEDIA MIX

Propane Country

metrics

Cost efficient and impactful; drives engagement on

ProudlyPropane.com

MEDIA PARTNERS

RETURNING SNAPSHOT NEW FOR CONSIDERATION

RECOMMENDED MEDIA PLAN 2017

MEDIA MIX COMPARISON

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2017 CONSUMER EDUCATION CAMPAIGN

DOCKET 20995

DOCKET 20995 – 2017 CONSUMER EDUCATION CAMPAIGN

Building on the momentum of the new consumer education campaignin 2016, the 2017 campaign will be designed to maintain gains infamiliarity and favorability of propane, improve consumer perceptionsof the fuel, and make consumers more receptive to propane salesmessages.

The campaign will continue using paid media, earned media, andowned media to promote the propane brand and will continue offeringmaterials that marketers can use to boost their own outreach programswhile extending penetration of the national campaign into localmarkets.

CONSUMER EDUCATION ($8,240,000)

2017 Consumer

Education Campaign$8,240,000 $8,240,000 $0

2017 CORPORATE COMMUNICATIONS

DOCKET 20997

DOCKET 20997 – 2017 CORPORATE COMMUNICATIONS

• Coordinate PERC’s corporate media relations.

• Operate PERC’s corporate social media programs.

• Communicate with marketers through video, email, and social media.

• Oversee development of consumer-facing content on propane.com and marketer-facing content on propanecouncil.org.

• Persuade would-be do-it-yourselfers to have trained technicians install and service propane systems and appliances.

• Promote the Grilling for Heroes program, which marketers can use to promote their product, their companies, and their support for America’s armed forces.

2017 Partnership

Agreement$1,394,500 $1,394,500 $3,376,000

2017 Corporate

Communications$1,085,000* $1,085,000 $2,426,000

* $610,000 Industry Programs; $400,000 Program Support Initiatives; $75,000 Safety & Training

2017 MTST $700,000 $700,000 $1,726,000

States$1,500,000 $1,500,000 $226,000

PROPANE MARKET ASSESSMENT AND HOUSING MARKET REVIEW

Mike Sloan, ICF International

November 2, 2016

Prepared for the Propane Education

Research Council

Michael Sloan

9300 Lee Hwy

Fairfax, VA 22031

Propane Market Assessment and Housing Market Outlook

Disclaimer

This presentation presents views of ICF International. The

presentation includes forward-looking statements and projections.

ICF has made every reasonable effort to ensure that the

information and assumptions on which these statements and

projections are based are current, reasonable, and complete.

However, a variety of factors could cause actual market results to

differ materially from the projections, anticipated results, or other

expectations expressed in this report.

2017 Propane Market Conditions for Propane Retailers

1. General market conditions plus lower propane prices create opportunity

for growth, particularly for markets competing against electricity.

Residential and commercial sectors & forklift markets.

2. The housing market continues to recover and will support an expanding

base of new propane heated households.

3. The largest growth opportunities remain in internal combustion engine

markets.

However, lower gasoline and diesel prices mean the propane industry will have to work

harder to develop these markets.

4. The propane supply balance is shifting, potentially slowing future

opportunities.

From an over supplied market with propane resource prices below sustainable levels to

a market with potentially tighter supplies and higher, more volatile prices.

Propane Price Outlook

ICF forecast propane prices to

rise as Oil Prices slowly to

$75/bbl by 2025.

Increased propane exports will

result in U.S. propane prices trading

closer to international prices.

U.S. prices will fall relative to

oil as exports must go further

to find markets.

Prices are likely to become

more volatile

Propane marketers may need to bid

higher prices to keep inventories at

home during colder than normal

winters.

Sources: ICF, Bloomberg

Mont Belvieu Propane Price Forecast(Nominal)

Historical Base Low

2016/17 Winter Outlook

20,000

40,000

60,000

80,000

100,000

120,000

1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/111/112/1

Weekly Propane Storage Levels

5 Year Average 2015 2016 (weekly)Source: EIA

Propane inventories at 5-

year highs entering the

winter

Weather outlook is mixed

Some possibility for colder

than normal weather

A cold winter in the U.S.,

combined with growth in

exports could lead to

rapid inventory drawdown,

and tight end of season

markets

However, Propane Production Growth has Stalled Propane Exports & Supply show Tightening Impacts Heading into Winter

Sources: ICF, EIA

Export

Capacity U

ation (

U.S. Propane Export Capacity

Export Capacity 50% Capacity

60% Capacity 80% Capacity

Historical Exports Historical Utilization

duction 0

Change 0

U.S. Propane Production

2015 Residential Propane Market Review

2015 Housing Market Growth – Space Heating

Moderate increase in

propane home heating

from the initial 2015

housing estimates.

Growth in electric home

heated housing focused in

Southern States and

California.

Fuel Oil households

declined primarily in the

Northeast where propane

housing growth was

strongest.Sources: ICF, US Census American Community Survey

72,085 1,325

1,208,519

(222,986)

(128,853)

18,733

(400,000)

(200,000)

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Change in U.S. Households by Home Heating Fuel Type (2014 to 2015)

Natural Gas Propane

Electricity Fuel Oil

Wood Coal/Other/No Fuel/Solar

State Level Change in Propane Home Heated Households from 2014 to 2015

Three census

regions experienced

growth in Propane

Home Heated

Households in 2015.

New England added

12,300 households.

East North Central

added 10,105

households.

Mid-Atlantic added

7,593 households.

The other five

census regions

experienced modest

declines.

Sources: ICF, US Census American Community Survey

Change in Total and Propane Home Heated Households by Census Region from 2014 to 2015

Sources: ICF, US Census American Community Survey

-100,000

-50,000

50,000

100,000

150,000

200,000

250,000

300,000

350,000

East NorthCentral

East SouthCentral

Mid-Atlantic Mountain NewEngland

Pacific SouthAtlantic

West NorthCentral

West SouthCentral

Change in Total Households

Change in Propane Home Heated Households

Key New Construction Market Trends from the 2015 Survey of Construction Data

From 2014 to 2015, the number of homes built by owner or contractor (more favorable for propane) increased

while the number of homes built for sale (less favorable for propane) decreased modestly.

Total single family detached housing starts on lots larger than 1 acre (favorable to propane) continued to

increase by over 10,000 new homes, while homes on lots smaller than 1 acre (less favorable to propane)

increased by over 38,000.

Total detached housing starts outside of Metropolitan Statistical Areas (MSA’s) (favorable to propane)

increased by 8.3% to 62,800, but declined to only 9.6% of all New Housing starts.

Market share was impacted by several areas more favorable to propane home heating in new construction that

declined:

–Larger Lot Sizes Declined

–Construction Outside of Metropolitan Statistical Areas Declined

–Distribution of New Construction

Propane Space Heating Market Share in New Residential Construction declined in 2015

Propane’s

National Average:

6.0% in 2014.

4.7% in 2015.

High market

share propane

markets (Lot size

above ½ acre)

73% of new

propane residential

construction.

15.3% in 2014.

12.7% in 2015.

Source: US Census Survey of Construction

National Market Share by Home Heating Fuel

Electricity Natural gas Propane Oil Other or no heat

*Natural Gas & Propane data for 2008 & 2009 has been estimated

6.0% 5.8%

6.6%6.9%

6.3% 6.2%

5.8% 5.6%5.2%

5.8% 6.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

New England & East North Central account for the largest markets and highest market shares

4.5%2.7%

0.9% 1.5% 1.5%2.9%

10,000

NewEngland

MiddleAtlantic

East NorthCentral

WestNorth

Central

SouthAtlantic

EastSouth

Central

WestSouth

Central

Mountain Pacific

2015 Propane Housing Starts & Market Share

Propane Heated Housing Starts Propane Market Share

Residential New Construction Market Trends by Region

In 2015, U.S. propane market share of detached single family housing

starts decreased slightly to 4.7%, from 6.01 % in 2014.

Likely due to the impact of the 2013/14 winter on propane prices during the planning

phase for many 2015 new construction projects

Also caused in part by faster growth in regions with low/declining propane market share.

Propane new construction market share increased in New England, West

North Central, and West South Central.

Propane’s Share of New Construction Activity

England

Middle

Atlantic

East North

Central

Atlantic

Central

Mountain Pacific US Total

2013 49.87% 10.63% 12.93% 4.94% 5.23% 0.65% 1.15% 1.16% 2.86% 5.82%

2014 48.20% 9.47% 15.80% 4.02% 4.84% 1.48% 1.35% 2.73% 3.88% 6.01%

2015 53.67% 5.84% 13.37% 4.51% 2.70% 0.92% 1.52% 1.47% 2.93% 4.70%

Change from

2014 – 155.47% -3.63% -2.43% 0.49% -2.14% -0.57% 0.17% -1.26% -0.94% -1.32%

2015 Propane Appliance and Space Heating Unit Installations (New + Replacement)

Sources: PERC, 2016 Home Innovation Research Labs

Note the above numbers exclude Fireplaces, Self Standing

Stoves, Or Space / Room Heaters (Permanently Mounted)

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Total:Appliances*

Total: HVAC

Comparison of Propane Installations

*Appliances include: Water Heaters, Generators, Ranges,

Cooktops, Ovens, and Clothes Dryers.

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Appliance vs. Home Heating System Comparison of Installed Propane Units

Tankless

With Tank Furnaces

Boilers

Ranges

Cooktops

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

pane a

Propane Cooktop/Ranges/Ovens Sales by Region

Propane Cooktops/Ranges/Ovens % Propane

Propane Appliances Installations by Census Region

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

pane a

Propane Water Heater* Sales by Region

Propane Water Heaters % Propane

Sources: PERC, 2016 Home Innovation Research Labs

Residential Market Outlook

New Home Permitting has Continued to Increase in 2016

New residential

housing permits have

increased 9% over the

past year.

Permits for single unit

housing accounted for

68% of all permits in

Source: US Census Annual Building Permits Survey

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Quarterly Permits for New Residential Housing

Single Unit

Multi-Units

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Northeast Midwest SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

Residential New Construction Permits (2015)

New Housing Construction Markets to Continue their Slow Recovery

New housing

construction

markets continue

to recover.

Forecast for

additional growth

in housing starts in

2017 & 2018.

ICF forecast is for

new housing

construction

continues to grow

through 2020 and

then level off.

Sources: ICF, NAHB, MBA, Fannie Mae, Wells Fargo*Includes single and multi-family housing starts

2010 2011 2012 2013 2014 2015 2016 2017 2018

Forecast of New U.S. Residential Housing Starts

Mortgage Bankers AssociationNational Association of Home BuildersFannie MaeWells Fargo Securities

2017 Propane Market Outlook – New Propane Housing Starts

Residential housing markets are

improving.

Growth in new construction markets.

More competitive market.

Continued weakness in select regional

markets, such as the Middle Atlantic,

South Atlantic, and Western U.S.

Conversions away from propane

remain relatively low due to

lower prices relative to

electricity.

Fuel oil conversions will

continue to slow

Lower fuel oil prices

The number of fuel oil households is

declining.

20,000

40,000

60,000

80,000

100,000

120,000

New Propane Space Heating Households by Type

Manufactured Homes

Fuel Oil Conversions

Site-Built New Housing Construction

Source: ICF Propane Demand Forecast Model

Contact Information

Michael Sloan

Michael.Sloan@icf.com+1.703.218.2758

9300 Lee Hwy

Fairfax, VA 22031

PROPANE EDUCATION & RESEARCH COUNCILNAPLES, FLORIDA

November 2 – 3, 2016

INDUSTRY PROGRAMS

Kay Howell, CIO

INDUSTRY ENGAGEMENT

Marketers

PERC staff

Technical

expertise

States

Encourage marketers to

provide input, support, and

achieve industry goals

Increase marketers’

awareness and access to

resources and programs

Increase linkages between

PERC and state programs

Efforts that lead to greater

market and sales knowledge

Development of assessment

and reporting

Participating in the AC,

provide input to guide

programs and resources

Increased marketer access

to resources and programs

Alignment of PERC & state

programs

Increased awareness and

access to research and

training resources

Assessment and reporting

tools in place

Participation in

program development

and evaluation

Increased use of

resources and

programs

States use PERC

resources

Increased use of

market research and

marketing and sales

resources

Information provided

by tools used for

accountability and

improvement of future

efforts

Inclusive industry

decision-making

Increased value of

PERC resources

programs

Marketer

participation in new

markets

Our work Our intended results

Resources Activities Outputs Outcomes Impact

ENGAGEMENT ACTIVITIES

MTST, Webinars, and

Conference Calls

State and Local Events Participation

Advisory Committee

Meetings and Project Teams

Phone Support and Calls

Trade Publications and State Newsletters and Communications

Digital: Email, Catalog, Websites,

Facebook, Blog, Videos

Industry Trade Shows: Exhibits,

Educational Sessions

STATE / LOCAL EVENTS PARTICIPATION

Meetings attended (39 out of 45 state entities;

17 PERC staff / contractors attended)

Industry trade shows supported/attended

State or company webinars/conference calls

State or company one-on-one customization assistance

Presented at marketer events:

Michigan Summer Conference Southeast Convention CHS Summer Meetings Irrigation MTST for Missouri PGA

Supported and attended:

World Ag Expo with Western PGA Husker Harvest Days with Nebraska PGA Sunbelt Ag Expo with Georgia PGA

Supported:

Farm Science Review with Ohio PGA The Almond Conference with Western PGA Southern Peanut Growers and Georgia Peanut Show with Conger LP Gas Irrigation customer education events with Allied Propane in CA

STATE / LOCAL EVENTS PARTICIPATION –AG TEAM

STATE / LOCAL EVENTS –RESIDENTIAL & COMMERCIAL

Presented at these marketer events:

• Paraco Gas Sales Meeting

• Conger LP Gas Event

• NCPGA Summer Convention

• TNPGA Summer Convention

• 2016 Energy, Sustainability & Resiliency Conference with VAPGA

INDUSTRY EVENTS

Supported/presented at these Industry Tradeshows:

• Southeast Expo

• Western Trade Show & Convention

• Northeast Show

• North Central Convention

• Mid-States Expo

• Crossroads Expo

• MPACT

• Bergquist Open House

SOUTHEASTERN PROPANE CONVENTION

• Educational sessions led: 5

• Marketers attending PERC educational sessions: 600

• Marketers attending Roy’s PERC Update presentation: 600+

• New contacts added to our database: 658

• Number of iPad surveys completed in booth : 115

• Industry ambassadors promoting PERC events and booth: 9

• Marketers offering positive testimonials: 29

• Secured LP Gas, BPN ,Texas PGA magazines cover stories

SOUTHEASTERN EXPO – PERC WEBSITE

WEBSITE (propanecouncil.org/Nashville-2016/)

• Total Page views: 2,923

Videos Views:

• 1,056 plays – Introduction to Blue

• 245 plays – Gregg’s video on how we expect to meet consumer needs with the campaign

• 89 plays – Stuart’s video about safety and training activities at the expo

• 66 plays – Bridget’s Residential Opportunity Insights Educational Session

SOUTHEASTERN EXPO – COMMUNICATIONS

• Meet Your New Partner: 5,800 reads; 10.4 click rate

• PERC Is About To Transform How You Grow Gallons: 3,000 reads

• Take A Peek: 4,600 reads

• Periscope broadcasts: 15 during the event, with 1,800+ reached

• 67 total posts altogether on Facebook, Twitter, and Roy’s Twitter,

compared to 30 last year

MTST / WEBINARS / CONFERENCE CALLS

Propane as a Solution to Code & Above Code

Programs Webinar — 71 attended

18 26 105

754034

ROI Quarterly Webinar — 104 attended

2016 to-date64 sessions taught (70 scheduled)

820 marketers trained

169 companies participated

CONFERENCE CALLS/ONE-ON-ONE SUPPORT

EMAIL OUTREACH

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

Mowers Promo

Holiday Wishes

New Gas Check

Blue Campaign

ROI Pre-SE Expo Promo

ROI SE Expo Followup

ROI Promo

Autogas Promo

ROI Promo Followup

Safety Minutes

Plumber/HVAC Course Promo

Water Heater Code Webinar Promo 2

ROI Webinar Promo

Pull th Plug Promo

Plumber / HVAC Course Contest

PERC Update: Training Award

PERC Update: Free Guide for Homeowners

Total Opens

Pull the Plug Promo

WHAT’S A GOOD OPEN RATE?

Our Average

Open Rate:

EMAIL NEWSLETTERS

News every business day

• 5,592 subscribers

• Average 1,330 opens (24 percent)

• Average 276 clicks (21 percent)

PERC news every Friday

• 15,100 subscribers

• Avg. 4,192 opens (28 percent)

• Avg. 506 clicks (12 percent)

WEBSITES, EMAIL, FACEBOOK…

Residential Opportunities Insight Website

residentialmarketgrowth.com

Metrics to date (April to present):

• 517 registered users.

• 8,500 visits to website.

• 1,320 reports downloaded.

• 677 templates downloaded.

Council Website and Online Catalog

propanecouncil.org

Metrics through Jan – Sep 2016:

• 72,559 visits to website.

• 22,365 product downloads.

• 9,628 product orders.

CATALOG

Number of companies that downloaded or

ordered …

3,300 — 1 or more products.

1,028 — 2 or more products.

636 — 5 or more products.

288 — 12 or more products.

2014 2015 2016

Average Monthly Downloads and Orders

January - September

2016 CATALOG ACTIVITY BY STATE

Number of Orders and Downloads

471341178

202977

748 403854

777479

131142

121 723

Forty videos aimed at propane marketers earned 22,000 views on PERC Facebook

2017 PLANNED ACTIVITIES

Establish an AC Industry Engagement Project Team to develop

engagement program and evaluate progress

Align with states to support implementation of PERC programs

Call marketers to assist with FPR registration & survey marketers

Establish a forum for marketing, sales, and operations managers

Increase MTST Online Resources offerings

2017 PLANNED ACTIVITIES

Use S&T online training to support blended learning adoption

Add personalized recommendations feature to propanecountil.org

to help marketers find the right resources in the product catalog

Use a marketer leads nurturing program to increase awareness

and use of resources

Survey marketers to solicit industry feedback and assess

engagement

OUTCOMES / MEASUREMENT

• Active participation in program development and evaluation among AC members

• Increased numbers of marketers utilizing resources & programs

• Increased use of market research and marketing/sales training resources by sales/marketing/operations managers

• Increased utilization of PERC resources and programs by states

• Information provided by tools used for accountability and improvement of future efforts

MARKETER TECHNOLOGY & SALES TRAINING

DOCKET 20973

2017 Partnership

Agreement$1,394,500 $1,394,500 $3,036,000

2017 Corporate

Communications$610,000* $610,000 $2,426,000

2017 MTST $700,000 $700,000 $1,726,000

States$1,500,000 $1,500,000 $226,000

ONLINE TRAINING APPROACH – DEVELOPMENT

• MTST Digital Task Force• Dave Bertelson

• Brian Brooks

• Chris Kowalski

• Paula Laney

• Bryan Lewis

• Brian Mater

• Mike Walters

• GP Strategies

• PERC

PILOT TESTING

• 12 industry volunteers

• 4.75/5.0 stars for water heater module

• 4.5/5.0 stars for school bus

• Feedback

• “Very professionally done! Excellent!!!”

• “Everything seemed to flow nicely.”

• “Some very good information for beginners into the water heater propane sales area.”

• “I thought the program covered all bases to get into the school bus autogas market.”

MTST DIGITAL – NEXT STEPS

• LMS Set-up

• Development of next modules

• Energy Pod

• Forklift

• Autogas

ABOUT THE PROGRAM

• 2017 Budget: $700,000 – based on est. 60 classes

• Keep 7 existing modules:• Residential (2 courses), Commercial, Irrigation Engines, Mowers,

Autogas, Customer Service Representatives (CSR)

• Add 1 additional module

• Includes digital training

ABOUT THE PROGRAM

• 2016 Budget: $665,000 for 60 classes• Included costs for selecting and onboarding new

vendor

• History of program• 70 classes scheduled in 2017

• To date, trained 3000+ attendees, 600+ companies

• Held classes in 44 states

DOCKET 20973: 2017 MARKETER TECHNOLOGY & SALES TRAINING

Marketer Technology and Sales Training transfers marketplace knowledge,data, and benefits associated with new applications to the propane marketer.Combined with customized sales tactics by market, this program enables themarketer to increase gallons and market share by offering new technologiesand services to their customer base. The addition of the Customer Servicemodule in 2015 has greatly expanded the reach of the program.

2017 Partnership

Agreement$1,394,500 $1,394,500 $3,036,000

2017 Corporate

Communications$610,000* $610,000 $2,426,000

2017 MTST $700,000 $700,000 $1,726,000

States$1,500,000 $1,500,000 $226,000

PARTNERSHIP WITH STATES

DOCKET 20977

DOCKET BUDGET REQUESTED TOTAL REMAINING

2017 Partnership

Agreement$1,394,500 $1,394,500 $3,036,000

2017 Corporate

Communications$610,000* $610,000 $2,426,000

2017 MTST $700,000 $700,000 $1,726,000

States$1,500,000 $1,500,000 $226,000

ABOUT THE 2016 PROGRAM

• All program funds are allocated to States based on most recent API report

• Maintain dollar-for-dollar match with State Rebate funds

• Awarded 100% of 2015 Program Funds

• Awarded 76% of 2016 Program Funds (as of 10/20/16)

2016 FUNDS AWARDED, BY ACTIVITY

Consumer Safety Messaging

Demonstration Vehicle Data Collection

External Professional Training

Off-Road Incentives3%

On-Road Incentives2%

Propane Emergencies5%

Safe Installation of Appliances

Technology Demonstrations

UNUSED24%

As of October 20, 2016

DOCKET 20977

• The Partnership with States program supports joint efforts with the

states by providing funding for consumer education, consumer safety,

end user training, and market development projects.

• The program’s activities are designed to maximize the reach and

introduction of PERC’s national consumer education campaign, new

technologies and materials to potential end-users at the state level.

• Partnership activities target external audiences such as residential

consumers, builders, farmers, landscapers, fleet managers and fire

service personnel.

DOCKET 20977

• Primary objective is to increase industry engagement with PERC

programs and resources by informing, educating, promoting, and

collaborating with state associations.

• Partnership with States funds will match, dollar-for-dollar, state rebate

funds requested for an activity.

• Funds will be dispersed among states based on the most recent API

Sales Survey, which is also used to allocate state rebate funds.

• Unused funds will be de-obligated at the end of the program.

PROGRAMMATIC CHANGES FOR COUNCIL CONSIDERATION

Amend the 2017 eligible programs to include:

• Forklift projects in the off-road program

• Emphasize on HVAC and plumbing professionals in construction professional education program

• Support services related to low emissions technical expertise

FINANCIAL CHANGES FOR COUNCIL CONSIDERATION

• Eliminate matching funds requirement

• Consumer Education Campaign Support

• Safe Appliance Rebates

• Use of PWS funds with no matching funds requirement for state staff travel expenses

• Allocate State Rebate funds and Partnership Program funds October 1 of each year

2017 Partnership

Agreement$1,394,500 $1,394,500 $3,036,000

2017 Corporate

Communications$610,000* $610,000 $2,426,000

2017 MTST $700,000 $700,000 $1,726,000

States$1,500,000 $1,500,000 $226,000

MARKET REPORTS

Tucker Perkins, CBDO

RESIDENTIAL AND COMMERCIAL MARKET

RESIDENTIAL & COMMERCIAL ($2,394,800)

2107 Residential &

Commercial Market

Outreach$1,809,800 $1,809,800 $585,000

2017 CAMPAIGNS

• Pull the Plug on Electric Water Heaters

• Propane Energy Pod Builder Incentive Program

• Geothermal’s Dirty Secret

• Plumber/HVAC Outreach

• Commercial Propane Applications eBook

• Commercial Standby Power

• Modular/Manufactured Homes

COMMERCIAL ASSOCIATION OUTREACH

• Building Owners & Managers Association

• American Hotel & Lodging Association

• Association for Learning Environments

• Associated General Contractors of America

• American Society for Healthcare Engineering

Residential Opportunity Insights

www.residentialmarketgrowth.com

Audience Acquisition and Nurture Program

Digital Advertising

International Builder Show

KEY TACTICS

Social Media

Propane Energy Update eNewsletter

Training Programs

Resource & Content Promotion

WHAT’S DIFFERENT FROM 2016?

• 2016 Budget – $2,166,000

• 2017 Budget – $1,809,800

• Difference – $356,200

• Eliminated:

• Heating Oil Campaign• Residential Standby Power

Campaign• Rental Market Outreach• Greenbuild Expo• The Rental Show

DOCKET 20988 – 2017 RESIDENTIAL & COMMERCIAL MARKET OUTREACH

The 2017 Residential & Commercial Market Outreach program will continue to

target individuals and organizations that are critical to the specification of

propane and propane applications in homes, commercial facilities, and on

jobsites. The individuals and organizations include builders, general

contractors, architects, engineers, and building owners. This program will have

a small amount of dedicated funding for targeted outreach to modular and

manufactured home builders, and a separate program and funding for plumber,

HVAC, and votech schools to include training in their curriculum.

RESIDENTIAL & COMMERCIAL ($2,394,800)

2107 Residential &

Commercial Market

Outreach$1,809,800 $1,809,800 $585,000

AUTOGAS MARKET

ENGINE FUEL ($5,940,500)

2017 Propane Autogas

Technician Training$101,296 $101,296 $5,839,204

2017 Material Handling

Outreach$470,000 $470,000 $5,369,204

Market Outreach$1,303,000 $1,303,000 $4,066,204

2017 Outdoor Power

Equipment Outreach$1,032,500 $1,032,500 $3,033,704

PROGRAM OBJECTIVES

• Target school transportation market.

• Target medium duty fleets in key vertical market segments.

• Support the propane autogas-fueled vehicle aftermarket.

• Elevate the propane autogas brand through public relations.

• Use tradeshows as opportunity to promote propane autogas’ advantages and support manufacturing partners.

PROGRAM OBJECTIVES

• Engage propane marketers selling into the propane autogas market.

• Engage propane retailer’s fleet managers to support adoption of more propane autogas fueled vehicles in the propane fleet.

• Engage key stakeholders – such as Clean Cities Coalitions and National Labs – in market development activities.

• Support OEM dealer training and open house events.

• Back to School Campaign

• No celebrity spokesperson in 2017

• PR

• Added national PR outreach

• Scaled back tradeshow presence

• National Lab Outreach

• Added Propane Autogas Vehicle Technology Forum

• Dealer & Distributor Open House Event Support

DOCKET 20969 – 2017 AUTOGAS MARKETING & OUTREACH

This project is a comprehensive outreach & communications project for theautogas market. The strategic objective of this program is to engage originalequipment manufacturers, support dealers & distributors actively selling orinterested in selling propane autogas fueled vehicles, end users, propanemarketers and other stakeholders to in expanding the use of propane throughincreased adoption of autogas.

Outreach$470,000 $470,000 $5,369,204

Market Outreach$1,303,000 $1,303,000 $4,066,204

2017 Outdoor Power

OUTDOOR POWER EQUIPMENT MARKET

Outreach$470,000 $470,000 $5,369,204

Market Outreach$1,303,000 $1,303,000 $4,066,204

2017 Outdoor Power

2017 PROGRAM OBJECTIVES

• Target commercial landscapers in markets where several triggers are driving consideration for propane-powered equipment.

• Provide opportunities for commercial landscapers to experience the performance of propane and resolve concerns they may have about the fuel.

• Provide support for manufacturer-sponsored dealer open houses in key green markets where there is a high density of landscapers, high gasoline fuel costs, and readily available propane.

• Raise awareness of both OEM and conversion equipment options for landscapers.

• Engage more equipment dealers and add them to the new Dealer Point program on propane.com.

• Leverage the Propane Mower Incentive Program with state incentives and/or available OEM rebates.

2017 Program Objectives

• Attract potential customers, engage with the customer and the equipment dealer, activate the sales/purchase cycle (moving from interest to adoption), and turn the adopters into key advocates.

• Promote and market the advantages propane offers in golf and turf markets through participation in key market leadership groups, the industry tradeshow, and PR. Continue to leverage the results and testimonials from the Golf and Turf Demonstration program.

• Target allied industries and vertical markets which share the same engine architecture and platforms by promoting the advantages propane offers those customers -- floor polishers/floor care, concrete finishing, light-duty material movers, forestry, engine driven welders, blowers, and industrial vacuums. Capitalize on the organic growth already taking place in these markets.

2017 TACTICS

• Trade PR

• Tradeshows

• Paid Media

• Dealer & Distributor Engagement

• Propane Marketer Communication & Engagement

• Added allied industries and vertical markets which share the same engine architecture and platforms to promote the advantages propane offers those customers.

• Floor polishers/floor care, concrete finishing, light-duty material movers, forestry, engine driven welders, blowers, and industrial vacuums.

• Scaled back golf strategic partnerships.

• Slightly scaled back landscaper outreach; stronger dealer engagement program.

DOCKET 20970 – 2017 OUTDOOR POWER EQUIPMENT OUTREACH & MARKETING

This project is a comprehensive marketing & communications program for theprofessional landscape, golf and turf, and outdoor power equipment/light-dutyconstruction market. This program will engage original equipmentmanufacturers, equipment dealers & distributors, end users, propanemarketers and other stakeholders to expand the use of propane throughincreased adoption of propane-powered equipment.

Outreach$470,000 $470,000 $5,369,204

Market Outreach$1,303,000 $1,303,000 $4,066,204

2017 Outdoor Power

MATERIAL HANDLING MARKET

2017 PROGRAM OBJECTIVES

• Clarify the competitive market situation for propane-fueled forklifts.

• Update the positioning and messaging for propane in forklift applications.

• Re-energize propane marketers by equipping them with compelling tools to reestablish their market share.

• Build renewed awareness of the advantages of propane-fueled forklifts among top end user audiences.

• Support dealer and distributor networks in the sale of propane-fueled equipment.

2017 TACTICS

• PR

• Dealer & Distributor Engagement

• Co-Marketing

• Propane Marketer Engagement

• Paid Media

• Content Development

DOCKET 20971 – 2017 MATERIAL HANDLING OUTREACH & MARKETING

This project is a comprehensive outreach & marketing project for the materialhandling market. The objective of this program is to engage original equipmentmanufacturers, equipment dealers & distributors, end users, propanemarketers and other stakeholders in expanding the use of propane throughincreased adoption of propane-powered equipment anywhere materialhandling equipment is used.

AGRICULTURE MARKET

AGRICULTURE ($1,985,535)

2017 Farm Incentive

Program$300,000 $300,000 $1,685,535

2017 Agricultural Market

Outreach Program$896,000 $896,000 $789,535

2017 OBJECTIVES

• Continued emphasis on communicating with market

influencers.

• Streamlining large event support so can put additional

resources to local events, regional events, and consumer

education.

• Developing a new ag campaign to highlight the advances in

propane technologies and the benefits these provide to ag

operations. Messaging will reach both partners and customers,

and build a foundation for future product launches.

• Utilize market research to improve messaging.

2017 TACTICS

• Content Development

• PR

• Trade Shows and Events• Focus on priority shows, support additional regional and local shows.

• Outreach to Influencers & Consumers

• Market Research

• New universal ag campaign to make it less costly and less time consuming to promote regional and time sensitive market opportunities. This will allow us to support the commercialization of new products more effectively and efficiently.

• More frequent communications with the ag equipment sales channel and the propane industry through SalesLink and an ag market editorial calendar.

• Market research and refined messaging based on research findings.

• Additional outreach in growth markets and additional consumer education as the ag market shows signs of improving revenues.

• More website updates to improve sales conversions.

• Fewer print case studies. Additional video testimonials.

DOCKET 20983 – 2017 AGRICULTURE MARKET OUTREACH PROGRAM

The agriculture outreach program communicates the advantages of propaneand propane equipment with ag market stakeholders, including propanemarketers, agriculture customers, equipment manufacturers, distributors,dealers, and other market participants.

The agriculture market is an important market for the propane industry,accounting for approximately 10 percent of propane demand. This outreachprogram will support PERC’s agriculture strategy to grow propane demand inthe agriculture market by facilitating communication among customers andinfluencers in the agriculture and propane industries.

AGRICULTURE ($1,985,535)

2017 Farm Incentive

Program$300,000 $300,000 $1,685,535

2017 Agricultural Market

Outreach Program$896,000 $896,000 $789,535

CHIEF FINANCIAL OFFICER’S REPORT

Jim Harris

2016 API SURVEY & REPORT

DOCKET 21037

PROGRAM SUPPORT INITATIVES ($1,790,000)

2017 Corporate

Communications$400,000 $400,000 $1,390,000

2016 API Survey

& Report$186,080 $186,080 $1,203,920

2017 Advisory Committee

& Program Support$490,000 $490,000 $713,920

2017 Market Research

Initiative$344,580 $344,580 $369,340

* Additional $610,000 Industry Programs,

$75,000 Safety & Training

DOCKET 21037: 2016 API SURVEY & REPORT

2016 BUDGET: $186,080

Overview: this docket covers the expense to conduct a 2016

sales of propane survey in 2017.

Purpose: to provide an equitable statistical methodology to

distribute State Rebates and Partnership with States funding;

and to determine the % of the 2018 annual assessments that

can be applied to on-road engine projects and activities.

Budget Itemization

API: $176,080

ICF International: $10,000

TOTAL: $186,080

DOCKET 21037:2016 API SURVEY & REPORT

2017 BUDGET: $186,080

Three Year Historical Funding

2016 Funding: $179,850

2015 Funding: $174,951

2014 Funding: $177,782

DOCKET 21037: 2016 API SURVEY & REPORT

2017 Corporate

Communications$400,000 $400,000 $1,390,000

2016 API Survey

& Report$186,080 $186,080 $1,203,920

& Program Support$490,000 $490,000 $713,920

Initiative$344,580 $344,580 $369,340

2017 ADVISORY COMMITTEE & PROGRAM SUPPORT

DOCKET 21036

2017 Corporate

Communications$400,000 $400,000 $1,390,000

2016 API Survey

& Report$186,080 $186,080 $1,203,920

& Program Support$490,000 $490,000 $713,920

Initiative$344,580 $344,580 $369,340

DOCKET 21036: 2017 ADVISORY COMMITTEE & PROGRAM SUPPORT

2017 BUDGET: $490,000

Overview: cost associated with all advisory committee

functions as well as the project administration of PERC’s

programs.

Purpose: logistical support for advisory committee meetings,

travel expenses to support business development and product

commercialization, insurance, travel costs associated with

program staff attending Council meetings.

Budget Itemization

Meeting Expenses: $171,000

Staff Travel: $215,000

Consulting Fees: $18,000

Insurance: $47,000

Various: $39,000 (e.g. association dues, conferencing, supplies, printing)

TOTAL: $490,000

2017 BUDGET: $490,000

2016 Funding: $460,000

2015 Funding: $490,000

2014 Funding: $459,000

2017 Corporate

Communications$400,000 $400,000 $1,390,000

2016 API Survey

& Report$186,080 $186,080 $1,203,920

& Program Support$490,000 $490,000 $713,920

Initiative$344,580 $344,580 $369,340

2017 PROPANE MARKET RESEARCH INITIATIVE

DOCKET 21038

2017 Corporate

Communications$400,000 $400,000 $1,390,000

2016 API Survey

& Report$186,080 $186,080 $1,203,920

& Program Support$490,000 $490,000 $713,920

Initiative$344,580 $344,580 $369,340

DOCKET 21038: 2017 PROPANE MARKET RESEARCH INITIATIVE

2017 BUDGET: $344,580

Deliverable: collection of market intelligence, forecast

modeling & analysis highlighted by market segmentation and

propane gallon sales

Purpose: support mapping PERC’s strategic direction and

ultimately evaluate the market impact of PERC programs

Contractor: ICF International

Task 1) Propane Market Data Analysis and Forecasting :

Budget $231,120

- Develop and maintain propane market databases and

forecasting models

- Forecast propane market demand and supply trends

Task 2) Market Analysis: Budget $87,800

- Assist PERC in the development of forecasting gallons by

program.

- Used to identify our actual gallon results compared to our plan.

- Used in part for our consideration in developing our program

budget priorities.

- Integrate the market information into the Propel process.

Task 3) Industry Outreach and Support : Budget $25,660

- Presentations on propane market issues at PERC Council and

propane industry meetings

- Respond to industry support

- Respond to industry member requests for market information

2017 BUDGET: $344,580

Docket 20692: 2016 Propane Market Research Initiative: $394,580

2017 Corporate

Communications$400,000 $400,000 $1,390,000

2016 API Survey

& Report$186,080 $186,080 $1,203,920

& Program Support$490,000 $490,000 $713,920

Initiative$344,580 $344,580 $369,340

INDUSTRY & PUBLIC COMMENTS

OLD BUSINESS

NEW BUSINESS

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