State officials should know later this month if a grant program designed to boost Iowa sales of ethanol-blended gasoline is working. Last year, law makers voted to spend 13 million dollars over the next three years to entice retailers to sell E-85, a blend of fifteen-percent gasoline with a lot more ethanol than most pumps dispense.
Stations that put in pumps for E-85 could get $30,000 grants. But Dave Smitherman, chair of the Renewable Fuels Infrastructure Board, said retailers had to sign a five-year contract to get the incentive. He says they tried to balance the responsibility of the applicant, who’s getting a state grant, with enticement for the retailer to get into the venture.
Smitherman says most of his board wanted to require only a 3-year contract, but the Department of Economic Development, the Farm Bureau, and the Corn Growers demanded the five-year commitment. Smitherman says, "Businesspeople have to understand they’re taking a risk — and they are."
Smitherman says 23 retailers have been awarded grants and now have until the end of next week to decide if they still want to participate in the program. Meanwhile a lobbyist for the Iowa Farm Bureau says five-year contracts are standard for any company receiving a state grant, and they don’t expect that to curtail applications for the program.