Order P.931102 - Petroleum - Village Store (Marlene Simmons & Lowell Affleck), Bedeque

Order No. P.931102

IN THE MATTER of the Island Regulatory and Appeals Commission Act, Stats. P.E.I. 1991, Chapter 18; and the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5.1;

- and -

IN THE MATTER of an application by Lowmar Inc. (Marlene Simmons & Lowell Affleck) for an initial petroleum products license in respect of a proposed self-serve motor fuels outlet to be located at the VILLAGE STORE, located in BEDEQUE, P.E.I.

Tuesday, the 2nd day of November, A.D., 1993

BEFORE

Linda Webber, Chairman
John Blakney, Vice-Chairman
Michael Ryan, Commissioner

Decision and Order

Table of Contents

Appearances and Witnesses

Decision

I. Introduction

II. Evidence on Behalf of the Applicant

III. Findings
      (Demand/Anticipated Volumes; Location/Physical Accessibility, Traffic Flows, Record of Performance, Other)

Order

Appearances and Witnesses

Participants in the hearing on 26 October 1993 and the parties for whom they appeared were as follows:

FOR LOWMAR INC. - APPLICANT:

Witnesses:

Marlene Simmons
Lowell Affleck
Charlene Green

FOR THE COMMISSION:

H. Doris Pursey, Director - Petroleum Division
Harry MacDonald, - Assistant to Director -Petroleum Division

RECORDING SECRETARY:

Faye Weeks

Decision

I. INTRODUCTION

By application dated 26 July 1993 and received by the Commission on 9 August 1993, Lowmar Inc. applied to the Commission for a petroleum products license in respect of a proposed self-serve motor fuels outlet to be located at the Village Store in Bedeque, P.E.I.

The Applicant completed the application on 9 August 1993, and it was publicly advertised by "Notice of Application" dated 10 August 1993, with a closing date for the filing of interventions being fixed at 9 September 1993. Following this date, there having been only one intervention in support of the application filed, being from Marilyn Affleck, the Commission reviewed the application and determined that there was insufficient information upon which to base a decision, and requested that a public hearing be scheduled for 26 October 1993 at 9:00 a.m. Said hearing was publicly advertised by "Notice of Hearing" dated 22 September 1993. This hearing commenced as scheduled. Witnesses for the Applicant were Marlene Simmons, Lowell Affleck, and Charlene Green.

A total of eighteen documents were entered as Exhibits in this Hearing. The first group of Exhibits related to the application and supporting documentation (Exhibits 1 to 8), Exhibit 9 was the Notice of Application, Exhibit 10 the letter of intervention filed by Marilyn Affleck, Exhibit 11 was the Notice of Hearing and Exhibit 12 was an advertisement announcing the reopening of the Village Store. Exhibit 13 was a letter received by the Commission on 12 October 1993 from J. C. Plomp of Bedeque and Exhibit 14 was a letter received on 25 October 1993 from Peter Harrell, Fernwood, both of which were written in support of the granting of the license. Exhibits 15 and 16 relating to the approximate volumes of outlets in the surrounding area as defined on an excerpt from the Prince Edward Island map were prepared by Commission staff. Exhibits 17 and 18 were filed in support of the application by the Applicant at the hearing. Exhibit 17 was a document consisting of eleven pages of signatures, each page which was headed "Gas Petition". All persons who signed this document indicated that they were in favour of having gasoline available at this site. Ms. Simmons testified that these signatures had been obtained as a result of having the petition on the counter in the store for the period 9 to 25 October 1993. Exhibit 18 was a letter dated 25 October 1993 signed by Wayne Linkletter of Linkletter Welding Ltd. which indicated support for the granting of the requested license.

Persons forwarding letters or signing petitions do not often make themselves available to be examined with regard to the specifics of their intention, and such was true in this case as well. However, the acceptance of items of this nature provides the Commission with some information as to the general feeling of these persons and also provides the public with a means of expression of support for or opposition to a matter. Therefore some weight is given items such as these by the Commission in determining applications as an illustration of demand or of opposition with respect to a proposed service.

II. EVIDENCE ON BEHALF OF THE APPLICANT

Lowmar Inc., the Applicant, was represented at this hearing by Marlene Simmons and Lowell Affleck. One additional witness, Charlene Green, testified for the Applicant in support thereof. All three persons were sworn at the opening of the hearing, and sat as a panel.

Ms. Simmons and Mr. Affleck advised the Commission that they had purchased the property known as the Village Store at Bedeque and recently reopened it as a convenience store and take-out restaurant, and now wished to have the outlet again licensed for the sale of gasoline. Ms. Simmons also indicated that they were in the business of selling postage stamps, lottery tickets, operating video lottery machines and rental of videos. Although different proposed hours of operation were indicated on Exhibit 3, the application form, an ad recently published in the Journal-Pioneer, entered as Exhibit 12, indicated that the hours of operation of the facility are in fact from 7:30 a.m. to 9:30 p.m. Monday to Saturday, and from noon to 9:30 p.m. on Sunday.

The proposed operators of the outlet gave evidence with respect to the proposed operation, and elaborated on the information filed with the application. This information included a traffic count of the Dunk River Road obtained from the Department of Transportation and Public Works, a house and vehicle count taken in the surrounding area outlined on an attached map, a letter setting forth the Applicant's reasons for wishing to reopen the previously-licensed outlet, and a sketch of the layout of the property on which it is situated. Specifics with respect to the "gas petition" filed as Exhibit No. 17 and responses to questions concerning the four persons who filed letters of support were given. Ms. Green gave evidence as a recent resident of the community to the effect that such an outlet would be a convenient source of gasoline to her and her husband, as well as to other residents of the community.

The hearing adjourned at approximately 11:30 a.m. with the matter to be taken under advisement by the Commission.

III. FINDINGS

The Commission has a legal requirement under Section 20 of the Petroleum Products Act to consider the public interest, convenience and necessity in the issuance of an initial license for the retail dispensing of motor fuels in this Province.

The evidence of the three witnesses for the Applicant, the petition and the individual letters received collectively provided satisfactory evidence of sufficient community support for its proposal, and this evidence assisted in our review. The written documentation clearly indicated a demand for the proposed service, as did the evidence of the witnesses for the Applicant. The Commission also notes that no objections to this application were raised. Ms. Simmons and Mr. Affleck noted that they began to think about applying for a license to sell gasoline at the time they purchased the outlet, which had been licensed to sell gasoline in this area for many, many years. They further testified that they had been approached by many residents as to when they would be in a position to sell gasoline. Many of these persons pointed out how inconvenient it was not to have a gasoline outlet operating in the community.

With respect to the location of the outlet and related dispensing equipment, evidence relating to the proposed market area to be served would lead us to conclude that the other outlets located nearest to this site do not meet the perceived needs of people of the Bedeque area with respect to the purchase of gasoline. Exhibit 6 indicates that the average daily count of vehicles travelling on the Dunk River Road, upon which this outlet fronts, was 950 vehicles in 1992. Similar statistics were not provided for the Blue Heron Drive, but as it is a designated scenic drive, one can conclude that this in itself generates a considerable amount of traffic through this area, especially in the summer months.

The physical accessibility to and from the dispensing equipment as proposed is certainly not ideal, as at present entry and egress is uncontrolled. However, the outlet has operated on that lot for many years without apparent problems, and because the outlet is located near an intersection, the speed of vehicles passing in front of the lot should enable entrance and exit to the dispensing facilities without incident.

We would point out, however, that matters relating to safety are always a matter of concern to the Commission, and should at any time it be established that a safety problem exists with respect to the location or operation of equipment at a licensed outlet, a license can be suspended or its renewal denied until matters are rectified to the satisfaction of the licensing or other recognized authority such as the Department of Transportation & Public Works, Provincial Fire Marshal, or Department of Environmental Resources.

The Commission accepts the evidence of Mr. Affleck that there has been some recent residential and commercial growth in the area, e.g., the relocation to Central Bedeque from Fredericton of an operation of the P.E.I. Bag Co. Ltd.

Of course, in considering this matter, the Commission also looked at what effect the licensing of this outlet might have on other licensed outlets in the surrounding areas. It was considered that Read's Corner Service Station, Middleton Grocery and the Kinkora Service Station are located nearest this site, and therefore could be expected to be most affected by the requested licensing. A review of the past volumes generated at this formerly-licensed outlet, as well as of other outlets in the general area, was conducted. This information was obtained from Exhibit 15 entitled "Approximate Volumes (Litres) 1987 to 1992 (Where Available) in the Vicinity of Village Store, Bedeque" prepared by Commission staff. It was noted that the total gasoline sales in the area defined in this Exhibit have remained relatively static for the period covered therein, peaking in 1990 at almost 4,000,000 litres, even though two of the eight outlets referred to have closed, one in 1990 and one in 1991. Gasoline sales at Middleton Grocery increased from 780,677 litres in 1989 to over a million litres in each of the next three years, and the Village Store was operating in competition with this site during that same period, with the exception of the latter portion of 1992. The Kinkora Service Station (which was not included in Exhibit No.15 as it has just recently reopened) and Read's Corner Service Station were also operating in competition with the Village Store previously, and it is not felt that the reopening of this outlet will have sufficient detrimental effect on these existing operations to warrant denying the general population of the Bedeque area the resumption of the gasoline service. It was also noted by the Commission that two of the nearest outlets are located directly on the Trans-Canada Highway and one on Route 225, entirely different routes from those forming the intersection upon which the Village Store is located.

Some volume would obviously be gained from other licensed outlets, but to a lesser degree. Overall, the evidence would not suggest such detriment to other operators as would either seriously jeopardize those other outlets or overcome the public interest, convenience and necessity found to justify the proposed reopening of this outlet.

With respect to the Applicant's record of performance and/or fitness, evidence on behalf of the Applicant with respect to the costs of re-establishing the outlet as a motor fuels facility could best be described as weak, as were predictions with respect to anticipated volumes and associated gross annual revenue from the sale of gasoline. The Applicant proposes to equip the outlet to sell mid-grade gasoline only through self-serve facilities. One 5,000 litre underground storage tank is presently located on the property, which tank is said to be the property of Irving Oil Limited. Witnesses for the Applicant testified that this wholesaler was contacted with a view to discussing the reopening of the site as a motor fuels outlet, and were advised to first obtain the approval of the Commission prior to entering negotiations with respect to equipment and supply of product. Neither of the two principal witnesses on behalf of the Applicant were able to enlighten the Commission with regard to the capital cost related to the lease or purchase and installation of the necessary equipment and associated alterations to the outlet, as these costs had not been determined as of the date of the hearing. As a result, the Commission was unable to come to any valid conclusions as to the likely viability of the outlet--the only hard evidence available being the historical volumes of the outlet. This evidence would suggest that financial viability could be a problem. However, given the Applicant's apparent willingness to accept the risk involved, and in view of its recent action with regard to the other components of the operation, we do not consider this sufficient to warrant denial of the application. We are, however, requiring that the Applicant provide a further submission to the Commission for approval with respect to the type and location of the equipment to be installed and the planned alterations to the building and site prior to commencing such construction and installation. This we view necessary in order to assure ourselves that the outlet will meet current requirements and that a proper evaluation of the capital cost involved has been undertaken and is acceptable to the Applicant.

It is also obvious from the evidence before us that the Applicant has no previous experience with respect to the sale of petroleum products. Testimony was given, however, that if the issuance of a license is granted, the operators will familiarize themselves with and take the necessary training with regard to self-serve gasoline dispensing, and will comply with all said requirements in the operation of their license, once issued.

Therefore, the application is approved in accordance with the Order appended hereto.

Order

THE COMMISSION HEREBY ORDERS:

1)    That the application of Lowmar Inc. of Summerside R.R.#3, P.E.I. dated 26 July 1993 for an initial petroleum products dealer's license with respect to a proposed self-serve motor fuels outlet to be located at the Village Store in Bedeque be approved in accordance with said application and sworn testimony given by witnesses on behalf of the Applicant.

2)    That a submission be made for the approval of the Commission with respect to the type and location of the equipment to be installed and the planned alterations to the building and site prior to commencing such construction and installation.

3)    That pump nozzle fees be paid and all operating requirements met prior to the issuance of the license.

4)    That the authorization contained herein is valid for a period of four months only.

DATED at CHARLOTTETOWN this 2nd day of NOVEMBER, A.D., 1993.

BY THE COMMISSION:

Chairman

Vice-Chairman

Commissioner