11:35 AM CDT on Tuesday, July 4, 2006

Associated Press

BATON ROUGE -- Gov. Kathleen Blanco has signed into law a price control provision to make sure Louisiana motorists don't have an even higher price at the pump because of new alternative fuel requirements.

The bill is designed to make sure ethanol-blended gasoline will not have to be sold in the state if it would increase gasoline prices.

In the legislative session that ended last month, lawmakers approved a law requiring the plant-based fuels to be sold once production of the fuels in Louisiana reaches certain benchmarks. But critics said the new law would significantly boost prices.

So, lawmakers in the final hours of the session approved a second measure that sets up a trigger: the alternative fuels will not have to be sold until the price of Louisiana-manufactured ethanol has stayed below the average wholesale price of regular gasoline for 60 days. Blanco signed that price control provision late last week.

A three-member committee with a representative of the Louisiana Farm Bureau Federation, the Louisiana Oil Marketers and Convenience Store Association, and a college faculty member will meet every three months to compile numbers and determine whether the state has reached the averages needed for the mandate to begin.

A federal subsidy to lower the price of ethanol will be included in the consideration of the ethanol price.

Lawmakers said the compromise will ensure consumer protection while encouraging a burgeoning ethanol and alternative fuel industry in Louisiana to help farmers find new outlets for their crops.

Under the alternative fuels law, two percent of the total gasoline sold in Louisiana will have to be agriculture-based when ethanol production in the state reaches 50 million gallons annually, biodiesel production reaches 10 million gallons each year or production of another alternative fuel reaches 20 million gallons a year.

Several plans to build ethanol plants in Louisiana are on the table.

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Senate Bill 454 can be found at www.legis.state.la.us

(Copyright 2006 by The Associated Press. All Rights Reserved.)