News Column

State attempts to help in propane crisis

January 27, 2014

By Barry Adams, The Wisconsin State Journal

Jan. 27 --An energy assistance fund for propane consumers was expanded Monday in an effort by state officials to address the rising price of the fuel used for heating in many rural homes and businesses. Following a meeting at the state Capitol with the leaders of state agencies and representatives from the state and national propane associations, Gov. Scott Walker also directed the Wisconsin Economic Development Authority and Wisconsin Housing and Economic Development Authority to create a combined $8 million guaranteed loan program fund to help state propane dealers expand their lines of credit with wholesalers. On Friday, the Governor directed the state Department of Administration's Division of Energy Services to release $1.5 million in energy assistance. On Monday, an additional $7 million was released to help low-income consumers. "We're being very aggressive in making sure that people, who we believe would be using propane that potentially are facing challenges or economic hardship, know proactively what the state has available," Walker said following his meeting with stakeholders. "We want to make sure no one is in a situation where they don't have enough propane to heat their home." The unusually cold winter comes on the heels of rising propane exports, pipeline issues that closed one pipeline for most of November and December and a wet fall in which farmers harvested a bumper crop of corn but used more propane that normal to dry their crop for storage, according to the U.S. Energy Information Administration . In October, the average Wisconsin price of propane was $1.65 per gallon. On Thursday, the agency reported the state average per gallon at $2.30 , a 39 percent increase. However, since that weekly report, propane jumped to more than $4 at many outlets and was more than $6 per gallon at some locations. Gary France owns a propane supply company in Schofield and is president of the National Propane Gas Association . His board will meet next week and the issue will be among the topics discussed. Unlike natural gas and oil, propane exports are not regulated. In October, according to the EIA, propane exports hit a record high at 408,000 barrels per day. That compares with 189,000 barrels per day in October 2012 and 56,000 barrels per day in October 2008 . "Most of us are small business people and we want to run without a whole lot of government regulation, but at the same time we have to treat this as something that is an energy that keeps people's houses warm and it's not a commodity," France said. "I definitely want to make sure that before excess propane is exported that we're making sure that we keep our people comfortable and with energy." Walker has asked the Federal Department of Energy to review the impact of propane exports on domestic supply and price and has called on the Federal Trade Commission to review the recent spike in prices. He also proposed forming a propane task force that would make recommendations for the state to minimize the potential for future shortages. Over the weekend, U.S. Sen. Tammy Baldwin , a Democrat, wrote to President Barack Obama , asking him to moderate propane exports, something allowed under the Energy Policy and Conservation Act of 1975. "I urge you to take action immediately to moderate exports to ensure American consumers have the fuel they need to keep warm through the winter," Baldwin wrote. "Even if (consumers) are able to find propane for sale, many families may not be able to afford it at these high fuel costs." Francis Lenz , 55, lives between Platteville and Lancaster . He heats his primary residence with wood but has a second unoccupied home that is heated with propane. He filled that 500-gallon tank this summer for $1.45 a gallon. His supplier now charges more than $6 a gallon for propane, but Lenz plans to switch companies next heating season. "I'll check to see who raised their prices the least," Lenz said. "To go to three or four dollars a gallon is not reasonable, but when you start talking six or seven, that's uncalled for." ___ (c)2014 The Wisconsin State Journal (Madison, Wis.) Visit The Wisconsin State Journal (Madison, Wis.) at Distributed by MCT Information Services

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Source: Wisconsin State Journal (Madison, WI)

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