Propane users asked to conserve
Thursday, January 30, 2014 10:00 AM
Indiana residents and companies dependent on propane are being asked to conserve as supply continues to drop across the state and country.
The shortage has caused delivery bills to soar and for Indiana Gov. Mike Pence to announce an energy emergency until March 1.
The action would extend travel waivers to maintain the flow of propane to homeowners and farmers. It also will add $5 million in heating assistance for low-income residents.
Pence also asked farmers and others to return unused propane to their suppliers. The governor estimated that roughly 500,000 Indiana residents rely on propane to heat their homes.
Pence's actions come on the heels of legislative efforts to alleviate widespread problems. The Indiana Senate gave initial approval to lifting the sales tax on propane sales Tuesday.
Prices on propane have skyrocketed amid the shortage. Some Hoosier customers have reported seeing prices double from $2.50 a gallon to $5 a gallon.
The national average price for a gallon of propane spiked this week to a little over $4, up from $2.96 from the previous week, according to the U.S. Energy Information Association.
Scot Imus, executive director of the Indiana Propane Gas Association, said the shortage has been created by higher usage by farmers in the fall to dry crops, pipeline disruptions, extreme winter weather and increased propane exports.
"I've talked to members that have been in the business 40 years, and nobody has seen it this bad," Imus said. "The industry is going through incredible lengths to get products."
Warren Auxier, of Auxier Gas in Hanover, said the impact varies from supplier to supplier, adding that his company has managed to continue buying from its primary suppliers, which has helped keep the cost increases minimal.
"So far, through contracts and relationships we've had, we're purchasing through normal supply points," he said,
But the company has tweaked its delivery process to ration its own supply, Auxier said, by decreasing its will-call deliveries by about 25 percent.
"Normally we would deliver 200 gallons, and we've dropped that to a 150 maximum," he said.
In addition, customers on the company's monthly route delivery have seen a 13 percent increase in cost on the gallon.
"We're asking our customers to work with us," he said.
Depending on the weather, Auxier said propane providers could see an additional crunch with supply and rate increases. A typical household could easily use 150 gallons of propane a month in these cold conditions, he said.
"It's been demanding," he said.
The Associated Press contributed to this report.