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Propane shortages prompting state officials to act

Wednesday - 1/29/2014, 10:40pm  ET

Associated Press

LOUISVILLE, Ky. (AP) -- Supply problems in several states where propane is a crucial heating source have prompted governors and other officials to take action against vendors, investigate claims of price gouging and increase aid to low-income customers.


"The industry as a whole should have been prepared for this," Missouri state Sen. Mike Parson said Wednesday. Parson is urging the U.S. Justice Department to investigate rising prices in his state. "We should be able to figure out what our supply and demand is."








"Our sense is that it's slowly moving in a positive direction," said Mollie O'Dell, a spokeswoman for the National Propane Gas Association. "A lot of these immediate fixes take a little bit of time to get moving."

The shortage is forcing some residents on an American Indian reservation in the Dakotas into public shelters to keep warm. Standing Rock Sioux Tribe Chairman Dave Archambault II said about 90 percent of the reservation's 5,500 homes are heated with propane.

"Many families don't have enough resources to heat their homes when propane costs rise above $3.50" a gallon, Archambault said, adding that the price has been about $4. "When the price of propane reaches $6 there's going to be a dire need -- life or death."

The Missouri resolution sponsored by Parson would also ask the Justice Department to look into the price disparity between propane storage facilities and the "inaccessibility of propane to the citizens of Missouri." A Senate panel was expected to vote on the resolution next week.


"From a customer-relations standpoint it has been absolutely devastating," he said. "We are in a particularly poor county and our customers just can't afford the prices."


The Kentucky propane supplier, UPG, sent a Jan. 21 letter to its commercial customers in several states saying it was ceasing deliveries, but customers could acquire a waiver to seek propane from another source. When business owners complained that they weren't able to reach the company to get a waiver, the Attorney General's office intervened and sought a court order.

"It baffles me why a company would not put the needs of its customers first, especially with the recent weather conditions we've been experiencing in Kentucky," Attorney General Jack Conway said in a release.


