Pro-pain: Heating costs rise for propane customers

Wendy Cannon's son saved her a tank load of money.

When she and her husband escaped the Minnesota freeze for a New Zealand vacation as propane prices rose to historic levels, he kept their wood stove burning, preventing the propane backup from kicking on - and a shocking bill for his parents.

"I'm sure we saved $1,000 to $1,500 easily," Cannon said. "I'm an example of somebody who's been really fortunate."

Other rural residents who depend on propane as a primary or secondary heating source haven't been so blessed, enduring a budget-busting spike in the price of the fuel over the past few weeks. Last summer, a gallon cost about $1.60. By late January, it peaked at around $5.50 per gallon at some retailers. Since then, the price has stabilized, but customers are still paying nearly twice as much as they are used to for a bare necessity.

"This has never happened in the history of propane," said Tim Leyh, energy manager at Leaf River Ag Service, a locally owned cooperative that provides propane for 1,800 central Minnesota customers.

The confluence of a rain-soaked corn harvest, extreme cold and pipeline maintenance created a severe shortage in the dead of winter.

While Minnesota is notorious for its bitter temperatures, this season has been remarkably consistent.

"Our January thaw never came," Leyh said.

That persistent homeowner demand followed a late harvest season during which farmers needed far more propane than usual to dry corn.

Joseph Kincade, a corn and sunflower farmer south of Wadena, estimated he used more than twice as much last fall as the previous season.

Meanwhile, a pipeline that transports propane from Canada shut down temporarily, further dwindling supplies. In April, that pipeline - now operating at 50 percent capacity - will switch to a different fuel, which will require suppliers to make up the difference with trains and trucks.

Later this year, Leyh said, Leaf River Ag will add a third 30,000 gallon propane tank to ensure ample supplies next season.

It may be an expensive winter for propane consumers, but "supplies will replenish this summer," Leyh said. Then, customers can once again lock in at low rates to prepare for the heating season.

Propane supplies to northern states will increase this week, potentially driving down prices. On Monday, Enterprise Product Partners, a company that ships propane north from the Gulf of Mexico via a pipeline, said it would immediately release an extra 150,000 barrels and another 350,000 on Thursday.

The move was in response to the Federal Energy Regulatory Commission using its emergency powers to order more propane shipments. It follows aggressive pressure on the Obama administration to take action to mitigate the crisis.

In a filing with the commission, which regulates pipelines, Enterprise said it was willing to continue prioritizing shipments until Feb. 21.

Rural Wadena County resident Mary Jane Schmitz is banking on prices returning to normal levels as she plans to convert her heat source from a fuel-oil/wood stove combination to propane later this year.

"I'm at the age where I can't be burning wood anymore," Schmitz said. "My son's had propane and it was always so reasonable ... We just kind of figure it's going to go down."

Assistance requests spike

At Mahube-Otwa Community Action Partnership in downtown Wadena, 80 to 90 percent of the phone calls in recent weeks have been inquiries about energy assistance, just one of the organization's many programs, said office manager Stacy Carr.

"People are shocked, scared, not knowing they are going to do," Carr said.

The partnership (632-3600) administers the federal Low-Income Home Energy Assistance Program in Wadena County.

Qualifying families can secure grants - amounts vary based on income and family size - for any type of heat source. There are also grants for insulation, furnace repair or replacement and chimney repair.

Assistance is limited. Once families use up their funding for the year, Mahube-Otwa directs them elsewhere. Some area churches provide help with heating bills. So does the Salvation Army.

Wadena County human services offers emergency assistance on a case-by-case basis for families who spend 65 percent or more of income on household bills.
"So far, we've seen some people, but it'll probably hit more later on in the winter when they've used all the other avenues that they can," said Lynda Peterson, human services lead eligibility worker.

Feds, state respond

On Jan. 31, the U.S. Department of Health and Human Services released $450 million in additional funding for the Low Income Home Energy Assistance Program, including $15.8 million for Minnesotans.

Gov. Mark Dayton signed an executive order Monday expanding eligibility for the federally-funded program - to more families.

Those checking into whether they qualify can go to http://tinyurl.com/heataid . Under the new income guidelines, as an example, a household of two earning less than $35,612 a year would qualify for financial aid to pay heating bills.

Dayton earlier increased maximum crisis payments from $500 to $1,000 and declared a "state of peacetime emergency," which temporarily lifted certain transportation requirements to allow expedited propane deliveries. The governor also launched a propane shortage hotline, available from 9 a.m. to 4:30 p.m. daily (800-657-3504).

Wadena's U.S. congressman, DFL Rep. Rick Nolan said Minnesotans facing heating emergencies can find help through his district offices (Brainerd: 454-4078).

"I urge people to contact my office so we can help them understand the kinds of assistance they may be eligible to receive," Nolan said in a news release. "Then we can guide them quickly through the solution that makes the most sense."

Rep. Mark Anderson (R-Lake Shore) said the propane shortage is unfortunate, but could have been prevented with fewer government regulations on the fuel.

"It's more of a cleanup of a bad situation," said Anderson, whose district includes Wadena. "The government was involved in the problem in the first place and now they are coming to the rescue."

He said if Minnesota produced its own propane instead of shipping much of it from Texas, the shortage would have been far more manageable.

The Forum News Service contributed to this report.

SIDEBAR

Thieves nab propane from two ice houses

Fishermen in northern Wadena County last week reported two separate thefts from their ice houses on Blueberry Lake.

The common target: Propane.

In one incident, Andy Eckman lost a hand auger, tackle boxes, a sunflower heater - even his ice house's copper wiring. Three 20-pound propane tanks also disappeared.

"There was probably $100 worth of just propane, not counting tanks," Eckman said. "I wasn't real happy about it.

"I've never locked my fish house until this year and it's the first time I've been broke in to."

Mark Markkula, the other theft victim, said high prices might have prompted someone to steal his 20-pound tank at some point in the past two weeks. Replacing the pilfered unit and filling it will cost him more than $50.

"I've never had no trouble before," Markkula said. "People are pretty honest. I guess I lost out on one tank - no big deal. They're all locked up now."

The theft, he said, probably took less than 15 seconds to complete. "Now, they'd have to bust a padlock and chain."

The Wadena County Sheriff's Office is continuing to investigate the thefts.