Propane consumers hope for price relief
BY ERIN GALLAGHER Correspondent January 28, 2014 4:58PM
Updated: March 3, 2014 2:39PM
After some saw their monthly home heating bills abruptly skyrocket five-fold to $1,000 or more because of a propane shortage, residents of rural areas in the Southland, such as New Lenox and Manhattan townships, might be in for some relief.
Gov. Pat Quinn on Monday declared a propane supply emergency in Illinois, easing restrictions on propane truck drivers hauling between states. Illinois also lifted limits on how long truck drivers can work within 24 hours, which will let them travel farther to pick up propane, increasing the supply with the expectation of dropping the price.
The cost of propane has been climbing locally for months. Hicksgas, a supplier whose Illinois locations include Braidwood and Kankakee, was charging $1.89 per gallon in October. That had risen to $2.09 as of Jan. 15 and $4.09 just 10 days later. The price jump and the need to use more fuel during the deep freeze have sent bills soaring.
Hicksgas President Shawn Coady said Quinn’s declaration is “not going to hurt. It’s definitely going to help somewhat. We have not had to short-fill any existing customers, but it has been a very interesting struggle to get the gas.”
In Manhattan, Bill Murphy, who gets his propane from a different supplier, said he prepaid for 1,300 gallons at $1.39 per gallon in August. He howled when he heard about the $4.09 price tag.
“I could have paid-as-you-go for $1.44,” he said, “but I thought a nickel a gallon was a lot of money.”
Propane tanks, often 500 or 1,000 gallons, are delivered to homes throughout the winter as needed. It could take 150 to 250 gallons per month to heat an 1,800-square-foot home, depending on weather, thermostat settings and the quality of insulation.
The price spike is due to a confluence of events, involving high demand needed to dry last fall’s wet grain crop for storage, pipeline repairs, and the exporting of 20 percent of U.S. propane — up from 5 percent in 2008 — according to a statement from the National Propane Gas Association.
The extreme weather has interfered with the replenishment of local inventories.
“There is not a shortage of propane, there is a distribution of propane problem,” said Bill Johnson, an agriculture economy professor at Joliet Junior College.
Dana Robinson, the general manager of Heritage FS Inc., headquartered in downstate Gilman, agrees. He said the end result is that suppliers have to get propane from other states, adding to the already rising cost of the commodity, shooting prices over $5 per gallon.
Jerry Dauparas, of Ashland Propane in South Holland, said that for the first time since his mother, Sonja, started the company in 1983, it enacted a clause that allows price changes when a force of nature dictates the need.
He used to get supplies from Morris and Lemont but now is getting propane from Kansas. His cost has risen to more than $5 a gallon.
“This is not something I’ve taken lightly,” Dauparas said. “I’ve lost money in the past, but I can’t lose $2 a gallon. I’ll be out of business within a month.”
Dauparas echoed many others who said no one dreamed prices would jump so high so quickly. Ashland sent customers a letter earlier this month telling them to conserve because he noticed supply starting to get tight.
“How are they going to afford this is my question,” Dauparas said. “Who would have even thought prices would hit this high? You feel for them.”
The U.S. Energy Department says 5.5 million U.S. households heat with propane, mostly in the Midwest and South.
State Sen. Sam McCann, a Carlinville Republican, had asked Quinn to make the emergency declaration.
“Thousands of Illinoisans are struggling to heat their homes, and many business owners and livestock producers don’t know whether they will be able to access or afford necessary supplies of propane,” McCann said in a statement.
According to the Illinois Petroleum Gas Association, 35 to 40 percent of homes in Illinois are heated by propane gas.