Skyrocketing propane prices cause Indiana to take action
A doubling of propane prices amid bitterly cold temperatures in the past week in Indiana have strained the budgets of the fuel's mostly rural users and led to widespread rationing by suppliers across the state.
Some residents have accused propane dealers of price gouging.
Trying to lessen the pain for the 500,000 Indiana residents who use propane for heating, Gov. Mike Pence on Wednesday declared an energy emergency and took several steps, including easing transport rules for drivers of propane delivery trucks to speed deliveries and adding $5 million to a state fund that helps homeowners pay energy bills.
Danville resident Angela Stiffler said she and her husband ran out of propane to heat their home two weeks ago and were dismayed to see the price to refill their 400-gallon tank rise from $848 to an unaffordable $1,100 in the past several days.
It was only with help of a check from her husband's employer that they were able to afford to refill the tank Wednesday, Stiffler said.
"I'm loving it. We were wearing sweatshirts and staying under blankets," said Stiffler, who home-schools her three children.
Prices of propane have jumped from $2.50 a gallon to $5 this winter in Indiana and elsewhere.
To help the nearly 10 percent of the state's households that rely on propane for heat, the governor extended until March 1 his order that eases limits on driving hours behind the wheel for truckers if they're hauling propane. Pence also ordered regulators to waive fees for overweight trucks on the state's roads if they're carrying propane.
The extra $5 million in the state's Low Income Housing Assistance Fund is earmarked for energy grants. Pence also said the fund's one-time benefit for income-eligible homeowners has been raised from $400 to $550 through March 31.
"We will continue to lean into this effort to deal with the supply shortages," Pence said at a Statehouse news conference.
Propane is used to heat homes by nearly one of every 10 Hoosiers. Propane also is used in many agricultural and industrial operations to run forklifts, feeding operations and transportation fleets. So the soaring price has widespread economic impact across the state, said Scot Imus of the Indiana Propane Gas Association.
One propane dealer compared the shortage to the Arab oil embargo of 1973, when prices shot up for gasoline. This time the fuel in low supply is propane, a liquid gas, and the cause is a prolonged ultra-cold snap bringing subzero temperatures that have settled over the Midwest and sent usage soaring.
"This is unusual," said Imus, who described the supply crisis as a perfect storm.
Coming into winter, propane inventories already were low because of to heavy propane use by Midwestern farmers, who needed more propane than usual to dry their wetter-than-normal corn crop last fall, Imus said. At the same time, more natural gas that's used to make propane is being exported, which has limited domestic supplies, he said.
Imus suggested that the 10 percent of Hoosiers who burn propane for home heating might turn to World War II-style energy rationing until supplies start to improve and prices come down. He suggested shutting off rooms not in use, using blankets and towels around drafty doors and windows, dressing in layers indoors, turning the thermostat down as low as possible and curtailing hot water usage.
But even extreme energy frugality wasn't enough to allow Angie Bertram Smith and her two children to remain in their home outside New Castle near the Blue River.
Smith, who's disabled and depends on disability payments for her income, said she can't afford to refill her 200-gallon propane tank. So on Wednesday, as the temperature in her home dropped to 48 degrees, despite five electric space heaters in use, she and her children, ages 14 and 6, moved to a friend's house.
Smith wasn't happy with her propane dealer for the high prices it was charging and its unwillingness to give her any price break. "I'm not a hateful person or a vindictive person," she said, "but how, when the need is the greatest, how do you raise the price?"
Other propane users are demanding answers to that same question.
Attorney General Greg Zoeller said that since mid-December, 21 people have filed complaints about propane price gouging with his office. Under the energy emergency declared by Pence, the attorney general may seek injunctive relief, consumer restitution and civil penalties in price-gouging cases.
"In the majority of instances, propane prices are being driven by substantial market forces," Zoeller said in a statement. "However, this emergency authority allows my office to thoroughly investigate price gouging complaints to determine if any violations exist."
Supplies of piped gas to home and commercial users haven't been hit by the supply-demand imbalance that's affected propane.
Citizens Energy Group in Indianapolis faces no trouble finding gas supplies despite a sharp increase in consumer use this winter that has led to the highest gas volume sales since 2004, said spokesman Dan Considine.
The average Citizens residential customer is using 35 percent more gas this month compared with January 2013, Considine said, and will see an increase in the January bill of $46 from the same month last year.
Indianapolis Power & Light said it came close to its all-time high electric generation peak-load on Tuesday, reaching 2,850 megawatts at 8 a.m. That was just short of the all-time high of 2,971 megawatts reached on Jan. 16, 2009.
The Associated Press and Muncie Star Press reporter Seth Slabaugh contributed to this story. Call Star reporter Jeff Swiatek at (317) 444-6483. Follow him on Twitter: @JeffSwiatek.