REGIONAL- When Dale Moore, of Tower, phoned to have his propane tank filled last week he was in for a surprise. The cost of propane had more than doubled from the $2.15 he paid to fill his tank in October. The colder-than-average winter had burned through his winter supply much quicker than normal. But now, facing propane priced at almost $5 a gallon, Moore, who lives on a fixed income, is keeping his house cooler, and relying on electric space heaters to keep his small mobile home heated.

For Moore, and other local residents who rely on Low-Income Heating Assistance to get their winter fuel bills paid, this winter is going to be a challenge. Minnesota has approved additional $1,000 crisis payments for LIHEAP residents who heat with propane or fuel oil, but at current prices, that only buys 200 gallons.

Moore said it is bad enough suffering through this winter’s cold weather, but now the cost of heating is making the winter even worse.

Triple trouble

A wet fall, cold winter, and disrupted supply chain all contributed to the unprecedented spike in prices, according to Al Killoran, manager at Como Oil & Propane in Tower.

“Pipelines that used to be used to ship propane are now being used for other products,” he said. “The Cochin pipeline, up to last year, supplied 40 percent of the propane in Minnesota, but this line has been shut down.” This is creating trouble for the estimated 230,000 homes and businesses in Minnesota that heat with propane.

Propane is now mostly coming into Minnesota by rail and tanker truck, Killoran said, but winter weather conditions have slowed transport. Como has been trucking in propane from over a dozen different locations.

“All our propane companies have been affected,” he said. “And some smaller companies have recently gone out of business because they can’t afford to buy propane at these high prices.”

A wet fall meant higher than normal demand for propane that is used to dry crops before they get put into storage. And a colder-than-normal winter stretching across most of the Midwest and northeast has made for higher demand nationwide.

There is still plenty of propane available, Killoran said. The problem is getting it to where it is needed.

“The crux of the problem right now is getting the propane from “Point A to Point B.”

The two major hubs for shipping out propane are in Kansas and Texas, where it is stored in large underground caverns.

Another issue reflected in the price hike is the fact that propane exports, unlike petroleum, are not regulated. Suppliers, Killoran said, will export propane if they can get a higher price than they can domestically. Right now the United States is a net exporter of propane.

How to cope

The price rise, from all accounts, is only temporary.

Terri Muhvich, of Range LP in Ely, said the price per gallon dropped 50 cents overnight on Jan. 28. But no one is certain, she said, when prices will get closer to normal.

“We field calls daily from worried customers concerned for both pricing and wanting to make sure their tanks are full,” said said. “Hopefully pricing will be on a downhill slide…but it could go either way at this point with subzero temps not looking to go away anytime soon.”

Killoran said the industry expects prices to drop back to more normal levels as soon as the winter cold moderates.

The Minnesota Propane Association and local dealers have these tips on reducing propane usage:

‰Turn down your thermostat 5-10 degrees.

‰If you have a propane hot water heater, reduce hot water usage.

‰Do not heat any rooms or building that do not have to be heated.

‰Keep vents and air returns clear of obstructions such as furniture and free from dust and pet hair.

‰Make sure your furnace filters are clean. A clean and properly-maintained furnace will run more efficiently.

‰Have a backup source of heat such as electric space heaters or properly-installed wood stove.

‰Reduce kitchen stove use if you have a propane stove.

‰Avoid calling your propane supplier until your gauge shows you are below 25 percent.

In the meantime, propane retailers have eased rules on minimum orders, allowing customers to receive only partial fill-ups and wait until the price stabilizes to otherwise fill their tanks. Como Customers with pre-pay or pre-buy contracts can still ask to have their tanks filled, but otherwise, during normal deliveries, tanks will only be filled to 50 percent, Killoran said.

Customers who signed up for either pre-pay or pre-buy programs last summer are mostly sheltered from the rate hike, unless they burn through their allotted number of gallons.

“We’ve only had one or two winters in the past 20 years when the actual wintertime price was lower than the pre-buy price,” said Killoran.

Killoran urged area propane users to look into their local propane companies pre-pay or pre-buy programs, which are offered over the summer. These programs allow customers to lock in a rate for the upcoming heating season, though even pre-buy customers may be in for a rate increase this year. With the below-normal winter temperatures, some customers will be burning through more than their normal number of gallons this winter, and will have to purchase additional gallons at the market rate.

The propane industry is also responding to the crisis, and is requesting legislative assistance on both a statewide and nationwide basis. Minnesota Gov. Mark Dayton recently issued an emergency order declaring a “Peacetime State of Emergency” in response to the severe shortage of propane and other home heating fuels. Actions taken include persuading the federal and other state governments to waive shipping restrictions to increase the transport of propane from Texas to Minnesota, adding additional funding to the LIHEAP program, and joining members of the Minnesota Congressional delegation in petitioning President Obama for additional emergency assistance and to halt propane exports.