Tuesday, January 28, 2014

Legislators unveil plan for relief from surge in propane prices

By Caitlin Rydinsky 

As Illinoisans face a propane shortage, lawmakers propose a plan to help some businesses and families pay their growing bills.

State Sen. Sam McCann, a Republican from Carlinville, and Sen. Bill Haine, a Democrat from Alton, are proposing legislation to help those who are unable to afford the price of propane from December 2013 to March 2014. The plan would allow more families to apply for the Low Income Home Energy Assistance Program (LIHEAP) by temporarily loosening requirements. They also are looking to establish a $20 million short-term loan program with the Illinois Finance Authority for small businesses, propane distributors and farmers.

“The big concern for everybody right now is $900 to $1,000 is a lot to spend on propane, but I’m worried right now if I don’t buy it, I won’t be able to get it from anywhere,” said Arend Poe, who lives in a rural area between Stewardson and Charleston. Poe said the last time he filled his tank, he was only able get 150 gallons, which will last him a month. He normally fills his 500-gallon tank to 400 gallons. His supplier, Effingham Equity, gave him a smaller amount because they are experiencing a shortage. They also confirmed they are not accepting new customers.

“Price increases have been quite dramatic, and it is just the market responding to the tight supply and demand,” said Harry Cooney, the manager of energy and customer risk management at GrowMark, which supplies propane to businesses and farmers. Typically, the price is about $2 per gallon during the winter, but due to the shortage it has spiked to around $5 a gallon. Lawmakers who are proposing relief are looking to increase LIHEAP funding by $10 million. However, supporters of the idea do not know yet where the money will come from. As part of the plan, the group says the eligibility requirements for LIHEAP would be temporarily raised by $10,000, making a family of four with a yearly income of $44,000 eligible.

As the prices have spiked, families already eligible for LIHEAP assistance are having trouble covering their heating costs. Mindy Brown, the LIHEAP coordinator for Embarras River Basin Agency, which provides assistance to families in eastern Illinois, said that this past week, the agency has assisted 42 families. Even with LIHEAP assistance, which allows up to $1,000 a month, she says households are getting behind on their bills.

Multiple factors contributed to the shortage of propane over the past year, such as pipeline maintenance, exporting propane during milder past winters and the 300 million gallons of propane used to dry crops this past wet harvest season. The recent cold weather that Illinois has experienced has made it worse. The U.S. Energy Information Administration projected earlier this year that prices for propane and several other natural resources would increase. The price of propane was estimated to increase from last year’s $1.74 a gallon to $2.10 in the Midwest, but because of the cold weather, it has gone higher. “If you bring all those together, along with what weather people are calling ‘the polar vortex,' which is bitterly, bitterly cold weather, and the result is individuals and families who are having to make very real decisions about whether or not they can adequately heat their homes in the coming days or weeks ahead,” said Sen. Dale Righter, a Republican from Mattoon.

On Monday, Gov. Pat Quinn declared a propane emergency, which has allowed truck drivers within the state to travel longer distances, waived requirements for them to apply for additional licenses while driving through multiple states to bring propane to Illinois and temporarily exempted the tax for out-of state truck drivers within Illinois. Quinn has not taken a stance on the plan from lawmakers. “We are carefully reviewing the proposal as a way to alleviate the crisis,” said Quinn’s spokesman, Dave Blanchette.

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