Propane Cost Midwesterners $561 Million More Last Winter

Propane Cost Midwesterners $561 Million More Last Winter

Joint Economic Committee report quantifies costs of last winter's propane supply issues

Midwestern families spent $561 million more on propane during the winter of 2013-14 when compared to a five-year average of the previous five winters, a report released this month by the U.S. Congress Joint Economic Committee has found.

Propane costs doubled to more than $4 per gallon last winter as severely cold weather, transportation issues and a wet fall pressured supplies in the Midwest.

Related: Lawmakers Request Hearing on Propane Shortage Issues

Joint Economic Committee report quantifies costs of last winter's propane supply issues

Rural areas and homes were particularly affected, the report notes, as 91.7% of houses heated with propane are in the rural Midwest and unlikely to have access to a secondary heating source. Nearly half of households using propane for heating earn less than $50,000 as of 2012, it said.

Farmers also felt the pinch as animal buildings and grain drying equipment often operate on propane.

To minimize future price spikes, the report outlined objectives that have been planned or implemented. These include publishing more information on propane supplies and encouraging weekly price reporting, as well as putting the governors of affected states on notice if fuel supplies (including propane) have fallen below five-year averages for several weeks. The Energy Information Administration has agreed to move forward with both objectives.

Related: State Governments, Suppliers Convene on Plans to Avoid Future Propane Shortages

Further, the report outlines for plans on a national energy efficiency strategy that will help businesses and consumers cut energy costs. This includes updating building codes and providing funding for construction workers to learn more about energy efficient building technologies.

Propane Cost Midwesterners $561 Million More Last Winter

The objectives also include considering an increase in energy assistance funds to families when price spikes occur, and allowing customers to purchase propane with assistance funds in the summer when prices are lower.

Related: Farmers May Avoid Replay of Last Year's Propane Issues

Lawmakers this summer passed a bill to allow state governors more freedom when extending a state of emergency due to low home heating fuel levels. This allows motor carriers to operate beyond federal regulations and deliver more heating oil where it is needed. The bill also signed off on the EIA requirement to notify governors of short supplies.

View the full report, Propane Price Spikes and Their impact on the Economy.

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