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Propane Dealers Urge Customers to Fill Tanks This Summer

Friday, September 05, 2014
Montpelier — Northeast propane dealers are urging customers to fill their tanks this summer to help prevent shortages linked to last winter’s record high prices.

Residential propane prices have dropped from the more than $4 per gallon peak last winter, but the infrastructure challenges in the region that drove those shortages remain, industry representatives say.

Matt Cota, executive director of the Vermont Fuel Dealers Association, said last year’s price spikes are not likely to happen again because dealers and customers are being proactive.

He said Northeast propane dealers are better stocked with propane supplies than they were last year. Dealers are also urging customers to arrange for pricing and deliveries ahead of the heating season and make sure their homes are as energy-efficient as possible.

“That is where you can really have an advantage and alleviate some of the pressure going into the winter,” Cota said.

He said the price of all heating fuels has dropped in recent months as the U.S. dollar grew stronger.

The price of propane dropped 11 percent between July and August this year, according to the Vermont Department of Public Service. The average residential price with discounts and credits is currently $2.81 per gallon.

Propane prices spiked last year after Midwest farmers used the gas to dry crops after a wet fall and ahead of a cold winter. The shortage and high demand caused prices to reach record highs across the county. In addition, industry representatives said there were inadequate locations to store propane, forcing dealers to drive long distances to find supplies.

This year’s crop harvest is still underway and the effect of drying on propane supplies is uncertain, industry representatives say. But dealers’ top concern this year is finding a location to store large amounts of propane in the northeast.

Joe Rose, president of the Propane Gas Association of New England, said most propane marketers do not have enough storage on site to keep prices stable all year. He said the average marketer’s out-of-ground storage tanks last about three to five days during the winter.

He said some northeast marketers this summer have added storage tanks, “but not enough to make a huge difference.”

Rose said there are only two large storage facilities in the region — the Enterprise Products facility in Providence, R.I, and the Sea-3 Inc. facility in Newington, N.H. The Providence facility is still empty, he said.

The industry has been pushing for years to re-open a propane storage facility in New York that Rose said was closed in the late 1980s for economic reasons.

Project proponents say reopening the Finger Lakes salt cavern would provide the northeast with enough propane supplies to avoid shortages.

However, Rose said New York residents have safety and environmental concerns and the project does not have the support of Gov. Andrew Cuomo.

“Everybody wants cheap energy,” he said. “But nobody wants it running through their town or stored in their town.”

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