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Propane prices a concern for some in Minnesota

  • Associated Press
  • January 27, 2014 - 7:15 PM

MANKATO, Minn. — Rising propane prices this bitterly cold winter are worrying many rural Minnesota residents who count on the fuel to heat their homes.

KTOE News in Mankato reported Monday that suppliers in the area were quoting propane prices of $4.75 a gallon by the end of last week (http://bit.ly/1b0UQHo ). That's compared to $1.59 a gallon a year ago.

That means a bill of about $1,000 to fill a 200 gallon tank. One customer told KTOE a tank that size only lasts about three weeks in current weather conditions.

Minnesota Commerce Commissioner Mike Rothman said trucks from Minnesota and other states headed to Texas late last week to bring gas back.

"It's still going to be, from what we hear from the propane industry, a tight situation as long as the weather stays cold," Rothman said.

On Monday, Gov. Mark Dayton declared a state of emergency because of a severe shortage of propane and other home heating fuels statewide.

The order calls on the state Division of Homeland Security and Emergency Management to activate the Minnesota Emergency Operations Plan. State agencies also will be directed to help local governments respond to and recover from the emergency, and Minnesota's adjutant general also will be able to order military forces to active duty to provide relief.

Dayton also instructed Minnesota's commerce commissioner to use his consumer protection authority to help guard Minnesota residents from price gouging.

Federal and state lawmakers have been seeking answers in recent weeks for propane price spikes and supply problems. Supplies fell to lower than normal before the cold weather, partly because farmers had to use an unusually large amount to dry grain before storage. The federal government said propane supplies dropped to the lowest recorded level during the second week of January.

The governor plans to meet with propane industry suppliers Tuesday to discuss the shortage and how to improve Minnesota's propane supply.

While Minnesota residents in more urban areas are connected to municipal heating infrastructures, such as natural gas, that's not an option for propane customers who live in more rural settings.

The propane market isn't regulated to the level of more common energy utilities. Iowa U.S. Sen. Chuck Grassley last week asked the Federal Trade Commission for oversight of the propane market, noting wide differences in the price of propane at the two primary storage sites in the U.S. — one in Kansas, the other in Texas.

Dayton and U.S. Sens. Amy Klobuchar and Al Franken have asked the Obama administration to halt exports of propane as an option to alleviate the supply problem.

"With our own crisis happening in Minnesota, and in the Midwest, it just doesn't make any sense that we're not using our own propane to help our own people," Rothman said.

© 2014 Star Tribune