Propane policies make for hot debate at Legislature

This time last year, propane tanks across rural Minnesota were running dangerously low as a heating fuel shortage struck in the middle of a frigid polar vortex.

It's warmer this year, indoors and out. Fuel prices are low, propane stocks are high and most of winter's fury has bypassed Minnesota on its way to Boston.

Now is the perfect time, some state legislators say, to prepare for and prevent future shortages. A House jobs and energy committee took a road trip to Willmar, Minn., this past week to talk about a measure designed to ensure that Minnesota has propane to spare — next time.

"A year ago today, it was 11 below in Minnesota and I think the high was 3 below. That was the kind of winter we had. We're going to have it again someday," said the bill's sponsor, newly elected Republican Rep. Dave Baker of Willmar. "We will have these horrible winters and this [legislation] will help families down the road."

The state has about 250,000 propane-heated homes. During the winter of 2013-14, around the time it was warmer on the surface of Mars than in some parts of northern Minnesota, a major propane supply pipeline shut down, just as shivering residents and farmers trying to dry last year's bumper corn harvest were putting unprecedented demands on shaky supply lines.

Propane jumped $2 a gallon in a week, rising to $4.60 per gallon by the end of December.

Baker's bill aims to ensure that Minnesota always has plenty of propane on hand — at the lowest price possible — by allowing the state to pre-order up to $5 million worth of propane in the summer to lock in lower prices. It would waive the state sales tax on purchases of large propane storage tanks of 100 gallons or more; take $300,000 out of the state's solar heating fund to use for propane heating expenses instead, and allow sellers to sell to thousands more customers before they come under regulatory scrutiny by the state Public Utilities Commission.

According to the Minnesota Department of Commerce, Midwest propane inventory is double the amount on hand last year.

Right now, Minnesota is "swimming in propane," said state Rep. Melissa Hortman, DFL-Brooklyn Park. "People were preparing, they were ramping up the storage, and they're where they ought to be."

Tax breaks to buy large storage tanks won't help low-income Minnesotans, who tend to rent their tanks, and will only benefit "people who don't need any economic help," Hortman said. Commerce officials say the department already has the authority to buy propane in the summer.

"The Commerce Department supports efforts to promote summer fills and low prices, as well as other options that could help ensure consumers interests are protected," Commerce Commissioner Mike Rothman said.

For the thousands of Minnesotans who need help paying their heating bills, this winter has been kinder than last. Propane prices hovered around $1.80 a gallon last week. The low-income heating assistance program Heartland Community Action Agency in Willmar is helping about 600 households in a three-county area.

Jennifer Brooks• 612-673-4008