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Gov. Snyder plans to extend propane shortage declaration

January 31, 2014
JOHN PEPIN - Journal Staff Writer (jpepin@miningjournal.net) , The Mining Journal

MARQUETTE - Gov. Rick Snyder was expected to extend a propane emergency declaration today, urging state agencies to reach out to consumers affected by the shortage which is covering more than 30 states and has driven up the average propane price in Michigan to 75 percent above last year.

"The state is working diligently to help improve the propane shortage situation," Snyder said in a press release. "The health and safety of our residents is most important, and I've directed several relevant agencies to work with those who have been affected by the shortage and offer assistance and available resources until propane levels are restored."

After a recent maintenance shut-down, a Wisconsin fuel facility reopened and supplies again began flowing to a propane facility in Rapid River this week, which has helped to alleviate the shortage some in the Upper Peninsula, where state officials said the emergency is most pronounced in Michigan.

Article Photos

Pat Connolly of the Harvey Oil Co. fills a propane tank in Marquette County this week. The state’s propane emergency declaration was expected to be extended today by Gov. Rick Snyder until Feb. 11. (Journal photo by Adelle Whitefoot)

Inventories in the region are 46 percent lower than last year.

Roughly 321,000 - about 8 percent - of the state's households heat their homes with propane, according to the U.S. Energy Information Administration.

Michigan Public Service Commission Chairman John Quackenbush said several factors are driving the shortage including record low temperatures, heavy snowfall, poor driving conditions and pipeline issues - problems the propane industry has faced before.

"The thing that's unique this time is the confluence of circumstances," Quackenbush said. "It's been relentless, there hasn't been a let up."

The shortage has been felt across the Midwest and Great Lakes states into New England, driving up prices to record highs in some areas.

Steve Arwood, director of Licensing and Regulatory Affairs for the state, said the average propane cost in Michigan Thursday was $3.64 a gallon, which is 75 percent over last year's average at this time of $2.04.

A regional pricing survey found a high price of $5.60 per gallon. Arwood said some anecdotal reports have indicated prices over $6 in some areas.

"I think supply and demand is at work here," Quackenbush said. "Supply is very tight."

Michigan Attorney General Bill Schuette is monitoring the situation, "watching very carefully" for price gouging, Arwood said. Michigan State Police homeland security officials said they have found no reports of heat shut off to homes across the state.

As of Jan. 17, U.S. propane inventories were below 5-year average levels. Michigan uses more propane than any other state.

Quackenbush said efforts were being made to try to expedite shipments from two main hubs in Conway, Kansas and Mont Belvieu, Texas.

More than 30 states have declared propane emergencies. Snyder's order today extends an exemption within the state for motor carriers and drivers transporting propane and heating oil from hours-of-service regulations and requirements until Feb. 11.

Snyder had also issued similar orders earlier this month and in December.

State officials are requesting extension of an emergency declaration for Midwest states by the Federal Motor Carrier Safety Administration past Feb. 11 to allow continuation of the state's waivers for transporting propane.

Officials are also asking the U.S. Department of Transportation to coordinate weight restriction exemptions between states to ensure interstate propane transport is not unnecessarily impeded.

Quackenbush said state officials said they have been working with the propane industry to try to resolve supply chain issues, including truck, rail and pipeline delivery.

Arwood said, "We're very optimistic this supply issue is going to ease."

However, the propane shortage is expected to disappear gradually over several weeks.

Given continuing low temperatures and the propane shortage, Snyder said he is concerned about seniors and people with disabilities at home and in nursing homes.

"It's important for older adults to take extra precautions to keep warm, avoid carbon monoxide poisoning and to seek assistance for heating their homes," a Snyder news release stated.

Snyder said multiple state agencies have mobilized to assist state residents, particularly those susceptible to the low temperatures.

The Michigan Department of Treasury is processing Home Heating Credit available to low-income utility customers in Michigan.

The Michigan Public Service Commission announced $89 million in grants to 14 organizations to help low-income customers with energy assistance for this winter.

David Ackerly, a spokesman for the Michigan Department of Human Services, suggested residents seeking assistance dial 211 to obtain information about the closest Michigan Energy Assistance Program grantees, who can provide qualifying people with direct bill assistance.

"We're there to help," Ackerly said.

Customers may also apply for State Emergency Relief at local DHS offices or online by selecting the "benefits" link at www.mibridges.michigan.gov.

For additional information, visit the Michigan Public Service Commission website at www.michigan.gov/mpsc.

John Pepin can be reached at 906-228-2500, ext. 206.

 
 

 

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