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Propane shortage hits northeast Indiana

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By the numbers

*Estimated 14 million households using propane

*Stocks fell to 11.5 million barrels as of Jan. 10

*A gallon of residential propane in the Midwest costs $2.39 last week

Source: Reuters and The Energy Information Administration

Shortage leads to drastic price increase

Friday, January 24, 2014 - 12:01 am

An energy emergency has hit residents of northeast Indiana, and area suppliers are urging people to conserve.

To try to help residents, many Midwestern states have ordered a temporary change to the “hours of service rule” to allow propane truck drivers to work extended hours to help curb demand. Delivery is especially important for these homes, which have their own propane storage tanks and are not connected to pipelines. However, until the shortage is addressed, deliveries for many companies are limited due to a low supply.

So, what can propane customers do? Save gas and bundle up.

Propane businesses are encouraging customers to find ways to conserve including wearing layers at home and using safe alternate sources of heat such as electric heaters.

But with the recent cold spells hitting the area, conserving propane can be quite difficult for customers.

Allen County resident Lee Cook lives out in the country near Poe and is a propane customer. While he often uses wood as a backup, he primarily uses propane for heat. One day last week - after the last polar vortex - he checked the tank to see the propane level, and saw it was low, at about 30 percent.

“When I called there they asked me how much propane I had. Usually, if you're really low they will make it a priority and they will fill it. I had 30 percent, which is still pretty good. They told me it'd be about a week due to weather. I asked for 300 gallons and they came and delivered it a week later and that was it,” he said.

While Cook was placed on a waiting list for the delivery, he feels he was still properly taken care of and waiting a week wasn't too bad. But, what he was most pleased about, besides the full tank of propane, was the notification from his propane provider Ag Plus.

“Two days ago I heard about the storage and I wasn't even aware of it. Then just yesterday the company I use sent a nice letter explaining the reasons behind the shortage. They've always been a good company. They keep their customer well informed,” he said.

Currently, some companies are refusing to accept new customers while other companies are out of propane altogether.

Reuters reports that some 14 million households use the gas to heat homes, especially in states such as Michigan and Ohio.

According to the Energy Information Administration, propane stocks fell to 11.5 million barrels as of Jan. 10, half of what they were a year earlier and the lowest for this time of the year the agency began collecting data in 1993.

EIA reports that a gallon of residents propane in the Midwest costs $2.39 last week, up from $1.73 the year before. Current inventories can supply 24 days, compared to 42 days last year.

The reported price increase is the highest for the region since at least 1990.

Ag Plus supplies propane for Allen County and other surrounding counties and has told customers that it cannot guarantee a full tank for customers if propane is not available. At this time, customers reporting that a low tank of 15 percent or less will be put on a delivery waiting list and addressed on a first-come-first-served basis.

So why is this shortage happening now? Experts report there are several reasons for the shortage including severe winter weather, record-low temperatures, a disabled Midwestern pipeline and higher than average use due to late, wet and record corn harvest last year.

Reports say the Cochin pipeline, which travels through North Dakota, Minnesota, Iowa, Illinois, Indiana, Michigan and Ohio, had a major impact when it was closed for maintenance in December.

Until the supply catches up with demand, customers will have to find alternative ways to keep warm.