Propane fix in the works

ST. PAUL - The low temperature in Willmar a year ago Monday was 11 below zero, with the high reaching 3 above.
The frigid temperatures came during a near record-cold winter that drained many Minnesotans’ propane supplies, which led to a lot of talk about record-high propane costs.
This year, Monday’s high could get near freezing, with the morning low higher than last year’s high. But talk in Willmar still will be about propane.
Monday is when the Minnesota House Job Growth and Energy Affordability Policy and Finance Committee takes up its first bill designed to ensure that propane remains available, even during a polar vortex winter like a year ago.
“We want to make sure that rural citizens of Minnesota will not be exposed to the propane disaster we had last year,” Rep. Dave Baker, R-Willmar, said.
The committee, led by Rep. Pat Garofalo, R-Farmington, meets in Willmar Monday and is expected to approve a bill by Baker to encourage Minnesotans to sign contracts for propane well before winter and for residents, farmers and businesses to expand gas storage.
“It’s not a fix-all,” the rookie lawmaker said about his first bill, but he added that he hopes it addresses some of the concerns he heard on the campaign trail last year.
The proposal would take several steps to improve the propane situation, including:
• Providing $5 million a year to allow poor Minnesotans, mostly in rural areas, to order propane and lock in a lower price during in the summer. The federal government would return money to the state in the fall as part of a Washington-funded heating assistance program.
• Removing sales tax from residential, farm and business customers who buy larger propane tanks in the next two years. More storage near where propane is used means customers can buy more gas before cold weather to lock in lower rates.
• Allowing gas sellers to serve 5,000 customers before state Public Utility Commission regulation is required (instead of the current 2,000). Baker said that would help small gas suppliers avoid the high costs of PUC regulation.
• Conducting a study to see how the measures work and report back to legislators so they can determine what permanent actions to take.
Sen. Lyle Koenen, D-Clara City, said that he has a bill to deal with sales tax credits for propane tanks of at least 100 gallons, similar to the Baker proposal. However, he said, he expects more propane-related legislation to surface.
Propane mostly is used by rural residents to heat their homes and farmers for drying crops. Many Minnesotans using the gas are poor and rely on government heating assistance.
Natural gas is more affordable, Baker said, but not enough homes outside of cities have access to it.
Last year’s propane woes are blamed on a combination of problems, with frigid weather the worst culprit. However, the issue began in the fall when farmers’ crops were damper than usual and they needed more gas for drying.
Another issue was a major pipeline bringing propane to Minnesota was switched away from that fuel.
When propane shortages emerged, prices spiked at record levels.
There actually was plenty of propane, it just was in parts of the country where it was not needed as desperately as the Upper Midwest. Upon Midwestern governors’ requests, the Texas governor allowed more propane to be shipped north.
Since then, many firms in the propane industry have added storage.