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Iowa ag officials advocating summer fill ups for propane users

Published: Wednesday, July 30, 2014 10:34 a.m. CDT • Updated: Wednesday, July 30, 2014 10:43 a.m. CDT
(Ty Rushing/Daily News)
State officials are advising propane consumers to go for a summer fill up to avoid potential winter price hikes. Key Cooperative in Newton offers consumers a chance to purchase bulk quantities of the gas.

Winter is coming, and after last year’s brutal bout with Mother Nature, Iowa agriculture officials are advising consumers to fill up their propane tanks early.

Iowa Secretary of Agriculture Bill Northey is one of those officials who has been at the forefront of encouraging citizens to go for a summer fill on propane tanks.

“Last fall and winter the price of propane jumped sharply to more than $5 per gallon in some locations as a number of events severely tested the capacity of the current propane delivery system and infrastructure,” Northey said. “Such a dramatic price increase seems unlikely this year, but it is important for propane users to be prepared.”

Newton’s Key Cooperative location is currently selling propane for $1.59 per gallon. Lynn Sheet, the co-op’s energy department manager, said he’s been in the industry for 36 years, and last winter was a perfect storm for a price hike.

Sheet said when Kinder Morgan, an American energy conglomerate, decided to trim supply from its Cochin Propane to the Midwest it affected a number of states. Just about 13 percent of Iowa’s propane came from that pipeline. This coupled with record amounts of corn drying caused issues for consumers.

“That did cause shortages of propane and then the price just skyrocketed. Fortunately … it didn’t affect 95 percent of our customers,” Sheet said.

Key chose to evenly distribute its product to customers to ensure their homes were heated, Sheet said.

“The way I view it, our obligation is to make sure the customers stay warm and stay with fuel, and not that they have an absolutely fuel tank. So we took what we had and stretched it out among the whole group rather than having some people that were completely full and other people didn’t have propane,” Sheet said.

He also said they offered payment plans and lowered the required minimum for delivery.

“We had very, very few customers that paid the higher price, and a lot of those (that did) were because they chose not to contract. It worked for them in years past, but they got caught that last winter,” Sheet said.

According to a 2009 statistic from the U.S. Energy Information Administration, the average propane consuming household in Iowa uses 867 gallons annually. This is almost double the national average of 464 gallons.

Sheet also wants to caution Key customers who already have fill plans in place not to panic, because their supplies have already been allocated. He said only customers without prior arrangements will be at risk of paying a higher prices if another extreme cold season takes place.

Although no one knows how this upcoming winter will turn out, many are proceeding with caution after last year. Iowa Propane Gas Association Executive Director Deb Groom is advising consumers to reach out to their supplier now if they want to avoid potential price hikes later.

“Right now, prices are pretty good. We would like to have the consumers get with their propane supplier and lock in prices and get their summer fill,” Groom said.

Senior staff writer Ty Rushing may be contacted at (641) 792-3121, ext. 6532, or at trushing@newtondailynews.com.

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