Big jump in propane prices has local people in a quandary

Sunday, March 16, 2003

A hefty hike in propane prices has people choosing between medications and home heating.

The price has climbed from 65 cents per gallon to a whopping $1.79 in just eight months.

Propane producers, distributors, and retailers are not regulated by any government agency.

"Propane prices are set by the market," said Robert Booth, manager of the Gas and Water Section of the Arkansas Public Service Commission. "Producers can charge what they want."

Help is available for consumers who can't afford hefty fill-up fees if they qualify for government-funded programs.

The Low Income Home Energy Assistance Program (LIHEAP) has two assistance programs, a "regular" and a "crisis" program. Applicants must meet income guidelines to qualify.

The "regular" program is available January, February, and March of each year.

The "crisis" program has ample funds to distribute through the end of the fiscal year, which is September.

"Crisis" criteria requires that a person's propane tank be at 10 percent capacity or less, or that the customer has received a shut-off notice for natural gas or electricity.

Jerrie Dutton, with the Office of Human Concern, says people can receive "same day" approval for either program if they submit all the documents required.

"If I get exactly what I need, I can make a determination the same day," Dutton said.

Applications for LIHEAP assistance are available at the Department of Human Services on Hailey Road in Berryville, Wildflower Christian Chapel, the United Methodist Church in Berryville, and the Flint Street Food Bank in Eureka Springs.

People who don't meet low income guidelines may qualify for energy assistance through local organizations. This money is limited, but people in need can call the Department of Human Services to find out more. That number is (479) 636-7301.

Natural gas customers are faring better than their propane powered neighbors. They have been spared huge hikes.

The price has risen, says Charles Stevens, vice president of Arkansas Western Gas, but consumers won't see a difference on their bills, at least for now.

"Yes, natural gas prices went up in March," Stevens confirmed. "We had a big jump from February, based on the futures market, but customers won't see a price increase."

Stevens said AWG "hedged," entering into a transaction at a fixed priced that was lower than the current market price.

Plus, natural gas is purchased in the summer months when prices are low, and stored in underground tanks for winter use.

"We do what is called a "purchase gas adjustment" twice a year," explained Stevens. "That way, we are able to hold the price through the winter.

"Customers won't see an immediate increase," Stevens continued. "But they will see higher prices in the summer."

Stevens said he expects the market to stabilize, but at higher prices.

AWG, along with other natural gas suppliers, is regulated by the Arkansas Public Service Commission.

Booth, with APSC, said natural gas suppliers don't make a profit on their gas sales. "They just recover their costs," he explained.

According to Booth, the customer charge and the distribution rate fee that appears on a customer's bill is set by the APSC. Included is recovery of the utility cost and a return on the utility's investment.

"That gives them the opportunity to recoup their expenses," he explained. "That's what they make their money on."

People needing help with payment of natural gas bills should call their local provider, Stevens said.

"If they call us, we can work with them any way we can," he stated. "We have some funds still available."Those funds, he explained, are administered through local agencies to help those in need.

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