Winter shut-off rule for propane heat gets House energy OK

Barring propane distributors from discontinuing wintertime service to the more than 200,000 Minnesotans who use the gas to heat their homes is the centerpiece of legislation OK’d by a House committee Monday, though the bill met heavy resistance from industry representatives who said it does nothing to address the causes of this winter’s propane shortage and would harm providers.

HF2537, sponsored by Rep. Paul Marquart (DFL-Dilworth), is Gov. Mark Dayton’s administration’s proposal to strengthen protections for residential propane customers following a winter that saw prices spike to more than $6 per gallon in some parts of the state.

The bill would extend the state’s cold weather rule to propane distributors, preventing them from cutting off service to low-income residential customers if they have entered into a payment agreement, and put in place other protections like requiring distributors to offer budget payment plans, prohibiting fees for not meeting certain propane usage levels and requiring distributors to offer identical payment and service options to all customers.

“No one should have to worry about heating their home in the dead of winter,” Marquart said.

Around 10 percent of Minnesota households, more than 213,000 of them, use propane for heat, according to the Department of Commerce. One quarter of those households, more than 53,000, qualify as low income and are eligible for the state’s Low Income Home Energy Assistance Program, or LIHEAP.

The House Energy Policy Committee approved the bill on a split voice vote Monday and re-referred it to the House Commerce and Consumer Protection Finance and Policy Committee. The Senate Commerce Committee on Monday laid over a companion bill, SF2164, sponsored by Sen. Kevin Dahle (DFL-Northfield).

The bill, however, drew sharp criticism from some House members and business owners, who said it represented a heavy government hand and would deal ineffectively with issues that led to a more than $4 per gallon jump in propane prices in parts of Minnesota between last October and early this year.

A cold, wet harvest drove up propane usage to dry crops in the autumn and was followed by a brutally cold winter that again drove the need for propane.

Those factors were compounded by issues with storage, supply, transportation and a lack of flexibility in when LIHEAP recipients are provided funds to purchase propane, said Cort Holten, a lobbyist for the Minnesota Propane Association.

None of those issues are addressed in HF2357, said Rep. Michael Beard (R-Shakopee). Instead, he said, the proposed regulations treat smaller propane businesses more like large public utilities and would hurt distributors.

“I’m concerned about the overreach in this bill that uses a sledgehammer to fix a problem that probably needs a tack hammer,” Beard said.

Distributors weren’t cutting off service to customers, Beard said, even in the absence of the extended protections, and Rep. Tim Faust (DFL-Hinckley) testified that he believed the bill would worsen problems with propane distribution.

“Minnesota deserves better than $5-a-gallon propane,” said Mark Grave, propane operations manager with Federated Co-Ops in Princeton. “We can do that with your help. We can’t do that with your handcuffs.”

    Our primary commenting system uses Facebook logins. If you wish to comment without having a Facebook account, please create an account on this site and log in first. If you are already a registered user, just scroll up to the log in box in the right hand column and log in.

    Jonathan Avise's picture
    Jonathan Avise