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June 2012
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Propane marketers preparing for winter

BY GENEVIEVE POSTLETHWAIT gpostlethwait@paducahsun.com

Although the calendar still shows 39 days before the start of fall, for propane users it's already time to start thinking of winter.

Last year several crises hit the propane industry at once, resulting in a nationwide propane shortage. In the Purchase area where propane is a widespread heating source, the blow was especially brutal. Residents and businesses struggled to keep their tanks full in the face of increased propane costs, and in some cases cutoffs.

Propane companies big and small struggled to deliver propane gas and services.

Prior to departing for August recess last week, U.S. senators introduced the Propane Supply and Security Act of 2014. The bi-partisan bill seeks to prevent future shortages by strengthening the federal capacity to collect propane supply data and respond to crises like last winter's. Efforts are being made locally as well to strengthen propane supply and distribution.

"We can't go through another winter like last year's," said Eric Small, president of Paducah-based United Propane Gas, which has customers in most Purchase area counties. "It almost killed us. I think everyone, especially us, has taken extreme caution this year to ensure supply by kind of rearranging where, when, how and from whom they get their gas."

At the propane shortage's peak, UPG had to restrict its residential customers to 250 gallons per delivery and eventually suspended commercial deliveries altogether to ensure households had heat.

Small said UPG has learned a great deal as a company and has taken every precaution to prevent a repeat performance of last winter.

"We're well prepared," he said. "We've diversified and got more suppliers, about twice if not three times as many last year." He added that the company has added more underground propane storage capacity in Texas, Mississippi and Oklahoma. They've also already signed contracts with suppliers to guarantee more than enough supply at local terminals, with 25 percent of the company's supply available immediately if the need arises.

Ohio Valley Gas, a local office of AmeriGas Propane, has also taken extra precautions in preparation for winter. According to Danny Underwood, an account manager for the company, the company has increased its fleet by a half a dozen trucks, boosted manpower with several new employees, and increased efficiency with company-wide operating system updates.

"Last year we maintained our supply," Underwood said. "We never ran out. We never ran low. We were blessed, definitely. But there was room for improvement - for everyone including us - across the board."

Underwood's comment could apply to propane consumers as well. According to Kentucky Propane Gas Association Executive Director Tod Griffin, now is the time to call propane marketers and secure supply for winter.

"Gone are the days when you call when you're low on gas," Griffin said. "We've told people, call early. Call now. If you wait until you've got 2 percent of propane in your tank when it's cold outside and the roads are icy, it's unreasonable to expect a truck at your tank within the hour."

Griffin said he is a propane customer too, and signs a contract with a propane marketer every year as a "keep-fill" customer. He encourages others to do the same. Most suppliers offer similar contracts that guarantee low, preseason prices and ensure supply. Most also offer budgeting options to help offset the cost, he said.

"Just call and ask about it now before it gets into the heating season," he said. "That's what it takes is conversations."

According to the U.S. Energy Information Administration's most recent weekly supply estimates, the Midwest currently has 23,433,000 barrels of propane in stock, with 70,300,000 barrels for the entire nation. That's up from 21,521,000 and 61,851,000 barrels respectively this week last year.

"We've got gas coming out our ears," said Small. "We've got plenty of gas, and we're tickled to death to take on new customers. It's going to be a different year. A good year. But just in case it isn't, we're ready."

Contact Genevieve Postlethwait, a Paducah Sun staff writer, at 270-575-8651 or at gpostlethwait@paducahsun.com.

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