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Agricultural News

Denial of Propane Supply Study a 'Slap in the Face' to Oklahomans

Thu, 17 Jul 2014 11:19:27 CDT

Denial of Propane Supply Study a ‘Slap in the Face’ to Oklahomans

The denial of a request for an interim legislative study of propane supplies "is a slap in the face to many families and small businesses that were hammered by soaring heating costs last winter," state Rep. James Lockhart charged Thursday.

The Heavener Democrat's request for a study of propane infrastructure and supply in Oklahoma was disallowed by House Speaker Jeff Hickman.

Propane prices "skyrocketed last winter at the height of flu season and only a few weeks after Christmas, when most families are cash-strapped," Lockhart recalled.

"I requested an interim study so we could get an idea of the status of our propane supplies, so hopefully we don't have to experience a second consecutive price spike," he continued. "Evidently the Republican legislative leadership doesn't care whether our citizens can afford to heat their homes in the dead of winter."

Lockhart said his study "would have afforded industry leaders and government officials an opportunity to assure the citizens of our state that they won't be forced to choose between food and medicine, or keeping their heaters on."

The cost of living in Oklahoma is rising "under this Republican-controlled Legislature," Lockhart said. "Everything from late fees on car tags, driver's license renewals, college tuition and water bills, is going up."

Hodgen propane/butane dealer Curtis Kelly said his domestic customers usually pay $1.85 per gallon for propane, and poultry farmers pay $1.50 per gallon.

In January, though, prices tripled; Kelly said he had to charge in excess of $5 per gallon when propane and butane prices skyrocketed. The three Oklahoma refineries where Kelly procures propane were charging him $4.95 a gallon, he said. Consequently, filling up his 10,000-gallon transport truck cost him $50,000, and he was going through a load "about every day" at that time.

The retail price of propane "has risen from $1.80 to $2.65 - within the past four days," Lockhart wrote to his colleagues in the Legislature on Jan. 22, and "it is shooting up again today-"

State Rep. David Perryman, D-Chickasha, said many of his constituents were experiencing the same dilemma. Although propane retailers in his legislative district were "scrambling to protect their customers," the costs "would be devastating to consumers even if the retailers sold propane at wholesale cost," Perryman lamented.

The price hikes, which occurred during an unseasonably cold winter, imposed a financial strain on chicken and hog farmers who use propane to heat their animals; on senior citizens and others on fixed incomes, who use propane to cook with and to heat their homes; and on public schools, whose budgets for utility bills were disrupted by the propane crisis, Lockhart noted.

More than 400,000 Oklahomans rely on propane to heat their homes and prepare food, and many Oklahomans depend on propane to "support their livelihoods and for economic security," Lockhart related in House Resolution 1039.

The Oklahoma Propane Gas Association counts 21 suppliers serving this state, and has 96 retail members, ranging from Boise City to Miami and from Braman to Gainesville, TX.

In his resolution, Lockhart said Oklahoma and at least 21 other states were experiencing critical propane shortages. Several other states, he said, allocated government funds help families cope with the propane shortage. In Oklahoma, though, no financial assistance from the state "has been given directly to Oklahoma families to help them overcome the propane crisis," Lockhart complained.

In HR 1039, Lockhart recommended that some money be allocated from the state "rainy day" fund "to provide assistance to families, children and businesses in need because of the propane shortage." The resolution died without ever receiving a hearing. The Constitutional Reserve Fund contains approximately $532 million, ledgers reflect.

Supplemental funding for low-income households who use propane was made available through the Energy Crisis Assistance Program (ECAP). That public assistance was provided from a $4 million federal grant coupled with $600,000 in donated funds from utility companies, the state Department of Human Services reported.

Lockhart said he asked the state Attorney General's Office to investigate whether propane producers were price gouging, and he asked the governor to freeze prices under the state's Emergency Price Stabilization Act of 1999. He appealed to the Oklahoma Bankers Association to approve short-term, low-interest loans to small propane suppliers "so they could extend credit to their customers." He also wrote a letter to the U.S. Secretary of Agriculture, requesting relief for farmers coping with soaring propane prices.

It was all for naught, though, as none of his requests was approved. Nor was his interim study request.

"I had hoped that our state's leaders would be more concerned about whether we'll be prepared if the same circumstances arise again this winter," Lockhart said. "Apparently I was mistaken."



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