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Propane issues continue in state

Feb. 26, 2014 | 0 comments


Propane complaints are on track to make the top-10 list of state consumer complaints this year.

Sandy Chalmers, administrator of the Trade and Consumer Protection division at the state Department of Agriculture, Trade and Consumer Protection (DATCP) said last week that her bureau has already gotten 368 calls on propane issues. Consumers have also filed 122 formal complaints.

Each year Consumer Protection compiles a list of the top complaints from consumers and propane is quickly becoming one of them in 2014.

"Many of the calls were about a Manitowoc County company but we've heard of similar situations around the state," she told members of the department's policy board during a meeting Feb. 19.

Many of the complaints were over prepaid contracts or monthly billing contracts. "We don't know yet how the laws will apply in many of these complaints."

Department Secretary Ben Brancel said he has talked with many state, local and tribal officials about the complex propane issues.

"Some LP providers, when they sold contracts to individuals, immediately contacted their suppliers and they pre-bought, and those businesses are okay. If they didn't do that they're in trouble."

Brancel said many of the consumer complaints coming in to the department relate to "keep fill" contracts. "What those contracts mean is that you don't run out. They can come back for a drizzle every other day."

The reason many suppliers aren't actually filling those consumers' tanks when they visit is that they are having trouble getting more propane.

The agency is working through "a lot of assumptions by a lot of people on how propane is sold and how it's contracted," he said.

"Those are the challenges we face in this issue — sorting out assumptions and expectations of various parties."

Where individual contracts have not been honored by propane suppliers, those are the bailiwick of DATCP, he added, but if complaints deal with wholesale contracts those are not necessarily the purview of the Consumer Protection bureau, he added.

When wholesale level prices were skyrocketing and retailers had to follow – the whole question in consumers' minds of price gouging — those may not be something the agency can do anything about, he said.

State agreement

Also last week, the state announced it had forged an agreement with several utility companies that will allow the state to access more than 117,000 gallons of propane currently stored at these utilities to help address the current propane shortage.

"We are grateful to Madison Gas and Electric and We Energies for helping us address the needs of our citizens in this challenging time, and it is yet another example of the power of public-private partnerships," Gov. Scott Walker said, in announcing the agreement.

"We will use the propane from these companies as a contingency plan to help meet the need of low-income citizens in areas of our state where the supply is constrained."

Under the arrangements with the utilities, the state can access up to 42,000 gallons of propane currently stored at We Energies' Oak Creek facility, with the possibility of an additional 30,000 gallons from We Energies' Tomah facility.

Madison Gas and Electric is providing up to 45,000 gallons of propane from its facility in Prairie du Chien.

The propane the state requests will be deployed to help meet the needs of citizens qualifying for low-income energy assistance, and will be replaced by the state in the non-heating season.

The state will contract for transportation of the propane from the utility sites to propane dealers where supply is needed to provide heating fuel for low-income customers.

Both utilities' supply will be replenished this summer. The utilities use the propane for a variety of purposes including backup fuel and natural gas supply augmentation.

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