Rising Propane Prices Hit Home


Monday, February 19th 2001, 12:00 am
By: News On 6


ALPAUGH, Calif. (AP) — The centerpiece of Harry Parson's patch of dirt and weeds — there among the old cars and the pets — is a shiny white source of heat and frustration: A propane tank.

Parson, a 68-year-old retired electrician, is already paying for heart medication, trying to upgrade to a doublewide trailer and feeding his menagerie of ducks, rabbits, sheep, dogs, cats and fish.

Add the cost of propane — which recently peaked at about $2.35 per gallon, nearly twice as much as last year — and life hasn't been easy for Parson and other rural residents.

``The price of this propane has gotten ridiculous,'' said Parson, who keeps his power off during the day, except to run his refrigerator, and fires up the heat only for a few hours at night.

The price of propane has jumped nationwide, but hit hardest in California. It is a byproduct of soaring natural gas costs that have put the state on the brink of blackouts for more than a month.

Utility representatives, lawmakers and Gov. Gray Davis met Monday to discuss the governor's multibillion-dollar plan to solve the power crisis, which had resulted in 32 consecutive days of Stage 3 power alerts until last week and two days of scattered blackouts last month.

Propane was always considered clean, efficient and cheap — the fuel of choice for rural residents like Parson.

Now everyone living beyond the reach of natural gas lines — from poor valley dwellers to the leisure class in mountain hamlets — can relate to urban counterparts paying higher natural gas prices.

The higher propane costs can be blamed on a complex power production structure that was hit with something akin to a quintuple whammy, said Mary Reynolds, executive vice president of the Western Propane Gas Association.

Last summer's higher oil prices initially raised prices for propane, a byproduct of crude oil refineries and natural gas processing plants. Then, as wholesale natural gas costs escalated, petroleum companies switched to propane to power their refineries instead of the more expensive natural gas, limiting the propane available to homes and businesses.

Three previous winters had also left suppliers short on cash and with less propane in storage. When record cold hit in November and December, demand spiked and propane had to be imported by rail from Canada and Rocky Mountain states, driving up transportation costs.

Considering all those pressures, it's remarkable that the propane price only doubled, Reynolds said. She said dealers are absorbing some of the costs to remain competitive.

``Their customers are their friends,'' Reynolds said. ``The last thing they want to do is to see their prices go up.''

Prices have begun to dip as a result of warmer temperatures in January and stockpile increases, but many customers still feel they're paying too much.

Danny Martinez, district manager for Pioneer Propane in Madera, said one customer accustomed to paying no more than $150 per month wrote a check for $250 recently and scrawled, ``The price for freezing.''

``He was keeping his house cold and he still had to pay $250,'' he said. ``Some people thought we were trying to take advantage of them.''

In the hills south of Yosemite National Park, Richard Shryock spent more than $500 on propane last week — at about $2.15 per gallon — to keep the heat on at his Oakhurst home.

After 14 years of burning wood, Shryock, 74, bought into the hassle-free promise of heating with propane four years ago.

``I got sick and tired of lugging the firewood,'' he said. ``I talked to a lot of people before I put in this furnace and every last one of them told me it would cost as much as firewood. Well, it's costing me three and four times as much.''

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On the Net:

Western Propane Gas Association. http://www.westernpga.org

National Propane Gas Association: http://www.npga.org

Energy Information Administration: http://www.eia.doe.gov