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Michigan takes steps to address propane shortage

February 5, 2014
The Daily News

IRON MOUNTAIN - Upper Peninsula lawmakers on Wednesday welcomed an announcement that the state will provide assistance to residents and delivery companies who have been struggling to afford propane heating fuel .

Gov. Rick Snyder said the Department of Human Services, the Department of Natural Resources, and the Michigan Economic Development Corp., are taking steps to help residents with heating and financial assistance. He said the Department of Transportation and the Department of Licensing and Regulatory Affairs are also working to ease supply chain issues.

"We are using all available tools to relieve the propane supply shortages and to ensure Michiganders can heat their homes and businesses," Snyder said. "I'm confident these additional resources will help in our efforts to lessen the impact of this problem."

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In addition to $7 million already devoted to deliverable fuel heating assistance from the Michigan Energy Assistance Program (MEAP), the Department of Human Services is working with the legislature to dedicate another $7 million in Low Income Heating and Energy Assistance Program (LIHEAP) dollars to meet the heavy demand and need for these deliverable fuels this winter to assist as many people with additional resources as possible.

Residents in need of heating assistance with deliverable fuels are asked to call 211 or visit michigan.gov/heatingassistance for help.

"The need is definitely shown across the region," said Rep. Ed McBroom, R-Vulcan. "Sub-freezing temperatures without heating fuel can be every bit as much of an emergency crisis as flooding or hurricanes in other parts of the country. I'm glad the situation has the governor's attention."

Sen. Tom Casperson, R-Escanaba, agreed: "I know people will be glad for the help as propane prices have approached triple what families normally budget for heating expenses. The main focus right now has to be getting people through this emergency safely, and then we can see what more needs to be done for protection in the future."

Propane dealers and distributers will be able to apply for assistance through a new MEDC loan program to help them with costs driven up by the combination of high demand and restricted supply.

"I'm happy that the governor has responded to the need we are seeing so clearly here in the U.P.," said Rep. Scott Dianda, D-Calumet. "We are going to continue to work with the executive office to make sure that there are enough funds to help our most vulnerable citizens. We also want to make sure we help working people who maybe would not ordinarily need assistance, but have been forced to seek it out with these high propane prices."

Details on the MEDC loan program include:

- Propane dealers and distributors located in Michigan will be able to work with lending institutions on new lines of credit or expansion of existing lines.

- Banks can obtain cash collateral for up to 49 percent of an increase or of a new line, provided the line is used and restricted to the purchase of propane for distribution in Michigan.

- Banks will be responsible for normal reporting under the program and will be responsible for managing loans, including any collection activity on loans.

- A $5 million preference for dealers and distributors will be given through May, and the credit worthiness of individual applications will still be evaluated.

Those who are interested in the MEDC program should call 1-888-522-0103 or visit www.michiganbusiness.org.

In addition to offering heating and financial assistance, efforts to increase supply are ongoing. This week, more than 1.3 million gallons of propane have been delivered via rail to storage facilities in Marysville.

The Michigan Department of Natural Resources will offer a program to issue firewood permits, and will work with the forest products industry to identify loggers available in each county that have firewood for sale. Firewood permits are typically not sold during the winter. Visit michigan.gov/fuelwood for more information.

On Tuesday, Snyder and governors from six other Midwestern states sent President Barack Obama a letter formally asking for assistance in dealing with the propane shortage. The governors requested the Obama administration explore regulatory waivers aimed at increasing the supply of propane in Midwest states by extending an hours of service waiver and a temporary waiver of weight limits on the interstate highway system.

The U.S. Department of Transportation Federal Motor Carrier Safety Administration announced Wednesday that it will issue extensions of the State Emergency Declarations in the Midwest. These regional declarations will provide relief for commercial vehicle operations while providing assistance supporting the delivery of propane during the emergency. The declaration is effective until March 1, 2014.

Additionally, the Department of Licensing and Regulatory Affairs (LARA) is working with the Michigan Propane Gas Association and is prepared to act if customers encounter any trouble getting storage tanks filled due to their provider not having enough propane supply. Michigan law allows permits for propane companies to fill other companies' storage tanks when needed, and if customers encounter problems with a supplier not having enough supply, they should contact LARA toll free at 1-866-551-0005. The department will work with the association to get customers' tanks filled by another provider.

Customers who are concerned about possible price gouging should contact the Attorney General's Consumer Protection Division at 1-877-765-8388 or file an online complaint at michigan.gov/ag.

The Michigan Department of Transportation and the Michigan State Police, Emergency Management and Homeland Security Division are monitoring the propane shortage with local and regional emergency management partners.

For more information about being prepared before, during and after an emergency or disaster, visit michigan.gov/beprepared.

 
 

 

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