For Consumers: A Quick Review of Propane
WHAT IS PROPANE?
Propane gas is a versatile energy form that can be used as a heating and cooking fuel in homes and commercial establishments, as a motor fuel for many types of vehicles, a clean-burning industrial and agricultural fuel and an emergency fuel in disaster areas and situations where electrical service is interrupted. Propane also frequently powers forklifts in industrial settings. During warmer months, propane grill tanks are often used by consumers for backyard barbeques.

SELECTING A PROPANE COMPANY
The propane industry in the state of Pennsylvania has much to offer the consumer. A consumer has the opportunity to investigate and choose its propane energy provider. Propane companies offer a wide variety of programs, services and benefits at differing prices.

Propane companies range from smaller “family” operations to larger corporations. A consumer has the right to select any propane company, which provides services in its area. Unlike some energy sources, propane companies are not limited to certain area by state law, but can select the area they wish to service. Generally, there is a number of competing propane companies within any given geographic area in Pennsylvania.

Consumers are encouraged to select a propane company, which meets their own needs and style.

WHY DO PRICES VARY FROM ONE COMPANY TO ANOTHER?
Propane companies operate in a very competitive marketplace and prices may vary from one company to another. Two of the major reasons for differences in pricing are (1) the type and amount of services provided and (2) the source of the propane sold by the propane company. With regard to services, some companies offer many services and programs to their customers, and include those service costs within their cost per gallon pricing. Other propane companies prefer to use additional pricing for additional services on top of the price per gallon. Not unexpectedly, propane companies that provide complete propane services normally will be slightly more expensive than companies that provide limited or no additional services or programs. Add-on costs often include tank leasing fees, minimum usage fees, delivery charges, and penalties for exiting a contract early. Propane companies sometimes charge minimum usage fees if customers use only a very limited amount of propane. Minimum usage fees often result in a higher price per gallon to cover the costs of the propane company’s delivery of the limited amount of propane and need to service the propane tank.

The source of the propane supplied by the propane company also affects pricing. Propane companies in Pennsylvania obtain propane from a variety of sources, and the costs often vary by source. Some propane companies obtain propane from a major pipeline, which transports propane from Texas. Other propane companies in Pennsylvania have to obtain propane from rail shipments. Still other propane companies have to truck propane from locations near or far. Some propane is obtained from foreign locations such as Algeria and shipped to the United States. Sources of propane supply for any given propane company often fluctuate with related fluctuations in pricing during winter months.

Depending upon the source of propane and the climate, Pennsylvania propane companies may be paying significantly more for the propane needed to service their customers particularly during very cold weather, when propane companies must obtain more expensive product or pay for higher shipment costs by truck or rail from remote locations.

Propane companies are regulated by a number of federal and state agencies. For example, drivers of propane trucks are limited in the number of hours they may drive. Federal tariffs apply to the shipment of propane on the pipelines. The price of propane charged by an individual company is not regulated.

RECOMMENDATION
It is to the advantage of each consumer to compare prices and services of several propane companies before deciding upon which propane provider they can build a trusted and long term relationship with. To find propane companies who service your local area, please visit usepropane.com.

IS THERE ANY FINANCIAL ASSISTANCE AVAILABLE?
Yes, families using propane as a heating source may be eligible to participate in the Low-Income Energy Home Assistance Program (LIHEAP). This program helps low income families pay heating bills. LIHEAP is a grant and you do not have to repay it.

You may apply online at www.compass.state.pa.us or call the Statewide LIHEAP Hotline at 1-866-857-7095. Applications are also available at your local county assistance office.