Sunday, February 2, 2014
On the same day Attorney General Chris Koster announced an investigation on propane prices, Rep. Jay Houghton, R-Martinsburg, filed House Concurrent Resolution 18. Houghton represents the 43rd district which includes the northern and eastern portions of Callaway County and Audrain County.
In HCR 18, the Missouri General Assembly requests the U.S. Department of Justice to also investigate why there was a price spike in propane from about $1.71 to about $2.43 in a year’s time.
The document states that the Cochin pipeline in Alberta, Canada, which is about 1,900 miles long and produces about 70,000 barrels of propane a day, was closed “for a large portion of December.”
The pipeline has two storage locations — one in Mont Belvieu, Texas, and the other in Conway, Kan. — and the Kansas location, HCR 18 states, is the “pricing hub.”
In the third week of January, propane prices per gallon at the two locations differed by 67 cents. HCR 18 states the Texas location traded propane at $1.48 per gallon, while the Kansas location traded propane at $2.15.
It continues to state that “current inventories” will meet customers’ demands for up to 24 days. That number was 42 days last year.
“The closure of the Cochin pipeline, the increased amount of exports, the drastic increase in price, and the difference in price among propane storage facilities has resulted in the inaccessibility of propane to the citizens of Missouri,” HCR 18 reads.
According to a Jan. 27 press release from Koster’s office, 40 consumers have filed complaints about propane prices, reporting propane prices were about $1.94 in December and have risen to around $5.
The release also states that Koster’s consumer investigators took part in a multi-state conference call on Jan. 24 with propane gas industry representatives.
“Distributors and analysts have pointed to a sharp increase in the export of propane and substantially higher consumption this winter, which may have created a corresponding shortfall in the supply of domestic propane,” the release states.
Houghton said the propane price increases are hitting those on fixed incomes like businesses and the elderly.
“This never should’ve happened in the first place when we’re in the middle of winter,” Houghton said.
Houghton said he also sent a letter to Koster requesting his office do some digging into the issue, but thought authorities on a federal level would bring more muscle to the fight.
“They swing with a bigger stick,” he said. “They can probably get the attention of the industry better than Missouri as a state.”
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