The rising cost of propane—which, according to the Montana Governor’s Office, is used to heat 13 percent of Montana homes—has impacted Madison County residents.
The Alder Market purchases propane from the Montana Energy Alliance (MEA) out of Dillon. According to Gerry Goody, general manager at MEA, current propane prices have nearly doubled from what they were in the summer.
“In the summer, they were at $1.50,” Goody said. “We are at $2.99 right now… prices go up in the winter, but usually not like this.”
Goody said MEA sold propane for $1.78 per gallon last January.
“Availability is a big thing,” he said, explaining the jump in prices. “Inventory levels are at half of what they should be right now. It has been difficult at times to get our loads in.”
Refineries are upping production to meet the need, Goody said. It is his hope that inventories will build up soon.
“When the inventories build, there will be more propane available,” he concluded. “It is all a matter of production, and [the refineries] are upping production.”
Governor Steve Bullock addressed the issue head-on in a recent press release, stating he “authorized a one-time-only 25 percent increase in benefits for Low-Income Energy Assistance Program (LIEAP) households whose primary heating fuel is propane,” among other solutions.
To combat the issue of delays in receiving propane, Bullock also temporarily suspended hours of service regulations for drivers of commercial motor vehicles transporting propane, to ensure travel restrictions for propane distribution were not resulting in delays for families trying to stay warm.
According to the governor’s office, the combination of “record cold temperatures” and “skyrocketing” propane prices in Montana have placed a strain on the entire state—some prices reaching more than $5 per gallon as opposed to under $2 per gallon just last year.
The AmeriGas corporate office was unwilling to comment on specific supply and pricing in local areas, according to Simon Bowman, media relations.
“The situation changes day by day,” Bowman said, continuing to cite three main reasons for the general spike in propane costs across the country.
“First, wholesale prices of propane are up more than 50 percent versus this same period last year,” he said. “Second, transportation costs are also up dramatically due to a strained system… There is only so much capacity to move product and when demand is high, that capacity is constrained and costs increase. Third is the high demand for propane over the past month due to colder temperatures in many parts of the country than we have seen in recent years.”
Homeowners and business owners who rely on propane for heat feel the effects of the shortage and increasing prices. Jamie Lovett, owner and operations manager at Madison Square said propane is a “huge, huge cost” for the 12,000 square foot building.
“Between the gym, the hallways and the office spaces, propane has always been a big expense for us,” Lovett said. “We had to find ways to become more efficient.”
To cut costs, Lovett keeps the gym cooler and added insulation to make the building more efficient.
“Still, we have a 1,000-gallon tank and we go through three tanks a year,” she said. “With the rising cost of propane, we are just maintaining our costs instead of saving money to buy more equipment for the gym.”
Personally, Lovett is also in the process of building a new home in the area. She and her husband, Brian, opted to install an outdoor wood boiler because of the cost of propane.
“Though the up front cost is more—$13,500 because we need a large one—we will end up making that cost back in three to five years by not using propane as a primary source of heat,” Lovett said. “[The boiler] will heat the water and the house’s radiant floor… we will have propane but just to serve as a back up.”