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Senators Introduce Bill Designed to Prevent Propane Shortages

In a rare display of bipartisanship, a trio of senators from states in the Midwest have introduced a bill designed to prevent propane shortages similar to the one that befell farmers, homeowners and businesses across the nation last winter.

On Thursday, Sens. Tammy Baldwin (D-WI), Al Franken (D-MN) and Rob Portman (R-OH) rolled out the Propane Supply and Security Act of 2014. In a joint statement, the legislators said the bill calls for "improving propane supply and price information, coordinating responses to shortages, studying the need for regional propane reserves and helping farmers purchase propane storage tanks."

"When the propane crisis hit last winter, I traveled around Minnesota and heard from families and producers about how much it hurt them," Franken, chairman of the Senate Energy Subcommittee, said. "I heard from everyone -- from homeowners who couldn't afford to heat their homes to turkey growers who couldn't heat their barns. This bipartisan bill will help us respond more quickly to future shortages and it will help prevent them in the first place."

The bill calls for giving the U.S. Energy Information Administration (EIA) "enhanced information-gathering tools" that would help the agency do a better job tracking propane supplies and, therefore, make better forecasts. The EIA would publish storage levels at major price points, including Conway, KS, and Mont Belvieu, TX.

In the event of future propane shortages, the bill empowers the secretary of the Department of Energy (DOE) to serve as the coordinator for federal and state emergency response efforts. Propane shipments could be prioritized in the event of an emergency, which dovetails with FERC policies.

The Department of Commerce would also be affected by the bill, by requiring it to more accurately calculate consumer propane prices.

On the belief that increased storage, especially at a regional level, could help avert future propane shortages, the bill also directs the DOE secretary to "study the effectiveness and feasibility of regional reserves of propane," then submit a plan to congress and the president for setting the reserves up.

The bill also calls for adding propane tanks to the list of equipment covered under the Department of Agriculture's storage facility loan program, and directs the Government Accountability Office to investigate whether services of propane at terminals and storage facilities are being priced fairly.

"Last winter's propane shortage caused a tremendous burden for the Ohioans who rely on propane to heat their homes and Ohio livestock operations," Portman said. "To be better prepared in the future, we must move quickly to enact this bipartisan legislation to help prevent and better manage shortages."

Last May, testimony before the Senate Energy and Natural Resources Committee revealed that propane shortages in the Midwest and Northeast could have been avoided if shippers had planned ahead (see Daily GPI, May 2). Recommendations from regulators and the propane industry at the hearing were incorporated into the bill.

On Feb. 7, the Federal Energy Regulatory Commission invoked its emergency authority under the Interstate Commerce Act to help alleviate "dangerously low" propane supplies in the Midwest and Northeast (see Daily GPI, Feb. 10).

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