Editor’s note: We will update prices regularly from as many companies as will furnish us the information. If companies refuse to furnish us information, we’ll also publish that.
Propane prices are not government regulated. They are market responsive, based on what it costs local companies to buy and distribute propane to Hill users. Prices vary based on propane availability from refineries, consumer demand, time of year, transportation costs, and exigencies that might interrupt or divert supply flow.
And because propane prices are not government regulated, they are sometimes negotiable, depending on the particular business model of the local supplier. Because prices can be negotiated, it is important to know what questions to ask in addition to price-per-gallon.
For example, what is: a new user first-fill price, fill price for existing users, cost to fill if the tank is owned by the propane company or the property owner (prices could differ) and the annual tank rental cost? Does the propane company sell propane tanks? What are prices for new or refurbished tanks and, importantly, what are the company’s delivery policies?
There are currently six companies supplying propane to Idyllwild: A.C. Propane, Amerigas (successor to Ballard Gas), Diamond Valley, Ferrellgas, SoCal and Suburban. A seventh, Mutual Propane, had been supplying here on a trial basis but pulled out about a month ago, transferring its clients to A.C.
Of those interviewed,
- A.C. charges $1.99 for first fill with subsequent fills depending on usage (larger users pay less per gallon). Tank rental is $69 per year and tanks for sale range on average from $1,000 to $1,400.
- Amerigas charges $1.39 for first fill, $1.99 for subsequent fills as part of town-wide “community pricing.” Tank rentals are $30 in the Idyllwild area (more off-Hill) and Amerigas does not sell tanks.
- Diamond Valley did not respond to inquiries.
- Ferrellgas charges $1.74 for first fill and $2.89 for existing customers. Annual tank rental is $45 with first year free and Ferrellgas does not sell tanks.
- SoCal does not have a teaser first-fill rate. It charges $2.29 per gallon for filling its tanks and $1.99 per gallon if you own the tank. Annual rental for a smaller tank (250 gallon) is $65, $75 for a larger tank (500 gallon) and sale of tanks, new and refurbished, depends on size and ranges from $800 to $1,800.
- Suburban Propane charges $1.73 for first fill, $1.98 for subsequent, $75 for tank rental up to 320 gallons and $95 for larger tanks. It has a fee waiver for first year of tank rental and Suburban does not sell tanks.
Readers should understand that propane prices vary and that rates reported this week will likely change as winter unfolds.
A company’s delivery policies are especially important if a customer runs out of propane. As SoCal CEO Andrew Kotyuk explained, some companies could charge extra for delivery if you are not on a regular “fill-as-needed” route where the propane company is responsible for monitoring your tank. Said Kotyuk, “If your tank is empty, some companies could charge extra for conducting a leak-detection test and relighting the pilot. We don’t do that. That’s not part of our business model. We’ll pull a driver to fill your tank on the same day with no extra fees if we’re responsible for monitoring.”
Knowing what questions to ask your propane supplier is important since it’s not just about price-per-gallon on any particular day. Understanding the business model of the supplier is also important — especially their customer-service policies.
To begin understanding the propane market and consumer pricing, propane is initially priced per gallon at point-of-production at a particular point in time. That is called a “spot price.” A common and oft-quoted national spot price is from point-of-production in Mont Belvieu, Texas. Transportation costs from point-of-origin to eventual destination increase costs to consumers. Increasinglwy Southern California propane distributors are buying their supplies from Los Angeles refineries rather than contracting for delivery from Texas.
The recent dramatic fall in oil prices is affecting propane prices. For comparison, the spot price at Mont Belvieu for the week ending Friday, Sept. 28, 2012, was $0.89 per gallon. Now, further into winter pricing, it is $0.41 for the week ending Friday, Jan. 15, 2016, reflecting the fall in oil prices.
According to the U.S. Energy Information Administration, the average price in the U.S. for residential propane as of Jan. 18, 2016, was $2.02 per gallon. It was lowest in the Midwest at $1.48 per gallon and next lowest in the West at $1.85. The highest price was in the lower Atlantic states at $2.81 per gallon.
Other questions that could help a consumer feel more comfortable with a propane supplier, depending on the consumer’s business preferences, are how long the company has been in business, whether it is corporate, regionally or family-owned, and whether the company has its own storage facility. If the company can’t store low-priced propane, it could be hostage to fluctuating market prices resulting in price spikes to consumers.
Propane companies don’t normally offer hardship or senior rates, although that, too, could be part of a company’s business model, such as discounts to veterans, hardship payment arrangements and leveling-out prices throughout the year based on a customer’s ability to pay.
Across-the-board hardship discounts and rates are given by public utilities because they receive tax-dollar-funded state subsidies. Because propane companies are private, they have no discount cushions other than their margins. Said Dave Castaldo, owner of A.C. Propane, “If I offered a senior-citizen discounted rated, it’s as if I am supporting that person directly. It comes out of our pockets. Public utilities can afford to offer those discounts because of government subsidies.”
What is available to local propane customers are stipends from a federally funded, Low Income Home Energy Assistance Program administered by the Riverside County Community Action Partnership. The program provides once-a-year assistance stipends, based on qualifying factors, to Riverside County residents to help with utility bills, including propane. For information about the program and to download an application, visit www.capriverside.org/program/utilityassistanceprogram. The Idyllwild HELP Center lso has granted utility assistance in the past, but grants typically run out early in the season.