Propane

[Joe Shlabotnik]

Anyone here use propane for their heating? I am visiting my mother and she has a contract with Suburban Propane that has gone from $160 a month a year ago, to $330 6 months ago to $595 the past few month. She is on a 'Budget Plan' that is supposed to level out payments across the year.

I know nothing about the Propane market but what I've found out the last 24 hours:
- Mom moved into this house 18 years ago and, as far as she can recall, has never talked to anyone about the account other than continuing the deal that the previous owner had. She tells me she's never had a problem til this year.
- Prices seemed to be 2-something a gallon a year ago and are now in the upper 3's and might have hit $4 during the shortage early in the year. It's been a hell of a winter as we all know so it doesn't surprise me there was a supply/demand problem.
- The last fill up my mother had was a couple of weeks ago and the price was $4.55 a gallon - more than a dollar more than the commodity prices I'm seeing on the Internet. For example the latest NY State Energy Research and Development Authority price quote for her region is $3.312
- I called up a competing propane firm - Griffith Energy - and they quoted me a 'first fill' price of $2.90 a gallon. Then in May she could sign up for a 1000 gallon annual rate of $3.20 which she'd pay in monthly installments. There were provisions for if she used less or used more that took into account fluctuating prices, etc.
- Suburban Propane's customer service said they couldn't help me, I needed to talk to the local dealer who was 'closed for the day'. At 4:30 in the afternoon. Not impressed.

So my plan is to call Suburban on Monday when I get back to Huntsville and see what the story is. I'll certainly let them know how attractive Griffith looks compared to what the current situation is.

Anyone familiar with Griffith or Suburban? Is this $1 spread between commodity price and residential fill-up price legitimate? if she was to switch to pay as she goes and just save the money herself over the summer months when shes using very little, would that save herself money?

[GeddyWrox]

[slide_into_first]

http://futures.tradingcharts.com/chart/ ... 1396114705

Natural gas prices are way lower than several years ago, although up from 2012. There is no reason for her to be paying so much more now when prices were $12-14 in 2005.

[cardsfantx]

Propane and natural gas are different.

Natural gas is much cheaper than propane (we've found about 1/6 of the price).

With the house were building now, there is no natural gas option, so we're burying a propane tank for just the pool/fireplaces/stove. To heat, it'd be way too expensive with propane. Electric heat (which I hate) is what we're using, solely due to the price for propane.

[slide_into_first]

Propane is a by-product of natural gas production which yields methane and other fuels. Natural gas prices are higher than in 2012 but historically low. It still appears mom is being gouged.

[cardsfantx]

I know propane is a byproduct of natural gas.....but the are different products and they are priced completely different.

You can't look at the prices of natural gas, determine they are low, and then conclude that propane should also be low as it is a byproduct of natural gas. Propane is much more expensive than the natural gas that is transported via pipes to some residential homes.

That being said, the prices joe is saying are high, but not outrageous...as those are similar to the prices we were given for the home we're building now.

[cardsfantx]

And I'm assuming since she's using propane, that she must be rural, and not have access to a natural gas hookup?

Propane is so high here, that electric is even a lot cheaper than propane to heat a home....propane is the most expensive route you can go (besides maybe oil, but I have never looked into that option).

[Joe Shlabotnik]

And I'm assuming since she's using propane, that she must be rural, and not have access to a natural gas hookup?

Yup - out in the country north of Canandaigua, NY. Hadn't thought about redoing her house with electric. I'll have to look at that.