Latta, Walz Introduce Legislation to Address Propane Issues
Congressman Bob Latta (R-OH), along with Congressman Tim Walz (D-MN), today introduced the Propane Education and Research Enhancement Act of 2014. The bipartisan legislation directs the U.S. Department of Commerce (DOC) to more accurately calculate consumer propane costs. It also enables the propane industry to use its resources to mitigate price spikes.
“Last winter, the lives and livelihoods of many Americans were threatened due to propane shortages across the country,” said Latta. “Access to heat was a requirement for survival, and we want to ensure that Americans do not face the same hardships. The Propane Education and Research Enhancement Act of 2014 would take the necessary steps to allow the propane industry to adequately address propane supply and pricing issues, so consumers are not negatively impacted this winter.”
“Winter is coming. Minnesota has already seen significant snowfall and freezing temperatures. It is imperative that we do everything in our power to protect families and local businesses from facing the price shocks we witnessed last winter when a lack of supply put people’s lives and livelihoods at risk,” said Walz. “The Propane Education and Research Enhancement Act provides the tools that consumers and distributors need to avoid future disruptions.”
In 1996, Congress enacted the Propane Education and Research Act (PERA) authorizing the propane industry to collect and use its own resources for safety, training, research and development, and education for the benefit of propane consumers and the public. The law also established the Propane Education and Research Council (PERC) to accomplish these goals.
To prevent this program from creating a disproportionate demand for propane, the DOC is required to annually calculate the price for “consumer grade propane” and compare it with an index of prices of specified competing fuels. If the price of propane exceeds a certain threshold, PERC is restricted from conducting its educational outreach activities.
In 2009, due to a misinterpretation of the law by the DOC, the restriction was triggered and all educational outreach by PERC ceased. While DOC believes Congress intended PERA to focus only on “residential-only” propane, the text of the law does not limit it to the residential market. To correct this discrepancy, the Propane Education and Research Enhancement Act of 2014 would clarify the language of the law to require DOC to use the proper data and bring the application of the law back in line with Congress’ intent. It would also amend the existing functions of PERC to include training distributors and consumers in strategies to mitigate the negative effects of propane price spikes.