Wednesday, August 10, 2011

Propane & Propane Delivery...ARGH!

When I built my house, I put in a high efficiency Buderus propane boiler to provide hot water for my in floor heat, etc. There were pro's & con's but I liked that exhaust is mostly water. Since I do roof catchment of rain water for my drinking water, I didn't want a furnace smokestack dumping ash and other contaminates on my roof.

But I certainly didn't do enough research on the propane provider. I just went with the one that convenient. They're office is located on the main road into Homer, so I drive past them when ever I go into town. But it really hasn't been easy. They can't set up an auto pay, which is really a pain since I travel a lot. Though I have to say they've never let me run out of propane. But the cost really keeps going up. I know all kinds of fuel keep rising, but this is getting ridiculous.

Anyway, this years lock in price for winter deliveries is $5.09 per gallon. My last fill up was in May, I'm 99% sure I paid $3.89. So this is a big jump. I was grousing about it to my neighbor, who used the other propane company. She said her lock in quote was $4.37 for this winter. And that's a big difference. So I've been doing some research trying to figure out why. Here is what I've found:

1. Propane delivery companies don't post their prices. I'm so used to gas prices being posted & competitive that I didn't realize that propane prices aren't regulated. The delivery companies can charge what ever they want. And since they don't post their prices, most people don't realize that there can be quite a bit of difference. Shopping around can really pay off.

2. I did some Googling and ran across some documents from the Gas 4 Alaska conference last April. Approx 30% of the propane sold in AK comes AK sources. From what I can tell, mostly from the Tesoro refinery in Nikiski (about 100 miles from my house, not really that far). The rest is shipped up from either Edmonton, Canada or Washington. Argh! This is ridiculous too. We shouldn't have to ship propane, gas, jet fuel or diesel into AK from 'outside'.

And I did a bunch of looking for retail propane prices, but without much luck. The Federal Government posts weekly prices for the East Coast & Mid West, but not for the West or AK. These are only reported Oct-March. March 2011 the average weekly rate in Kansas City was $1.90, up from $1.403 in 2010. That's a LOT less then we're paying up here. I found a posting on a tracking forum for a residential delivery in Seattle, for $3.55 per gallon. That's still a lot less than $5.09.

While I can go on & on about how crazy it is that AK is paying such high propane prices, it still doesn’t tell me why the 2 local companies have 2 such different prices. As far as I know, propane is propane and it should burn the same in my furnace, no matter who I purchase it from. Am I paying $.72 per gallon more because the customer service is better? Boy I hope not.

If anyone can shed some light on this for me, please do so. I'm very seriously considering having my rented tank (another rip off) removed and replaced by the 2nd company. So I'm also interested in any pro's or con's for either propane delivery company on the Kenai Peninsula.

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