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New Consumer Protections Will Help Minnesotans Who Rely on Propane to Heat Their Homes

Consumer protection measures come in response to last winter’s propane crisis

May 16, 2014

For Immediate Release

SAINT PAUL, MN – Minnesotans who rely on propane to heat their homes will benefit from new consumer protections signed into law today by Governor Mark Dayton. During last winter’s propane shortage, Minnesota consumers issued numerous complaints to the Minnesota Department of Commerce regarding additional service fees, concerns of price gouging, and other unfair market practices. In response, Governor Dayton and the Minnesota Legislature have enacted new consumer protections that will help ensure Minnesotans who rely on propane to heat their homes are treated fairly and are not unfairly or unreasonably denied the opportunity to purchase needed propane supplies.

"These new consumer protections signed into law today by Governor Mark Dayton – while representing a compromise on some provisions – are a step in the right direction,” said Commerce Commissioner Mike Rothman.   “We need all hands on deck to help take every step we can to avoid a propane crisis in the future like the one we had this past winter and these measures will play an important role in the state’s ongoing efforts.”

New Consumer Protections for Propane Heating Customers

The new law signed by Governor Dayton today will establish the following consumer protections for Minnesotans who rely on propane to heat their homes.

  • Transparent Pricing – A large complaint from propane customers was the addition of fees to the price-per-gallon and seeking transparency in understanding what they are charged and why. This new law requires the propane distributor to provide its customers the current per-gallon price of propane including all additional charges, fees, and discounts for residential heating service. The information must be provided to the public upon request and to new customers prior to receiving heating service.
  • Prohibition of Extraneous Fees – Many consumers who heat their homes with propane enter into a contract with their distributor prior to the heating season. Some consumers were billed additional fees during the propane crisis. Due to this legislation, propane distributors are now prohibited from adding any service, distribution, transportation, or other fees to the bills of customers who had entered into a contract with the distributor, unless they cannot get supply.
  • Payment Plan Option – For many consumers who purchased propane during the peak of the crisis at the end of January and the month of February, they often wondered how they could pay the entire bill at one time. To address this, the new law requires propane distributors to offer all customers a budget plan. This includes individuals that receive Low-Income Home Energy Assistance (LIHEAP). Additionally, the distributor must notify its customers on a budget payment plan of price or fee changes that may affect the monthly amount by more than 20 percent. The propane distributor may, however, alter or terminate the plan if the customer failed to pay two monthly payments during the budget payment plan.
  • Consumers Can’t Be Turned Away – Another issue that many propane customers faced was distributors refusing to sell to certain customers. This new law requires propane distributors that have available supply are prohibited from refusing to sell to a customer who pays by cash, receives LIHEAP or other government or private funds for that delivery. A propane distributor who accepts LIHEAP must make available to customers information on what energy assistance is, and how to apply.  

Monitoring Supply, Enforcement, and Options

The new law also provides the Commerce Department additional tools to more effectively monitor the supply of propane in Minnesota, investigate complaints, and enforce the law.

  • Notification of Propane Supply – To help monitor the supply of propane in Minnesota, the new law requires terminals where propane is loaded into trucks to notify the Commissioner of Commerce within 24 hours when propane is not physically available for sale to distributors.
  • Enhanced Nondiscrimination Authority – To ensure that propane distributors cannot discriminate against energy assistance customers, the legislation gives Commerce enforcement powers similar to its authority in the other industries it regulates. 
  • Exploring Alternative Heating Options – There is more work to be done to help avoid a similar supply and price crisis in the future. For example, to assist in providing heating options to current propane customers in the future, the new legislation includes a requirement for the Legislative Energy Commission (LEC) to study what can be done to convert propane heat customers to natural gas or other energy sources. The LEC study and recommendations for legislative solutions will be due by January 15, 2015, in time for the next legislative session.

Energy Assistance is Still Available

Although spring is here, the Commerce Department still has money available to help Minnesotans stay warm as the chilly nights continue. The Energy Assistance Program is accepting applications through May 30 to help low-income customers pay their energy bills. Minnesotans know that cold spring days may continue, requiring many households to keep their heat running. For families on a tight budget, the need for heat is an additional cost many households will not be able to bear. 

The average grant per household is about $500. Customers with incomes less than 60 percent of the state median income ($52,370 for a family of four) may qualify. Households with seniors, people with disabilities, and children are especially encouraged to apply. People have until the program year ends May 30 to apply, however households are served on a first-come-first-serve basis while funds last.

Households can only be served once per heating season; therefore, households who have already received energy assistance this program year (October 1, 2013 to May 30, 2014) are not eligible for the primary grant but additional crisis benefits may be available for households facing an emergency.

Energy assistance funds go directly to the utility company on behalf eligible households. Households apply for energy assistance through 32 local service providers. Qualifying families must apply for assistance at the local service provider in their area. A list of local service providers and more information about the Minnesota Energy Assistance Program can be found on the Commerce website or by calling 1-800-657-3710.