Governor Walker Orders Further Action in Response to Propane ShortageMonday, January 27, 2014 - Press Release
Madison – After meeting today with representatives from the propane industry and state government officials, Governor Scott Walker instructed the Department of Administration’s Division of Energy Services to release an additional $7 million in energy assistance benefits, for a total of $8.5 million in additional funds, to help support low-income Wisconsin residents who use propane to heat their homes. The Governor also directed the Wisconsin Economic Development Corporation and Wisconsin Housing and Economic Development Authority to move forward with a combined $8 million in loan guarantee programs to help ensure propane dealers are able to obtain propane on the wholesale market and deliver it to consumers.
“Today, I met with state and industry leaders to determine if there are additional steps we can take to manage through the current crisis and help protect our citizens who rely on propane for heat,” Governor Walker said. “While we cannot produce more propane ourselves, I have directed additional funds be made available to help our most vulnerable citizens pay for the fuel they need and ensure propane dealers are able to obtain and deliver the supply we do have.”
Following today’s meeting, the Governor has:
- Directed the Department of Administration’s Division of Energy Services to release an additional $7 million in Crisis Benefits to counties and tribes that have households who use propane to heat their homes. The state will make funds available in anticipation of receiving additional federal Low Income Home Energy Assistance Program (LIHEAP) funds that were included in the recent federal omnibus budget bill. The $7 million released today is in addition to the $1.5 million that was released on January 24.
- Instructed the Wisconsin Economic Development Corporation (WEDC) to move forward with $5 million loan guarantee program. WEDC will provide loan guaranties to banks up to 80% of new or expanded lines of credit to propane dealers in Wisconsin. As wholesale prices rise in the Midwest, propane commercial retailers have exhausted their current lines of credit to meet their customer’s rising demand for propane. This program will require WEDC Board approval. An emergency teleconference meeting of the Board of Directors is scheduled for 1:30PM today.
- Directed the Wisconsin Housing and Economic Development Authority (WHEDA) to proceed with $3 million loan guarantee program. WHEDA will provide loan guaranties to banks of 50% of a total loan for dealers to purchase propane, but not to exceed $50,000 guarantee amount. This will require approval by WHEDA’s Members Loan Committee.
On January 25, Governor Walker declared a State of Emergency in response to the propane shortage that is impacting Wisconsin in advance of the extremely dangerous temperatures that are expected to move across Wisconsin in the week ahead. The declaration puts all state agencies on alert to be prepared to assist as needed in response to the cold weather snap and propane shortage.
The supply shortage in the upper Midwest has caused delivery delays and reduced delivery amounts for propane customers in Wisconsin, as well as all Midwestern states. The propane shortage has been caused by:
- unusually cold winter temperatures
- a major pipeline that supplies propane to Wisconsin, Minnesota and Iowa was temporarily closed for maintenance from November 28 – December 18
- a wet fall increased propane demand for grain drying
"Our focus right now is ensuring we keep all Wisconsin residents safe during this time,” said Governor Walker. “And while abnormal weather was a major factor in this current crisis, we also must take steps to ensure we do not face this situation again in the future.”
The Governor outlined the following series of actions:
- Calling on the Federal Trade Commission to review the recent price spike in wholesale propane price to ensure no anti-competitive activity occurred.
- Calling on the Federal Department of Energy to review the impact of propane exports on domestic supply and price.
- Asking other Midwestern States, through the Midwest Governor's Association, jointly review current propane delivery infrastructure and work cooperatively to ensure prudent, cost-effective investments are made.
- Forming a Wisconsin propane task force of industry, government and other stakeholders to make recommendations on steps Wisconsin can take to minimize the potential for future shortages.
The Governor also urged state legislators to pass AB596. Included in this bill is a provision that would allow the Public Service Commission, under certain circumstances, to make it easier for a gas utility to enter into an adjacent service territory to offer natural gas service to new customers. This would make it easier for some customers to access natural gas, instead of, or in addition to, propane.
What Citizens Can Do
- Call the non-emergency number of your local sheriff’s department if you need the location of a local warming shelter or other local resources. As always, call 911 for an emergency.
- Check on friends, neighbors and loved ones to ensure everyone has a warm place to stay.
- Call toll-free1-866-HEATWIS (432-8947) for information about where you can purchase propane in your area, or to apply for assistance towards your propane heating bill.
To apply for heating assistance through the WHEAP program, go to www.homeenergyplus.wi.gov. Your local agency will determine eligibility for heating benefits based upon your household income, size, and the home’s heating costs. If you are eligible, the WHEAP program will make a payment directly to your fuel supplier towards the cost of your propane. These benefits are available through May 15, 2014. Your local agency will also determine if you are eligible for Crisis Benefits.
- If you leave your home for an extended period, turn off the water and drain your pipes to ensure they pipes do not freeze in your absence.
- If you need assistance with your pet, please call your local warming shelter/human services agency as some warming shelters also offer pet shelter.
- Please donate to the Keep Wisconsin Warm Fund (KWWF) to help those impacted by the crisis. Credit card donations accepted:
- Online at www.kwwf.org/donate
- By phone at 608-333-0809