Another Propane Heating Season for the Records

Published by Bob Hance on Thursday, March 8, 2018 in Propane

MEC 30,000 gallon propane tank

Today is a snow-globe kind of day. The snow is gently falling to the ground, creating a beautiful view from my second story window. I was mesmerized by the scene, then jolted back to reality as a huge transport truck drove through the gate and pulled up to our three 30,000 gallon propane bulk tanks. It was a good jolt as the delivery means we can keep our customers well served for another day. That isn't necessarily the reality for many other propane retailers.

The 2017-18 winter heating season will go down as another volatile period in the propane industry. Mother Nature hit hard and fast and sent much of the country into a deep freeze, increasing the demand for propane. Most wholesale propane is trucked through a national transport delivery system, and the increased demand strained that already fragile system. Fortunately most of our supply is stored right here in Michigan, a great advantage of our approach to service.

You probably remember those days right after Christmas and into the new year, when we were lucky to see temperatures above zero. From November and through the early part of January we delivered about 500,000 more gallons of propane than we planned. I have great respect for our hard-working operations team, who faced these brutal conditions and worked long days and many Saturdays to make sure our customers stayed cozy and comfortable.

Supply is one important factor that differentiates us from the competition. Capped-rate pricing is another.

We started to see the slow and steady increase in competitor pricing way back in October, long before the temperatures took their seasonal nosedive. The U.S. Energy Information Administration reports the average retail price of propane in Michigan was $1.88 per gallon in early October. That quickly escalated to $2.19 per gallon by mid January. It's a predictable pattern among most propane retailers: as temperatures decrease, gas prices increase.

We established our 2017-2018 capped rate of $1.599 per gallon back in May 2017, and will hold that price until May 31, 2018. That rate is provided without additional fees or charges; it's the way we've done business for nearly 20 years and the reason we are now 6400 customers strong.

We don't sell just a commodity; we provide peace of mind and stability in the midst of volatility. Heating bills were generally higher this past winter because it was just darned cold and people burned through a lot more gas, not because we took advantage of conditions and raised our prices. We provide a unique experience, and it's one of the many reasons our customers stick around and trust us as their propane partner. And we appreciate that!

The post Another Propane Heating Season for the Records appeared first on MEC.

About The Author

Bob Hance

Bob Hance is the President/CEO of Midwest Energy & Communications.