Lock in propane pricing during summer to avoid price gouging
IONIA, Mich. – It seems ironic to debate the pricing of propane for this winter, but according to gas companies like AmeriGas and the Michigan Propane Gas Association, summer is the time to lock in propane rates.
“Buy propane when it’s cheap and it’s right now,” said Joe Ross, a representative with the Michigan Propane Gas Association.
Ross told FOX 17 that it is just as smart for consumers as it is for retailers to lock in prices for propane for the upcoming winter during the summer when the gas demand is low. This helps ensure that Michigan has a strong source of propane Ross added.
AmeriGas Director of Corporate Communications Kate Stickel said customers should shop around and then establish their supplier early. Many gas companies like AmeriGas offer a voluntary premium program for customers to lock in a lower rate for propane fills throughout the winter.
Yet several Ionia families who rely on propane told FOX 17 that as they shop around in July the prices they are finding are disturbing.
“I can’t imagine how horrible feeling it is for a family with children to worry that they’re going to run out of gas for heat because they cannot afford to pay their Rural bill,” said Rebecca Speer, a Montcalm County resident.
Speer told FOX 17 that last winter alone she and her family burned 799 gallons of propane; and for the last 20 years they have bought their propane from AmeriGas/Rural in Ionia. But, when Speer got the annual letter from AmeriGas asking if they would like to lock in their rate for this winter, Speer said it made her decide to keep shopping.
“We got this letter from AmeriGas saying we had to spend $99 to freeze our price at $2.71 a gallon,” said Speer. “So I called around and everybody else is paying $1.89 a gallon, and AmeriGas’ new customers are only paying $1.499 a gallon.”
When Speer went to her local AmeriGas office and asked the company to waive the $99 lock in fee, or to receive the new customer rate of $1.89 per gallon, AmeriGas said no. Speer said AmeriGas did offer to lower her rate to $2.59 per gallon, but a savings of $.12 per gallon did not satisfy Speer.
When FOX 17 spoke with Stickel, she said that the introductory new customer rates are only available for new customers. However, Stickel encouraged customers like Speer to visit their local office to negotiate rates.
As for the $99 fee to lock in the propane rate for the winter, Stickel said this is a voluntary premium program: AmeriGas can guarantee customers propane throughout the winter season, and at a lower rate, if customers lock in because of a lower demand during the summer.
Speer still shook her head.
“I’m paying almost a dollar more if I paid them this $99, which we’re not going to do that,” said Speer. “We’d like to get our price down to the $1.899 just like the all the customers that they have now.”
For customers still shopping around, gas companies like AmeriGas suggest also considering a pricing plan. For example, lock into a guaranteed price then pay a monthly propane bill, or buy an annual number of propane gallons in advance.
Finally, gas companies remind customers to look into a company beyond their price per gallon, and evaluate the company’s service and reliability.
“What we’re excited about is we’re getting more calls than we ever have from homeowners that want to buy their propane cheaper, right now in the summer, and lock into a good price,” said Ross.
Also, to save more money, Ross said to look into making your home more energy efficient.
“We love to teach people how to use less of our product. So sealing the home is the smartest thing you can do,” said Ross.
For specific tips on heating and energy efficient tips see http://www.heatingmyhome.org
If you feel like you have been scammed or that a propane company is violating the Consumer Protection Act, call the Attorney General’s Consumer Protection Division at (877) 765-8388, or file an online complaint at http://www.michigan.gov/ag