Supply and demand dictate price of all energy - Star Exponent: Opinion

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Thursday, October 23, 2014

Supply and demand dictate price of all energy

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Posted: Tuesday, March 25, 2014 12:00 am | Updated: 8:07 am, Tue Mar 25, 2014.

Mr. Calhoun's article "Propane a rip off or good value for heat" was a good starting point for understanding the price and value of all energy sources available to home owners. Having worked for Rappahannock Electric Coop for fifteen years and multiple years experience with three of the local propane suppliers, I would  like to offer additional information that impacts your energy costs, especially propane.

First, the propane companies are not utilities; therefore, governmental bodies have no regulatory authority over these independent businesses. Mr. Calhoun's call for governmental bodies to get involved in price control is misguided and a bad idea. With at least six propane suppliers from which the consumer can choose, the free market system will control service and price.

Even though many contractors deal primarily with only one supplier, the customer as the right to do his homework and select the supplier of his choice. If you purchase a house with the propane tank already in place, you still have the right to buy the tank as Mr. Calhoun correctly states. Then you can sell your tank to your preferred supplier who will then have the exclusive right to service your tank.

No other supplier can service that tank because of safety and liability reasons. Even if you decide to maintain ownership of your tank, you must have a "Gas Check" performed each time you switch suppliers for a propane fill up. Therefore, it is better to do your due diligence when selecting a supplier to avoid the approximate $85 "Gas Check" each time you switch suppliers.

Mr. Calhoun mentioned the Haz Mat and fuel recovery delivery fees. Only one local supplier charges this fee that was added following the 911 Attack. The fuel recovery fee is simply a delivery charge to offset the supplier's fuel costs.

Second, this has been the coldest winter in approximately twenty years. Regardless of one's fuel type, all energy consumption has increased dramatically. Personally, I have used 200 gallons more propane than prior years. Have you checked your electric bill this winter? Your fuel oil bill? Even people who burn wood have experienced a substantial increase in the amount of wood burned.

Now, for the real culprit in elevating energy cost is the federal government's regulatory policies and failure to encourage energy independence. The Keystone Pipeline should have been approved five years ago. But instead, the Obama Administration is using it as a political football. It is a proven fact the the US has more energy reserves than the entire Middle East.  However, our energy policy remains focused on expensive and failed solar projects.

Propane comes from crude oil and natural gas. Without an ample supply of those fuels, propane prices will continue to be determined by the supply and demand of crude oil and natural gas.

Everyone prefers clean renewable energy sources, but until that technology is developed this country must utilize all available energy; coal, oil, oil shale, nuclear and natural gas to get us to that point years down the road. Without this common sense approach to energy supply, brace yourself for outrageous energy prices.

The ultimate burden rests with you, the consumer, to do your research before selecting any energy supplier. I recommend that you act now while you have the high energy bill in hand. Experience has shown that people will complain when they receive the bill, but will not take any action because they see warm Spring temperatures on the horizon. They won't think about the high energy costs until next winter when the cycle repeats itself.

Act now, it's easier than you think to get a more favorable propane supplier. The supplier will be eager to help you through the process because they are competitive and want your business. You will be glad you made the change, and mad at yourself for not making the switch years ago.

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