Government (in)action

Propane price spikes in two of the last three winters had unhappy constituents from the 4.6 million propane-dependent households chewing the ears of their Congressional representatives for help.

In response, Congress last winter ordered the U.S. General Accountability Office to study the factors that impact residential propane price volatility and suggest options to help customers mitigate those fluctuations. GAO was also told to assess the federal government’s role in the propane market.

The results of its study are in, and the GAO concluded:

• Potential options to help consumers deal with price spikes include programs to pre-buy propane at fixed prices. Use of those tools has been mixed over the years, however, with low participation overall. The options are not available in some markets, and many consumers are not able to afford to pre-buy supply.
• Energy assistance programs can help these consumers, but federal funding has declined and the timing of its availability does not allow participation in price stabilization programs.
• The Energy Information Administration should study improving the propane market information it provides – including performance data on price stabilization options.
• At least nine federal agencies are involved to some extent in various aspects of the propane market, yet oversight has been insufficient. Specifically, the GAO recommends that the U.S. Departments of Commerce and Energy provide more active oversight of the Propane Education & Research Council to be in a better position to recommend appropriate programs and activities.

The report says federal oversight of the PERC has been lacking – and in some cases, non-existent. The Department of Commerce is required to prepare two reports: an annual analysis of changes in the price of propane relative to the other energy sources and a semi-annual examination of whether the council’s activity has impacted propane consumers. Department officials say no reports have been done because they were unaware of that responsibility.

The Department of Energy is supposed to oversee PERC’s annual budget, make program recommendations and monitor reports on the council’s activities, compliance, violations and complaints. Yet the DOE has not conducted any reviews, made any recommendations or taken any other action to determine whether industry assessment costs are being passed on to consumers in violation of federal law.

“It is not clear what impact, if any, the federal government could have on the propane market through its oversight of PERC operations because the federal government has not provided active oversight,” the report concludes.

Given the shoddy performance of these bureaucratic agencies to date, it should be obvious that Congress can best help consumers by keeping government as far away as possible. But then lawmakers wouldn’t be able to tell disgruntled consumers that they are working on the problem.