Propane Supply Update from Eric Osterhaus, VP of Energy

We received news today that the western leg of the propane pipeline will be going on allocation starting tomorrow morning at 7:00 am. The eastern leg has been on allocation for over a week now already. I would like to give some info on how this works. First off, there is absolutely nothing to be concerned about from a consumer perspective. We have gone through this every winter for about the last four or five years, and we have never had a problem being able to get enough product to take care of our customers.

Being put on allocation is not because of low supply. It is because haulers from all different places end up coming to the terminals we pull out of because, like I mentioned above, the eastern leg pipeline has been on allocation for a week. This causes a bottleneck on the "normal" haulers getting product. So, they put us on allocation to deter those other haulers from being able to pull propane from the terminals that we pull from.

Ag Partners buys propane from four different suppliers. Because we are diversified in our purchases from this many companies, we get allocation loads from each supplier. The more that we purchase throughout the year, the more loads we will receive. We are one of the larger buyers of propane in this area, so we will receive more than enough loads each day to keep our supply of propane moving out to our customers.  I am diligently working with our suppliers at this time to ensure that our schedule of when we can pull loads is adequate and that we are delivering those loads to our bulk plants as needed.

I want to assure all of our customers that there is no reason for concern. All of our Auto-Fill customers are set up on monitors that give us a level reading each day and also provides data to measure how many gallons per day each tank is using. Based off this information, our routing software knows when we need to fill your tank. We have our system set to route trucks to our Auto-Fill customers when their tanks are between 17%-27%. For reference, on the high side, a residential home could use 8-10 gallons of propane per day. That's based off of whether the house is well insulated, how big the house is, what appliances are being used, etc. Additionally, a high majority of our customers have a 500-gallon tank. At 20% full, that is 100 gallons. So at 8-10 gallons per day (on the high side), that is enough propane to last you 8-10 days before running out. Our promise to you is that we will definitely get your tank filled before you come close to running out.