New Mexico sets Propane Regulations, No One Happy

New Mexico establishes its first regulations for propane dealers, one of only a handful of states to set them. (image: Urban Land Institute)

The state consumer rights commission in New Mexico has passed its first regulations on the propane industry, according to a story in the Santa Fe New Mexican this weekend.

The new rules require propane dealers to give their customers a detailed price report. Though another measure that consumer advocates pushed for — emergency “cross-fill,” allowing any distributor to fill a competitor’s tank during a big snowstorm — was scrapped.

Still, propane dealers aren’t happy about the regulations. They had pushed against the cross-fill measure, saying related “safety issues” could cost them their insurance. And they argued against the cost of new regulations.

The rules are set to go into effect Dec. 15. They will require dealers to “provide customers with clear, accurate, and timely prices and charges” — specifically a full enumeration of monthly charges. And they urge dealers to provide year-round billing plans, including to delinquent customers.

The commission also ended a minimum order requirement of 100 gallons per delivery.

“Propane companies are saying we went too far and [consumers] are saying we didn’t go far enough,” the chairman of the Public Regulation Commission told the New Mexican.

One propane dealer said he anticipates parts of the new rule will be appealed.

Have a look at the Final Rule, which was passed in November, here.

New Mexico has about 100,000 propane customers, many of them sprinkled around rural parts of the state. They are one of the few states (the New Mexican says four) to regulate the propane business, including Maine.

The issue of propane regulation continues to chafe both dealers and consumers.

The National Propane Gas Association opposes state controls on dealers, arguing that propane is not a public utility and should not be regulated like one. Though consumer rights groups have argued that without oversight, customers have no recourse for unfair billing or dicey business practices.

New York, which does not regulate its propane trade, was the site of a dramatic flare-up between a customer and a dealer this summer. A man named Shawn Corcoran tried to cancel his service when he learned he was paying his dealer “several dollars” more a gallon than the going rate. The dealer, Suburban Propane, told him there would be a $216 charge for picking up his tank.

So he pulled out his tank and deposited it at the Suburban Propane office himself.

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