Town Hall On Heating Bills Will Be March 18

Corporation commission to hear propane complaints


The Arizona Corporation Commission will hold a town hall meeting at the Payson High School Auditorium on March 18 at 6 p.m. in an effort to determine whether SemStream has done enough to help residents cope with staggering propane price increases that have doubled or tripled some homeowners' bills since last winter.

At least three members of the statewide commission that regulates utilities will attend and make opening remarks at a meeting expected to last for several hours, said Rebecca Wilder, a spokesperson for the commission.


Larry Payne, president of SemStream, explains a Payson propane bill.

Anyone who wants to speak can fill out a public comment card at the front door. In addition, the commission will accept written comments and letters to the commissioners, said Wilder.

The meeting will give customers a chance to talk about the impact of the high winter heating bills, which company officials have blamed on sharp increases in propane prices nationwide and a longer-than-normal billing cycle caused by illnesses affecting company meter readers.

Mayoral candidate Kenny Evans has called for an investigation into SemStream's billing, dating back to July when he noticed a sharp increase in several surcharges on the bill.

Those surcharges are intended to help the company recover the cost of spikes in the price of propane without going through the time-consuming practice of adjusting the regulated base rate.

Just before SemStream bought the company from Energy West, the commission approved a request to increase the amount allowed under those surcharges to the maximum.

Evans and other critics have questioned that decision and raised questions about whether the local company's relationship to its national, multi-billion-dollar parent company has affected local bills.

However, Mayor Bob Edwards has accused Evans of politicizing the issue -- which the council can't do anything about anyway.

SemStream officials say they welcome the hearing and the chance to explain the impact of the relentless rise in propane prices nationwide.

SemStream President Larry Payne has said the surcharges on the bill produce no profit for the company, which is restricted by the commission to about 10 percent of the company's overall investment.

The company's profits aren't affected by the per-therm charge to the customers, but are affected when high prices cause customers to use less propane. In fact, the company still has $800,000 in unrecovered charges it paid for propane whose cost increased faster than the surcharges.

Commissioner Kristen Mayes had sent SemStream a letter asking for answers to a list of questions centered on whether the company had done enough to help customers cope.

SemStream Arizona Propane President Douglas Mann, in a March 3 response to Mayes' request, observed that half of the propane used nationally is a by product of crude oil production, so the cost of the natural gas has closely followed soaring oil prices.

Moreover, he noted the company has hired an extra meter reader to ensure that customers don't again face an extended billing period. A wave of sickness that took out several company meter readers in December resulted in some customers getting bills that covered 39 days, which amounted to a 26-percent increase in the bill for that month. SemStream has apologized for that problem, which compounded the impact of the rising surcharges.

Customer assistance actions Mann cited include:

Directing customers to a local office of the Community Action Program that can provide assistance to low-income customers.

Helping customers set up a program that lets them pay an average monthly bill, which reduces spikes in the winter months.

Setting up payment plans with individual customers.

Averaging charges allowed as part of the purchase gas adjuster to spread the impact of price increases out over the year.

Delays in recovering excess fuel costs that amount to a loan to customers.

Contracting for storage facilities so the company can buy propane more cheaply in the summer and then use it in the winter.

Taking advantage of the purchasing power of the national parent company to get the best possible price for the two million gallons of propane the company buys daily. The Payson operation is the only regulated consumer company SemStream owns.

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