Today, Congressman Jason Smith (R-MO) sent a letter to the Federal Trade Commission (FTC) asking for a review of conditions that have led to propane cost spikes in Missouri and much of the Midwest.
“Shortages in the supply of propane and the resulting cost spikes are causing a real hardship for families, farmers, rural schools districts, senior citizens on fixed incomes and small business owners in Missouri’s Eighth District who rely on propane to heat their homes and businesses,” said Smith. “I am asking the Federal Trade Commission to look at this situation to determine if the price increases are legitimate or if the increases are a result of market manipulation or gross mismanagement of reserves.”
Smith’s letter to the FTC is available here. The text of the letter is copied below:
January 27, 2014
The Honorable Edith Ramirez
Chairwoman, Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Dear Chairwoman Ramirez:
The cost of propane is spiking dramatically across the Midwest, and particularly in the State of Missouri. I am writing to ask that the Federal Trade Commission conduct oversight of the propane market in the Midwest to ensure that price gouging and anti-competitive behaviors are not driving these price increases.
The spot price of propane at Conway, Kansas – the main supply point for my district – has recently increased far above the spot price at Mont Belvieu, Texas. While there are considerable supply and transportation issues that may be adding to this large price differential, many of the state and federal regulations causing it have now been waived. I would urge you to find out if opportunistic trading during a natural disaster is mostly to blame. Many of my constituents are reporting that their long-term propane supply contracts are being cancelled – one hopes that these schools, fire departments, family farmers, and homeowners are not being put out in the cold so that market speculators can make a few extra dollars.
As such, I formally request that the Federal Trade Commission conduct oversight of the propane market in the Midwest to prevent possible anti-competitive behavior or illegal manipulation, and to ensure that any supply shortages are not created artificially. I look forward to hearing the results of this oversight.
Sincerely,
JASON SMITH
MEMBER OF CONGRESS
Cc: The Honorable Eric Holder
Attorney General of the United States
The Honorable Ernest Moniz
Secretary of Energy
The Honorable Mark Wetjen
Acting Chairman, Commodity Futures Trading Commission
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