Propane customers concerned over pre-buy contracts

Propane customers concerned over pre-buy contracts (Image 1)

Over the last few days, Debbie Lowhorn of Albany, Ky. has not been able to find comfort in her own home due to the cold weather.

“We turned the heat down to 65 and ran an electric heater in our bedroom,” said Lowhorn.

She thought she was planning ahead when she spent more than $1,300 for 800 gallons of propane last summer for a reduced price.

However, when she recently reached out to Tri County Propane Gas to redeem her last 200 gallons, she was told they suspended pre-buy deliveries until further notice and customers could only purchase 100 gallons of propane at the current market price.

“What I can't understand is if they could bring me 100 gallons at $3.599, why can't they bring me the 100 gallons I already paid for at $1.699,” Lowhorn questioned.

Lowhorn and her neighbor, Norma Ferrell, who is also a propane customer and shares the same concern, both reached out to Tri County Propane Gas several times to find out why the company was not honoring the pre-buy prices.

They said they could not get a straight answer from management.

“It's just wrong,” said Ferrell.

News 2 went in search for answers at their nearest Tri County Propane Gas distribution center in Celina, Tenn.  The receptionist referred us to Tri County Propane Gas' parent company, United Propane Gas.

In an email from the company's spokesperson, UPG temporarily suspended the pre-buy program due to the current national propane shortage.

They said customers were notified upon ordering gas beginning January 25.

However, according to their talking points, UPG is expecting to continue to honor the pre-buy program at the price customers paid “by February 15 when the company predicts a leveling out of price and availability.”

The spokesperson also referred News 2 to the pre-buy contract, which explains the conditions. It reads, in part:

“Should corporation be prevented from fulfilling its obligations under this agreement by fire, riot, war, act of god, failure of transportation facilities, supply or pipeline allocation, delays at terminal loading facilities, inability to receive from its suppliers or carriers the propane secured pursuant to this agreement for customer, or any cause beyond reasonable control of corporation, then corporation's obligations hereunder shall be suspended while such condition exists. If customer desires to purchase propane during any period when corporation is prevented under these conditions from receiving the volumes of propane secured by this agreement, customer acknowledges and agrees to pay corporation's current non pre-buy price at time of delivery.”

Lowhorn, who is a math teacher, feels she is not being treated fairly.

“What kind of a lesson will I teach my students if I will allow someone to charge me twice when I've already paid the price,” asked Lowhorn.

UPG ultimately released an official statement that said:

“United Propane Gas will honor all contracts including pre-buy contracts.  Customers will get their gallons at the price they paid for them, however due to the national propane shortage we are waiting for the gas to be shipped.  Pre-buy contracts are kept separate for accountability, and the procedure in case of a suspension is described fully in paragraph five of the contract.  We are working around the clock to service all customers and that remains our priority.”

The Kentucky Office of the Attorney General released the following statement about United Propane Gas:

“The Kentucky Office of the Attorney General has received many complaints (the majority of these complaints involve customers of UPG or its subsidiaries) related to increased prices on prepaid propane contracts. The complaints are currently being entered into our records for review. After obtaining the necessary information to determine whether any laws have been violated, our Office of Consumer Protection will make a decision as to whether any legal action is warranted.”

The Tennessee Attorney General released the following statement regarding United Propane Gas:

“This office has received complaints regarding United Propane Gas via the Division of Consumer Affairs in the Department of Commerce and Insurance, and we are actively looking into these complaints among others.  We encourage people that have complaints regarding this company or any other business to contact the Division of Consumer Affairs, inside TN at 1-800-342-8385 or at”  

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