Are Propane Companies Regulated?

why the propane industry is not regulated like utilities

From time to time, a debate emerges over whether propane companies should be subjected to further regulations, such as being placed under the jurisdiction of state public utility commissions (like your natural gas, electric and water companies).

First, it’s important to emphasize that the propane gas industry is already highly regulated at the state and local levels. The National Propane Gas Association (NPGA) works closely with state officials and state propane gas associations across the country to ensure that the safety and reliability of propane gas service does not become compromised. Additionally, existing fair trade practices and similar measures can be used to address problems that may arise.

Local companies, not utility monopolies, deliver propane

According to the NPGA, the public utility model should not be applied to propane delivery service for a number of reasons.

For starters, unlike the utility companies, propane dealers are private businesses that do not operate as monopolies; they are not franchised by the state to work exclusively within a service territory awarded to them. That’s why propane companies should not be subjected to price regulations—in the same way that other products are not regulated, including fuel oil, gasoline, food and clothing.

Right now, propane customers remain free to shop around for a propane gas dealer that offers them the best price and service. Monopolizing propane companies and forcing them to play under the same rules as utilities could easily result in chaos, and adversely affect the quality of propane service that North Carolinians have come to rely on.

Propane already has a lot of federal oversight

Although the propane industry is not regulated like a utility company, it’s still subject to oversight by many federal agencies. Here are some significant facts regarding propane’s federal regulation:

  • The U.S. Department of Transportation (DOT), the Occupational Safety & Health Administration (OSHA) and the U.S. Department of Energy (DOE) all provide oversight for propane.
  • Within DOT, the Pipeline & Hazardous Materials Safety Administration (PHMSA) and the Federal Motor Carrier Safety Administration (FMCSA) regulate the transportation of propane.
  • OSHA and DOT both oversee employee training and emergency procedures with regard to propane.
  • The DOE enforces energy efficiency standards for propane-powered products, including home heating and water heaters.

These federal actors play a major role in shaping how propane businesses operate, Additionally, the NPGA is committed to working with its members and government agencies to develop and refine its safety codes and procedures.