Slide 17 of 27

Much of the residential heating use of propane occurs in the Midwest, which is why a typical Midwestern consumer is shown in this slide. This consumer’s average winter prices will vary slightly from the national average as a result of slightly different usage.

Like distillate consumers, propane consumers will likely see higher heating bills this winter. The average homeowner in the Midwest can expect their winter bill (from October through March) to be about $50 higher this year over last if normal weather occurs. Average propane price would be slightly lower than last year, but usage would be almost 10 percent higher.

With 10 percent warmer weather than normal, usage would fall closer to last winter’s levels, but the price of propane would be lower. In this case a household in the Midwest might spend about $50-60 less than they did last winter. However, chances of a this warm weather scenario occurring are below 50 percent.

If we see 10 percent colder-than-normal weather, this household could pay as much as $160 more than last winter as both price and usage will be higher. Notice that even in this case, total costs would remain below those experienced in 1996/97 when the severe cold in the Midwest coupled with low stocks drove prices very high.