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County plans to switch propane vendor for transfer station tanks to cut fuel costs, staff says
Summary
Staff proposed replacing the county's longstanding FerrellGas lease with a SEK Co-op tank lease and one-year price lock that would reduce propane costs substantially based on 2024 usage, and asked commissioners for authority to proceed.
Staff reported to the Franklin County Commission on Feb. 12 that the county likely can save a substantial portion of its 2024 propane spending by switching providers at county facilities.
What staff proposed: Peg (transfer-station operations staff) told commissioners that the county previously purchased propane under a tank lease agreement with FerrellGas but that recent loads cost about $3.30 per gallon. She said she contacted MFA and SEK Co-op; SEK offered two new 500-gallon tanks with an annual tank rent of $130 each and a one-year price lock that would have provided propane at $1.55 per gallon through July 31, with the co-op keeping tanks full on a keep-full basis.
Costs and savings: Staff said the county used about 12,195.2 gallons in 2024 and that switching under the quoted SEK price would save roughly two-thirds of last year's propane cost including tank rent. SEK cannot deliver tanks until March, staff said, and the arrangement would be renewed annually; staff said the county had submitted paperwork and SEK had approved proceeding but the county was not yet contractually bound.
Next steps and operational notes: Staff requested authorization to exit the county's FerrellGas arrangement and move forward with SEK, with the understanding the county can revisit pricing in July when new annual pricing would be set. Support staff said SEK would recover any remaining propane in existing tanks and transfer it to the new tanks during installation.
Commission action: Commissioners did not record a formal roll-call vote on the propane vendor change at the Feb. 12 meeting; staff asked for authority and indicated they had preliminary approval from SEK and would finalize details if the commission concurs.
Context: the county uses propane for transfer-station operations and forklifts and also uses an oil heater in the recycling building; staff said oil usage runs about 115 gallons every two to three weeks during cold weather.
