As air conditioners start to hum in some of the region’s warmer spots, families are hunkering down trying to figure out how to lock in fuel prices for the coming autumn and winter. Some are looking at moving from oil to propane; if they’re in areas where it’s offered, many are shifting to natural gas. Just last week Google announced a new startup called Dandelion that’s planning to roll out affordable geothermal heating and cooling systems using a new drilling system…with its first marketing concentration on the Hudson Valley.
Yet as happens when people start thinking of winter fuel costs in summer, the numbers getting bandied about are all over the map. And given the ways in which localized fuel companies have gotten swallowed up by regional and national entities, it’s become ever-more-difficult to get a firm grip on exact figures.
We’re hearing of one company, based out of the Midwest now, offering propane at $1.50 a gallon; another, from farther up the Hudson Valley, is pricing at $3 a gallon; and yet another once-local entity now tied to a growing East Coast corporation has been rumored to have prices going up to $6 a gallon.
A call to get a sense of how much this reporter’s propane costs start with a question coming back: “Let’s see what we get here,” followed by a request about what name one’s account is in. “Oh look, things went down a little since your last delivery. You’re now at $4.65 a gallon,” said Jeanette at Amerigas in Catskill on Wednesday. We asked whether we could get a better deal by locking in that price. “I’m not sure you use enough propane,” came her response. “Ooh…you didn’t even come close. There’s a minimum of 300 gallons a year and you were at 100-some.”
“Because of the way that propane is traditionally priced, based on ownership of tank, its uses in the home or business, and one’s history of use, there’s always a fluctuation in cost,” says Fay Loomis, the Rondout Valley-based founder of the Mid-Hudson Fuel Buyers Co-op (MHFBC), which hosts an informational gathering at the Marbletown Community Center in Stone Ridge Thursday, July 20, to introduce its fast-growing fuel pricing lock-in membership program. “Buying propane is cheaper if you can own your own tank, but also if you know how to negotiate with our fuel companies, which is what we do.”
The MHFBC got its start when Loomis moved to the Hudson Valley from California 11 years ago and realized how expensive it would be balancing higher taxes with much higher fuel costs than she was used to.
“I wondered whether local fuel companies would allow a fuel buying coop,” Loomis said. “That first season I got things rolling, four years back, we naively started in September and ended up with only two members. The next year we had 24 members, then 44 and this year we’re over 80 and growing exponentially.”
Loomis added that she didn’t have any other fuel buying cooperatives to use as a model when she started.
“When I’d ask fuel companies if they could work with a buyers’ coop they’d say yes but not explain any further,” she added, noting how most involve existing organizations such as colleges, like Bard, neighborhood groups or associations, such as firefighters. “We decided to charge $10 for membership, which paid for us to start a listserve and online application process, with six members all volunteering to manage the coop.”
Loomis’ success with her fuel buyers’ coop resulted in her getting a flat fee for propane for all her members, plus fixed costs and payment plans, with a 10 percent discount, for purchasing one’s propane tanks.
Their negotiated costs for the upcoming 2017-2018 heating season has prices for heating oil capped at $2.095/gallon; propane prices fixed at $1.39/gallon (with no delivery charge for the season), and similar discounts for kerosene, maintenance service plans and equipment, plus a variety of payment plans and acceptance of any and all subsidized HEAP customers.
According to a Paraco/Kosco customer, its latest offering for locking in a price for next winter’s oil gives you a choice of $2.39 per gallon, prepaid, or $2.29 per gallon with upward and downward protection — won’t go any higher regardless of the price of oil’s fluctuations, and will go down if the price goes lower, although you pay 30 cents per gallon up front for the lower price slide, and it has to be paid upfront. The company also offers a 10 month budget plan.
“We renegotiate each year by sending out a list of questions to fuel suppliers around the region to open a bidding process,” Loomis, of the Buyer’s Co-op, explained. “We evaluate offers and then go back and forth with company representatives until something comes forth that matches our criteria.”
She said that MHFBC went with Bottini its first year and has been with Paraco/Kosco ever since, based on “a good relationship” and the fact that, as Loomis put it, “our negotiation process gets more refined each year.”
Stressing the benefits
Some local companies eagerly participate in the negotiations for a cooperative price, others don’t. According to Loomis, “One major fuel provider said they wouldn’t participate because they ‘didn’t care for the bidding process’ although others said they welcomed the competition.”
Among items that fuel companies like, the coop has added, is the fact that they stress annual maintenance on boilers and water heaters as a means of increasing efficiencies, along with regular free home energy audits provided by NYSERDA and other entities.
“We’re not trying to sell products; we’re just stressing the benefits of getting your heating systems serviced,” Loomis said. “I have talked to senior groups who’ve burst into tears when they realized the savings they could get, joining forces to purchase fuel. I personally saved $784.28 last year.”
Among recent key elements the coop locked in for the coming year: no fees for locking in prices, which average 30 cents per gallon, $100 off the cost of annual maintenance, and a “captive savings” plan that allows members to benefit from savings should actual prices dip below for those they’ve contracted for.
“It fluctuates, you’re billed on the day of delivery, and you never have to pay more than what we negotiated,” Loomis explained about the latter. “On good years that can add up to quite a savings.”
The coop does not include electricity among the fuels it negotiates prices for, referring people to Rosendale-based Citizens for Local Power for those questions and needs.
Also working as a cooperative buyers entity in the region, albeit at slightly less savings, is the quasi-public New York Public Interest Research Group (NYPIRG), whose website keeps updates on new fuel prices in the region. The phenomenon of coop buying is also spreading throughout the Northeast, and even the urban New York City market of late.
As for that Google Dandelion thing (dandelion.co), announced last week: think of purchasing geothermal heating and cooling systems without messing up one’s lawn and home for one third the previous $60,000 cost estimates. But more on that later…
MHFBC will hold its annual “Roll Out the Barrel” potluck 5:30 p.m. to 7:30 p.m. Thursday July 20 at the Marbletown Community Center 3564 Main St, Stone Ridge; learn more by calling 845-657-9764.