Fuel Buyers Coop can save you money

Olaf Meyer brought up what made him feel good this past winter. He was talking at Woodstock’s Meals on Wheels appreciation luncheon May 1 and wanted to share how much he’d saved on fuel by joining the Mid-Hudson Fuel Buyers Coop, whose board he joined after signing up for “windfall” savings just before the start of the 2017-18 heating season last summer.

He and his five fellow board members at MHFBC, which is in the process of formalizing its nonprofit status, are looking to share the savings they’ve been getting by cooperatively negotiating prices for fuel oil, propane and kerosene with as many as possible. Currently, they’re at just under 200 members.

For the cold season now closing (hopefully), the coop negotiated a deal with Kosco/Paraco that priced fuel oil at a variable cost of $.30 over the day of delivery wholesale price, capped at $2.099 a gallon with no minimum gallons. Propane was set at a fixed price of $1.39 a gallon with no minimum required excepting that one’s tank be 60 percent empty, with no delivery charge. Kerosene costs were set at a variable price of 40 cents below day of delivery retail price.

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For comparison’s sake, that’s all much lower than prices on June 12, 2017 that saw regular customers paying upwards of $2.58 a gallon for fuel oil, a range of $2.14 to $4.37 for propane, and $3.26 for kerosene, versus $2.96 a gallon for coop members.

In addition, all service plans were granted a $100 discount, a 10 percent discount on propane tanks, furnaces and water heaters purchased through Kosco/Paraco, and discounts on home monitoring systems. There were no fees for downside protection, capped prices, or for budget plans, no prepayment requirements, and e-billing for all who wanted it. And HEAP customers were accepted without question.

“I made money back selling my tank back to my previous supplier,” Meyer said. “It was a $220 windfall!”

“Sometimes we lose members who work out an individual deal with their fuel supplier, not needing us anymore,” added Meyer’s fellow MHFBS board member, Gai Galitzine of Kingston. “That’s fine with us. We exist for two reasons: to negotiate deals with local fuel suppliers for people to share, and to promote conservation and energy sustainability as best we can.”

The Mid-Hudson Fuel Buying Coop (MHFBC) was formed in the fall of 2013 to purchase fuel products and services at discounted rates. But it got its start much earlier, when the coop’s co-founder, Fay Loomis, moved to the Hudson Valley from California and realized how expensive it would be balancing higher taxes with much higher fuel costs than she was used to.

That’s when she started paying attention to the great fluctuations in propane costs — based on ownership of tank, its uses in the home or business, and one’s history of use. From there, she figured all fuel prices might be better negotiated.

“I wondered whether local fuel companies would allow a fuel buying coop,” Loomis said, speaking about MHFBC’s origins in an interview before last summer’s 2017-18 fuel negotiations commenced. “That first season I got things rolling 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, although now there is a large one, the Citizen Action Fuel Group out of Albany, that’s currently offering service in 25 counties in New York State, plus one in Pennsylvania.

“When I’d ask fuel companies if they could work with a buyers’ coop they’d say yes but not explain any further,” Loomis added, noting how most such entities involve existing organizations such as colleges, and 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.

“We renegotiate each year by sending out a list of questions to fuel suppliers around the region to open a bidding process,” Loomis further explained. “We evaluate offers and then go back and forth with company representatives until something comes forth that matches our criteria.”

 

Negotiating for coming year

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 and energy sustainability, 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.”

Communication about MHFBC’s low rates has been largely word-of-mouth to date, with the entity’s six member board maintaining a Facebook page in addition to its listserve. While a majority of its membership is in Ulster County, where the Rondout Valley area around Marbletown and Rosendale has been their bedrock since starting their, they’ve noticed growth in Kingston and Woodstock, as well as Dutchess County, and are looking to expand into Columbia and Greene counties, where their current negotiating partner, Kosco/Paraco, covers.

In recent email press releases, the Mid-Hudson Fuel Buying Coop announced that it has begun negotiations for products and services for the 2018-2019 heating season with local suppliers serving Ulster, Dutchess, Greene and Columbia counties, including their 2017-18 supplier. Potential suppliers have been requested to provide discounted prices for oil, propane, kerosene, propane tanks, equipment and maintenance contracts. An agreement with the chosen supplier is expected to be finalized and released to potential members in early June for the coming heating season.

Those wishing to join the coop at $10 a year must fill out an application which Galitzine described as “rather complex,” which then gets forwarded to suppliers as part of the coop’s negotiations.

For further information, check out their Facebook page at https://www.facebook.com/groups/MidHudsonFuelBuyingCoop/, email mhfbcoop@yahoo.com, or call board member Bill Miller at 845-332-5922.

Why not prepare for next winter with some strong savings, and a bit of cooperative spirit, now?

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