Bill would give PSB authority over propane
By Bruce Edwards
STAFF WRITER | February 10,2013
A House bill aimed at reining in what a lawmaker says are unreasonable practices that put propane customers at a disadvantage would place the propane industry under the jurisdiction of the Public Service Board.
H.96 is co-sponsored by Rep. Paul Poirier, of Barre, who said his past attempts at reforming the industry’s practices have not worked, leaving regulation by the PSB as the only alternative.
A related bill, H.94, would help consumers get a handle on heating fuel prices by mandating that fuel dealers report their prices daily to the Department of Public Service, which would then post the prices on its website.
Both bills are opposed by the Vermont Fuel Dealers Association.
Poirier, an independent, said that unlike heating oil customers, who own their own fuel tanks, most propane customers lease their tank from the propane company. He said that makes a propane customer a captive of the propane dealer, effectively preventing customers from shopping around for the best price unless they switch companies and have the tank removed. He also said it was unreasonable to add a $150 service charge for an emergency delivery, or to charge $50 to light the pilot.
“So before they drop a single bit of propane into your tank you owe them $200,” Poirier said of customers who run out. “Plus they only come if it’s a minimum of 100 gallons.”
He said the cost is especially burdensome for low-income Vermonters.
Poirier said he has attempted to persuade propane dealers to change policies and fees, without success.
“So that’s why I put in my bill to put them under closer regulatory (oversight) and I gave it to the Public Service Board because they’re the energy people,” Poirier said.
The view from propane dealers is that the industry in the state is already the most regulated in the country, said Matt Cota, executive director of the Vermont Fuel Dealers Association.
As an example, Cota said legislation two years ago barred dealers from charging a fee for taking out propane tanks, making it easier for consumers to switch dealers.
“In Vermont, unlike any other state, propane dealers cannot charge any fees when someone wants to leave and choose a different company,” he said.
Consumers do have the option of buying their own propane tanks. But Cota acknowledged that, as tanks cost an average of $2,000, most customers choose to lease.
As far as fees associated with unscheduled or emergency deliveries, Cota said they are justified.
He said those fees apply only if a customer is on a “will call” delivery basis. Automatic-delivery customers who run out of fuel are not charged. Cota said “$150 is a bargain” for sending a driver out in the middle of the night to make a delivery when someone is out of fuel.
For will-call customers who run out of propane during normal business hours, Cota said, “there might be a charge related to that, not in all cases, but in some cases.”
A bill that Poirier introduced last year, but never advanced, would have barred unscheduled delivery charges and limited the out-of-service charge to $50.
“Well, 50 bucks doesn’t pay to get the guy out of bed,” Cota said.
Co-sponsored by Rep. Janet Ancel, D-Calais, bill H.94 requires the Department of Public Service to post the average daily price for each retailer and petroleum product sold, including price plans for cash, prebuy, fixed or price cap.
The bill also requires anyone who owns or leases primary storage facilities to file with the department data concerning storage, inventory and product receipts.
Based on her own experience, Ancel said it was extremely difficult calling around dealer to dealer to find the best price for heating fuel. She also said the dealers have their own definition for various price plans, whether prebuy, fixed, etc.
She said it’s important for consumers to have as much easily accessible information as possible so “they can make the best use of the money they have.”
Ancel’s proposal to require daily price reporting by heating fuel dealers is unworkable and unnecessary, according to Cota.
“While that might seem to some innocuous or not too laborious, rest assured it is neither,” Cota said. “To have each individual retail outlet report prices to the state requires a tremendous amount of work both by state employees, taxpayers dollars, and by individual retail outlets.”
He said such a mandate would involve more than 200 retail heating fuel dealers that serve Vermont, including dealers in border states of New Hampshire, New York and Massachusetts.
Cota said the Department of Public Service already tracks a sampling of all fuel prices, including gasoline, on a monthly basis and posts it on its website.
Although the department’s monthly report does not break out prices by retailer, Cota said it still has some value for consumers.
“That gives consumers a good indication of where prices have been and where they’re going,” he said.
Cota said what’s needed is a better job of promoting the monthly fuel price report to the public.
But Ancel said with fuel prices changing daily, the state’s monthly report falls short in providing useful information. And she said the monthly report is not dealer-specific but offers only an average statewide price.
“To make a really smart buying decision, you need to know what the price is actually going to be for you from the dealers in your delivery area,” she said.
Ancel also said with so much computer automation available today, gathering pricing information on a daily basis shouldn’t be that difficult or time consuming.
Both bills have been referred to the House Committee on Commerce and Economic Development.