CT Heating Oil Scammer Evades Secret Service
Alleged heating oil grifter Marc "the Oil Man" Cannon. (image: acorn-online.com)
Like every other industry, the heating oil sector has seen its share of theft and fraud over the years. But one brazen thief operating in Connecticut last year pioneered a new scheme that involved bilking heating oil dealers and consumers, and is now the target of a manhunt by the US Secret Service.
Connecticut’s Ridgefield Press reported on Friday that federal investigators are on the lookout for heating oil scammer Marc Cannon, hoping to bring him to justice for an elaborate con that he ran on 50 hapless heating oil users and several fuel suppliers.
Cannon’s alleged con began with the theft of heating oil users’ personal information. He then contacted his victims posing as a heating oil supplier under the apparent nickname “Marc the Oil Man” to offer discounted prices on fuel on the condition of cash payment up front. Next, Cannon allegedly collected cash pre-payments from his victims and used their personal information to arrange heating oil deliveries from legitimate local suppliers. By the time heating oil dealers who had made the deliveries contacted the confused victims to collect payment, Cannon was long gone with the victims’ cash. Cannon has been charged under federal law with wire fraud and identity theft.
According to the Press’ reporting on an affidavit in the Cannon case, federal investigators confirmed the details of Cannon’s crime by arranging a sting operation:
Investigators used a Wilton address to arrange a delivery by Cannon. Cannon then met an agent in New Haven, where cash was exchanged.
Though the Press article does not go into detail, it appears that the Feds’ operation did catch Cannon in the act, but did not apprehend him at the time, as the article also includes a call for tips about Cannon’s whereabouts:
If you have information about Cannon’s whereabouts, or have knowledge of this scheme, call the U.S. Secret Service, New Haven Resident Office, at 203-865-2449.
He was allegedly smart enough to create an elaborate scheme that netted him thousands of dollars stolen from unsuspecting heating oil users (not to mention causing losses to dealers by orchestrating fraudulent deliveries). But with the US Secret Service and authorities in Connecticut and North Carolina looking for him, chances are his heating oil fraud days are numbered.
NJ Delays Enactment of Low-Sulfur Heating Oil Requirement
The Hess Por Reading Refinery in Woodbridge. (image: woodbridge.injersey.com)
The New Jersey Department of Environmental Protection (DEP) has extended the deadline for the state’s oil refiners to produce heating oil with lower sulfur content. Under the extension, New Jersey refineries will have until July 1, 2015 to lower the sulfur content of the heating oil they produce to 500 parts per million, njspotlight.com reported on Thursday.
The DEP granted the extension in response to a request from the Hess oil corporation, which owns a major refinery in Woodbridge, New Jersey. According to NJSpotlight, Hess requested the delay to avoid shutting down its refinery to make infrastructure adjustments and “millions of dollars in unanticipated expenditures.” Calling the cost of upgrading equipment to produce lower-sulfur heating oil “unanticipated,” is somewhat misleading, as the New Jersey DEP began considering the rules in January of 2010 and officially announced them in September of last year. Originally, refiners were required to reduce their heating oil’s sulfur content to 500 parts per million by July 1, 2014 and 15 parts per million by July 1, 2016. The deadline extension granted by the DEP would move the 500 ppm deadline to July 1, 2015 but keep the 15 ppm deadline intact.
According to a courtesy copy of the deadline extension proposal, economic and environmental considerations led the DEP to grant the extension. Hess had argued that the 2014 deadline would require its refinery and other refineries in the state to shut down operations twice in one year, with each shutdown having a negative impact on heating oil supplies, air quality, and refiners’ bottom line. The DEP concurred with those arguments and explained why in the rules proposal:
The Department seeks to implement the interim standard with the least disruption to the market as possible, and to avoid refineries having to undergo two shut downs within a one-year period…Any time a refinery shuts down and restarts, there is an increase in emissions of air contaminants above what is emitted when a refinery is operating at a steady or continuing state.
Giving refiners an extra year to work sulfur-reducing maintenance of their facilities into scheduled shutdowns would be less disruptive to refining operations and regional heating oil supplies, the DEP reasoned.
Another argument in favor of the extension made by refining industry lobbyists, according to NJSpotlight, is that other states in the region such as New York will have already implemented 15 ppm sulfur limits by 2012, which will encourage refiners throughout the region to switch to the ultra-low-sulfur fuel sooner rather than later. Furthermore, they argued, compliance with the 500 ppm target would lead to production of heating oil that could be sold and used only in New Jersey but would contain too much sulfur to be sold in other Northeastern states. This implies that refiners, when they do comply with the low-sulfur mandate, will skip the 500 ppm step and go directly into production of 15 ppm heating oil. The DEP proposal clearly encouraged refiners to take that approach:
The Department urges all refiners to add the capacity to remove sulfur from fuel oil and achieve the 15 ppm sulfur content standard at the earliest possible date.
Assuming the arguments for the delay in the 500 ppm standard made by the industry and accepted by the New Jersey DEP are accurate, its net effect on heating oil dealers and consumers should be positive. Under the restructured deadlines, users and dealers should be able to reap the benefits of ultra-low-sulfur heating oil (greater heating efficiency, less heating system maintenance, fewer emissions) sooner, and without any interruption of supplies or major price increases.
Heating Oil Price Rise Continues in Maine, but at Slower Pace
Sunrise over Belfast Harbor, in Penobscot Bay, Maine. (image: gafia.com)
Following two weeks of double-digit increases in the statewide average price, heating oil prices in Maine slowed their climb last week. According to the Maine Public Broadcasting Network, the Maine Governor’s Office of Energy Independence and Security (OEIS) announced on Tuesday that the state’s average price rose two cents to $3.67 a gallon.
OEIS director John Kerry attributed the most recent price increase to unrest in the Middle East, and noted that the effect on oil prices of the earthquake, tsunamis and nuclear leaks in Japan are difficult to predict.
Last week the lowest heating oil price in Maine was $3.50 a gallon in the southwest and west of the state and the highest price was $3.88 in the north.
US Heating Oil Consumption Down 26% as Conservation and Fuel Switches Increase
Conservation has kept heating oil tanks fuller longer in recent years. That conservation, coupled with consumers switching to other heating fuels, brought US consumption of heating oil down by 26 percent in five years. (image: inspectapedia.com)
For decades, the US heating oil market has been shrinking, and the trend has continued in recent years, bringing a 26 percent decrease in heating oil consumption in the US between 2004 and 2009, the Associated Press reported on Friday.
Data from the Energy Information Administration (EIA) showed that over those five years, national consumption of heating oil dropped from 6 billion to 4.4 billion gallons per year. The AP reported that today’s heating oil users are frustrated with rising prices, and that frustration has led some consumers to switch to other fuel sources. But the decline in consumption can also be traced to conscientious customers taking other steps to reduce their personal consumption of heating oil. Simple measures like weatherization and adding insulation have helped heating oil users boost the heat retention of their homes and reduce their seasonal volume of consumption (some quite dramatically) in recent years.
In Maine, by far the most heating oil-dependent state in the US (three out of four homes in Maine are heated with oil), consumption fell 35 percent from 2004 to 2009. The AP report held up Maine resident Tom Wright, who changed his heating system to run on wood pellets, as an example of the trend away from heating oil in Maine and around the country. But for most Americans, the $26,000 Wright spent on a “high-end” wood pellet furnace is a prohibitively high expense, even with the possibility of savings on fuel in the future. The report also covered the case of Suzanne Sayer, a Mainer who invested in weatherization and insulation and has seen considerable heating oil conservation as a result. Sayer, who typically receives two oil deliveries each winter, has not received a delivery since filling her tank in August.
In the future, the trend of declining heating oil use will no doubt continue. It is most likely that conservation will be the leading cause of that continuation, as the struggling economy has tightened household budgets and boosted awareness of energy conservation.
R.I. Governor Proposes Tax on Heating Oil
Governor Lincoln Chaffee of Rhode Island delivering his budget proposal to the state's General Assembly on Tuesday. (image: pbn.com)
Governor Lincoln Chafee of Rhode Island proposed an ambitious plan to address his state’s budget problems on Tuesday night, and they included a tax on heating oil. Bloomberg Businessweek reported on Wednesday that a lower but broader sales tax and a new tax on previously untaxed goods including heating oil were both part of the proposal. The lower, six percent sales tax would be applied to a variety of goods, such as dry cleaning, taxi fares, and over-the-counter drugs. The new one percent tax would be applied to heating oil, clothes, shoes, and water bills under the plan.
ABC 6 in Providence covered Chafee’s proposal as part of its Operation Warm Home series, which facilitated donations of heating oil to those in need who could not secure other forms of assistance. ABC 6’s report included reactions to the proposal from recipients of oil through the Warm Home program. Most of the interviewees were strongly opposed to the proposed tax, citing the difficulty they currently have paying for their heating oil.
News reporter John Guice summarized the feelings of heating oil consumer and assistance recipient Alethia Mitchell, who believes that the governor is “looking for money in all the wrong places.” Alethia herself added, “They can’t squeeze blood out of a turnip.”
Low-income Americans have struggled especially hard this heating season to pay their heating bills, as steeply rising crude oil prices and a parade of winter storms boosted demand and prices throughout the Northeast in recent months. President Obama’s proposal to cut federal funding for the Low Income Heating Energy Assistance Program (LIHEAP) in half in his 2011 budget has put a spotlight on the plight of Americans struggling to pay their heating bills.
Maine Heating Oil Prices Continue Upward March
The average retail price for heating oil in Maine posted its second consecutive big gain last week. (image: Makaristos via wikimediafoundation.org)
The popular uprising in Libya and its disruptive effect on crude oil exports led heating oil prices higher in Maine and the rest of the US last week. The Governor’s Office of Energy Independence and Security (OEIS) announced on Tuesday that Maine’s average retail heating oil price jumped 13 cents a gallon last week, according to the Maine Public Broadcasting Network.
The 13-cent increase, from $3.52 to $3.65 a gallon, marks the second double-digit increase in the statewide average price in as many weeks. OEIS director John Kerry explained that the Libyan crisis and concern it may spread to other oil-producing countries led to a 14 percent increase in crude oil prices since mid-February, which was the primary driver behind heating oil’s most recent price jump. Kerry also noted that data from the Department of Labor showed that US unemployment dropped below 9 percent last month, a positive sign for the economic recovery that also supported prices.
The OEIS also reported the usual price discrepancies among different areas of the state, with the highest price of $3.88 a gallon found in the northeast and the lowest price of $3.48 found in central Maine.
Maine Heating Oil Prices Spike, as in Other States (and Countries)
Sunset over Acadia National Park from Hancock Point, Maine. (image: Ivy Main via wikimedia.org)
The average retail heating oil price in Maine leaped 15 cents higher per gallon last week, following the global trend of skyrocketing petroleum prices driven by unrest in the Mideast. The Maine Public Broadcasting Network reported on Monday that the state’s average retail heating oil price hit $3.52 per gallon during the week ending on February 25.
The Maine Governor’s Office of Energy Independence and Security (OEIS), which compiles the heating oil price data each week, released a statement from OEIS director John Kerry explaining that crude oil supply worries were the main driver behind the huge price increase. Kerry noted that although “the United States still has ample inventories,” concerns that political upheaval could reach Middle Eastern oil producers like Saudi Arabia have been driving up crude and, by extension, heating oil and gasoline prices as worries over future oil supplies intensify.
As usual, the OEIS report showed heating oil price discrepancies among the different regions of the state: “[the] lowest price of $3.34 a gallon found in central Maine, and the highest price, $3.73 a gallon found in the east.”
Maine Heating Oil Prices Edge Higher
Petit Manan Lighthouse, Maine. (image: Sdantzer via wikimediafoundation.org)
The average retail price for a gallon of heating oil in Maine rose by a penny last week to reach $3.36 per gallon, the Maine Public Broadcasting Network reported on Monday.
The Maine Governor’s Office of Energy Independence and Security (OEIS) reported the figure, and its director John Kerry cited economic expansion in the developed world, recent cold weather, and political turmoil in the Middle East as the reasons for higher prices. He also noted that high supplies of heating oil and unseasonably warm weather expected to hit the state in the coming week or two have been “moderating increases” in heating oil prices “but have not resulted in any declines.”
The price survey conducted by the OEIS found the usual price differences between different areas of the state: the highest price of $3.53 was found in Eastern Maine and the lowest price of $3.18 was found in Western and Southern Maine.
Proposed NH Law Aims to Strengthen Protection of Pre-Buy Heating Oil Customers
The New Hampshire State Legislature in Concord is considering new protections for pre-buy heating oil customers. (image: howstuffworks.com)
Officials in New Hampshire are working on a new law to protect pre-buy heating oil customers from serious financial losses in the case of dealer insolvency. The Concord Monitor reported on Monday that Representative Lee Quandt of Exeter is working with the state attorney general’s office to formulate a law that will set aside pre-payments for heating oil to guarantee customers receive their oil or a refund.
The proposal comes in response to an unfortunately familiar phenomenon: customers receive a discount for paying for an entire season’s worth of heating oil up-front, only to lose all or part of their money when their dealer goes out of business before delivering the oil customers have paid for. This precise scenario played out in late 2009 with Flynn’s Oil Co., and although the New Hampshire Court system was able to secure refunds for pre-buy customers in that case, the refund process will take several years. In a similar case, customers of the bankrupt F&S Oil in Connecticut will only receive a refund for 30 percent of what they pre-paid.
Rep. Quant’s bill is currently awaiting consideration by the New Hampshire House Commerce and Consumer Affairs Committee. It would require heating oil dealers to enter into futures contracts with suppliers under which they are obligated to buy the quantity of oil needed to fulfill pre-buy contracts with customers. Such contracts do not require immediate payment for the to-be-purchased oil, but the proposed law would require dealers to put 75 percent of the cost into an escrow account. The escrow arrangement would ensure that those funds could only be used to purchase oil for pre-buy customers or to issue them refunds in the case of company failure. Thus, the law would prevent future repeats of the Flynn’s Oil case and others like it, when dealers in dire straights used pre-buy payments to cover short-term costs and temporarily stave off bankruptcy. New Hampshire already has guidelines for heating oil dealers who offer pre-buy contracts in place, but they are more flexible and less stringent than the current proposal.
The state’s heating oil industry, as represented by the Oil Heat Council of New Hampshire, supports the measure. Executive director Bob Scully told the Monitor,
Our association feels it’s important to protect the customer. We are doing the right thing to make sure customers get fuel to heat their homes and their money is protected.
But one New Hampshire dealer interviewed by the Monitor disagreed with the Council’s position, saying that the new law would do little to prevent irresponsible dealers from losing customers’ money and could increase costs that would lead to higher retail prices.
Mass. Heating Oil Prices Hit 10-Year High
Prices in the Bay State have hit ten-year highs. (image: fedstats.gov)
Crude and heating oil prices have are on the rise at the New York Mercantile Exchange (NYMEX), and that means climbing retail prices for heating oil across the country. In Massachusetts, the current statewide average price of $3.46 a gallon is the highest in a decade, the Boston Herald reported on Wednesday. The average price is 61 cents higher than the statewide average at this time last year.
NYMEX heating oil prices retreated somewhat at the beginning of the year and did so again earlier this week, but extreme winter weather conditions in the Northeast has kept them mostly on the rise this season. Heating oil prices have also received support from rising crude oil prices, caused in part by huge speculative bets places by investors that have swarmed oil markets in recent years.
Surprise Inspections in NJ Keep Heating Oil Truck Meters Accurate
A NJ Office of Weights and Measures official inspects the meter on a heating oil truck along Doremus Ave. in Newark. (image: Steve Sandberg via newyork.cbslocal.com)
Officials from the New Jersey Office of Weights and Measures set up outside of heating oil truck fill-up locations on Wednesday to perform surprise inspections of the trucks’ meters. The officials performed unannounced inspections of the heating oil pump meters (the machines that keep track of how many gallons of fuel are delivered to each customer) on 28 trucks to ensure they were operating accurately, the realty site Real Estate Rama reported on Wednesday.
The inspectors waited outside of two heating oil filling sites, one in Newark and one in Hamilton Township, Mercer County. Of the 28 trucks inspected, three were found to have inaccurate meters and were condemned by inspectors, meaning they are legally prohibited to make deliveries until they have been repaired, re-inspected, and cleared. Two of the condemned trucks were found to be dispensing less fuel than indicated by the meter and the third’s meter was displaying incorrect numbers on its register.
Heating oil trucks in New Jersey and most other states are inspected once a year for safety and accuracy of their meters. State officials also perform unannounced inspections to ensure that meters remain accurate between annual inspections. Acting Director of the Division of Consumer Affairs (of which the Office of Weights and Measures is a part) Thomas R. Calcagni explained the reasoning behind the surprise inspections:
Every drop of home heating oil matters, especially when prices are well over $3 a gallon and winter is far from over. Homeowners are paying the highest prices since 2008 for home heating oil and any shortchanging of consumers will not be tolerated.
Maine Heating Oil Prices Rise Again, Jumping 8 Cents per Gallon
Maine's Portland Head Lighthouse in winter. (image: concierge.com)
The average retail price for heating oil in Maine jumped 8 cents higher last week to $3.18 per gallon, according to the Maine Public Broadcasting Network. The latest report on heating oil prices from the Maine Governor’s Office of Energy Independence and Security (OEIS) announced the average price for the week ending January 14 on Wednesday.
The OIES report showed the usual discrepancy in prices among different regions of the state: the lowest price of $2.98 per gallon was found in the Southwest and the highest price of $3.44 a gallon was found in the North.
OEIS director John Kerry attributed last week’s rising prices to growth in global demand for crude oil and petroleum products.
More Heating Assistance On the Way in the Form of Increased LIHEAP Funds
(image: liheap.dpw.state.pa.us)
UPDATE:
It turns out that Maine and New Hampshire weren’t the only states to receive additional funding–a fact that was omitted from the AP report mentioned below.
The US Department of Health and Human Services (HHS), the agency that administers LIHEAP at the federal level, announced additional funds for all LIHEAP recipients in a press release published on Wednesday. The money will be distributed to the “states, tribes and territories” that participate in the LIHEAP program. The just-announced funds bring the total granted to all LIHEAP recipients during the 2010-2011 heating season to $3.9 billion.
In comments accompanying the press release, HHS secretary Kathleen Sibelius noted that the extreme cold experienced in many parts of the country already this winter has intensified the need for LIHEAP assistance:
Much of the country has already experienced a very cold winter. Today’s additional funds will help struggling families keep safe and warm for the remainder of the season.
The original version of this story appears below:
More funding for heating assistance programs in Maine and New Hampshire are on their way from the federal government. The Associated Press reported on Tuesday that that a total of $36 million in added funds have been earmarked for the Low-income Home Energy Assistance Program (LIHEAP) in the two states.
The rural makeup and far-north location of Maine and New Hampshire make them the home of extreme winter weather and many heating oil users (according to the Department of Energy, 80 percent of Mainers warmed their homes with heating oil in 2000). The intense cold in the two New England states makes for higher overall heating demand and greater needs for heating assistance.
Maine Senator Olympia Snowe announced that her state would receive an additional $23 million to cover LIHEAP expenses this year, and New Hampshire senator Jeanne Shaheen said her state would receive $13 million more. Snowe has been a strong advocate for generous funding for LIHEAP in Maine, citing extreme cold that covers the state each fall and winter. Last year, she led the Maine Congressional Delegation in opposing a change to LIHEAP distribution parameters that she said unfairly favored warmer-weather states.
For the heating oil users and other residents of Maine and New Hampshire who need some financial help to keep the heat on during these coldest months of the year, the added funding comes as welcome news, as recession-related money problems continue to affect families across the country.
Heating Oil Prices Continue Upward March in Maine
New Harbor, Maine. (image: Denis Ponté via wikimedia.org)
During the first week of 2011, heating oil prices in Maine increased along with prices nationwide. The first weekly report on heating oil prices in the state showed the statewide average at $3.10 per gallon, a three-cent increase over the previous week’s average, the Maine Public Broadcasting Network reported on Tuesday.
The latest report from the Maine Governor’s Office of Energy Independence and Security (OEIS) also showed the usual regional differences in prices: the lowest price of $2.90 per gallon was found in the west and southwest of the state and the highest price of $3.25 was found in central, eastern, and northern Maine.
NJ Rebates for Energy-Efficient Heating Oil Equipment Extended Through June
New Jersey's Clean Energy Program will continue to offer rebates to purchasers of energy-efficient heating equipment through the end of June. (image: facebook.com)
New Jersey’s Clean Energy Program will extend its WARMAdvantage program through the end of June 2011, continuing to offer rebates to residents who purchase efficient heating equipment. This means that New Jersey homeowners who purchase an EnergyStar-qualified oil-fired boiler or burner with an AFUE rating (a measure of fuel efficiency) of 85 or higher will be rewarded by the state in the amount of $300.
HeatingOil.com Approved Dealer Woolley Fuel of Maplewood, NJ broke the news at 4:00 Eastern Time on Wednesday afternoon with a happy tweet, “@woolleyfuel: N.J. Board of Public Utilities has extended the $300 rebate for the installation of high efficiency heating oil equipment through 06/30/11!” A state employee reached through a call to the Clean Energy Program’s information hot line (1-866-NJSMART) confirmed the announcement.
Investing in a modern and efficient heating oil burner or boiler can save homeowners hundreds of dollars a year by reducing heating oil usage, and also cuts down on greenhouse gas emissions from heating systems.
For more information on the program, visit the New Jersey Clean Energy Program’s website.
A special thanks to Woolley Fuel for the tip!
Maine Heating Oil Prices Jump Nine Cents in Two Weeks
The Maine statehouse in Agusta. (image: Julia Ess via wikimedia.org)
As heating oil prices climbed around the country during the last two weeks of 2010, the average retail price in Maine followed suit, adding 9 cents a gallon. According to the Governor’s Office of Energy Independence and Security (OEIS), the two weeks ending on December 31 saw the average statewide price increase from $2.98 to $3.07 a gallon, the Maine Public Broadcasting Network reported on Monday.
Regional price variances within the state continued, with the highest price of $3.25 a gallon found in Central Maine and the lowest price of $2.89 a gallon found in the West of the state.
Looking back at 2010, OEIS director John Kerry attributed the 15 percent increase in crude and heating oil prices primarily to “expanding growth and demand in China.”
Federal Funding Keeps Weatherization Program Humming Along in Mass.
Workers in Massachusetts add insulation to the exterior of a home as part of a federally-funded program. (image: mass.gov)
The combination of an ongoing economic downturn and spates of extremely cold weather have made 2010 a difficult year for many residents of the Northeast who depend on government assistance to keep their homes warm. But while heating assistance funding falls short of meeting demand, a federally funded initiative to weatherize homes is saving residents of Massachusetts and other Northeastern states big bucks on heating bills by delivering serious energy efficiency improvements.
Boston.com reported on Saturday that a federal program funded by the 2009 economic stimulus package is rapidly weatherizing homes and lowering heating bills for Massachusetts residents who receive government help. The long-standing Low-Income Home Energy Assistance Program (LIHEAP), a federal program administered by state governments that provides funds to needy families to help them pay heating bills saw its funding reduced in 2010 as part of broad cutbacks aimed at reducing government expenditures. At the same time, more and more Americans sought help from LIHEAP as unemployment and other economic difficulties resulting from the recession took a bite out of family budgets.
The US Department of Energy’s Weatherization Assistance Program (WAP) is partially bridging that gap around the country, and is supporting brisk weatherization progress in Massachusetts. Thanks to the stimulus-funded WAP, Massachusetts’ weatherization budget jumped from about $6.5 million last year to $122 million to be used by March 2012. The extra funding allowed the state to weatherize 7,500 homes this year, compared to 2,500 homes weatherized in 2009.
A local administrator of WAP in Boston estimated that most weatherization recipients save up to 30 percent on their heating bills after improvements are made to their homes, which can add up to over $1,000 in savings per year.
Massachusetts’ impressive progress in weatherization is the latest of many examples that show the high effectiveness and strong return on investment offered by weatherization and other home energy efficiency improvements. Even the most basic and low-cost improvements that homeowners can undertake themselves can lower the cost of heating oil or other heating fuels by hundreds of dollars a year.
If you are in need of heating assistance and/or think you may be eligible for free energy efficiency improvements, visit the Department of Energy’s Weatherization and Intergovernmental program web page for details on eligibility and how to apply for assistance locally.
Watch Boston.com’s video report on the weatherization program below.
Maine Heating Oil Prices Climb for Third Week
The lighthouse at Bar Harbor, Maine. (image: Liz West via wikimedia.com)
Maine Heating oil prices increased last week, the third consecutive week that saw higher prices, the Maine Public Broadcasting Network reported on Monday.
According to the Governor’s Office of Energy Independence and Security (OEIS), which releases heating oil price reports every Monday, last week’s price increases were a direct result of growing demand for heating oil tied to cold weather in Europe and the Northeastern US. Maine’s statewide average retail price for a gallon of heating oil was $2.98, an increase of two cents from the previous week.
As always, prices varied widely in different parts of the state. Last week, the lowest price reported by OEIS was $2.80 a gallon in southwest Maine and the highest price was $3.16 a gallon in northern Maine.
Indictment of NH Heating Oil Dealer Highlights Risk of Pre-Buy Contracts
Heating oil customers who sign pre-buy contracts with dealers take a big risk with their money, as the case of Kidder Fuels in New Hampshire shows. (image: foxbusiness.com)
Kidder Fuels of Northfield, New Hampshire abruptly shut down in July and filed for bankruptcy without refunding payments made by pre-buy customers or delivering the agreed-upon quantities of oil to those customers. Last week, a grand jury from the Belknap County Superior Court indicted Kidder Fuels for violation of the state’s Consumer Protection Act, local news cite citizen.com reported on Saturday.
According to citizen.com’s report, Kidder’s failure to repay pre-buy customers is not in fact the legal basis for the indictment, but rather the company’s failure to include “a clear explanation of the means by which the dealer will meet the obligations of the contract for the entire contract period, including supplier agreements, futures contracts, bonding, or a line of credit” in its pre-buy contracts. New Hampshire law requires the inclusion of such an explanation in all pre-buy contracts. It is unclear if Kidder’s failure to refund pre-buy customers for payments made figures into the fraud charge and when, if ever, those customers can expect refunds. Former customers of Kidder Fuels (and any other New Hampshire consumers with complaints) can file grievances with the consumer protection agency at www.doj.nh.gov/consumer or by calling 1-888-468-4454 to request a complaint form.
The Kidder Fuels case provides the latest of many cautionary tales from around the Northeast showing the inherent risk of pre-buy contracts. Although consumers are in part protected by state and local laws mandating they get the fuel they pre-pay for, heating oil companies that go into bankruptcy with outstanding pre-buy contracts often result in only partial reimbursements (and sometimes none at all). Basically, heating oil dealers that go under often don’t have enough money or assets to pay off all of their debts, which leads to pre-buy customers getting only a fraction of what they are owed.
In most cases, the failure to repay pre-buy customers is not the result of greed or deception on the part of oil companies, but rather a result of the numerous financial complexities of running a fuel business becoming too much to bear. According to an ad placed with citizen.com’s print edition in July, the owners of Kidder Fuels said that they were forced to shut down their 50-year-old business because of “tight credit markets, the current economic climate, and the deteriorated financial condition.”
Regardless of owners’ intentions, pre-buy contracts pose a huge risk to the consumers who enter into them. While a thorough background check of a heating oil company that is offering pre-buy contracts can help confirm a company’s honesty and reliability, it can never guarantee that a company will still be in business a few months down the road.
The Kidder Fuels indictment comes just two weeks after a New Hampshire assistant attorney general called for a strengthening of regulations covering pre-buy contracts that would provide better protection to heating oil consumers. Perhaps the public attention the Kidder Fuels fraud case will draw will help encourage New Hampshire legislators to make such reforms a higher priority in 2011.
Maine Heating Oil Prices Continue to Rise
Arthur Parton's painting, Misty Morning, Coast of Maine. (image: commons.wikimedia.org)
The Maine Governor’s Office of Energy Independence and Security announced on Monday that heating oil prices in the state increased again last week. The statewide average retail price for a gallon of heating oil rose by three cents to $2.96 for the week ending December 10, according to the Maine Public Broadcasting Network.
Rising prices in Maine reflected the national upward trend in heating oil prices. Increasing demand from China, modest signs of economic recovery in the US, and falling temperatures across the country all helped to push up heating oil prices last week and continued to support crude and heating oil prices on commodities markets on Monday.
Regional price difference in Maine also continued, with the highest price in the state, $3.16 per gallon, found in the North. The state’s lowest price, $2.75 per gallon, was found in the Southwest.
