propane contract in New Hampshire

[twd000]

We just moved into a 1974 Colonial in southern New Hampshire. There is a 500-gallon propane tank underground . It runs the furnace, hot water heater, whole house generator (when needed), and we plan on adding a propane stove to the kitchen.

My wife called me at work last week to tell me that the Eastern Propane delivery driver was there and was told he would be locking the tank for failure to transfer ownership to my name. Apparently when I called them prior to closing on the house, they didn't actually transfer my name to the account. So we got that cleared up, he topped up the tank (even though it was 60% full) and I paid for the whole tank (at $2.49 a gallon). I tell them to put me on "Will Call" status, since I am capable of reading the gauge and I don't want surprise deliveries.

This week I get a contract in the mail from Eastern Propane that they want me to sign. There are all sorts of terms I'm not comfortable with, and I really don't want to sign this piece of paper. Is this how the propane business works in New England? This is all new to me.

It's a 5-year contract, auto-renewing for one-year terms after that.

• If the tank must excavated at any time for removal, repair, recertification, relocation, or replacement, then I am responsible for paying those costs.
• If I want to switch propane suppliers, I must pay $1895.00 to Eastern Propane for the tank.
• There is no mention of routine maintenance, and who is responsible to pay for that.
• There is a minimum usage requirement, where I must use at least 50% of the tank capacity every year, or I will be charged some fee (undisclosed how much this fee would be)

So my problem is, I like the idea of having propane available at the house, but I hate these terms.

• I plan on supplementing a good portion of my space heating requirements with a woodstove.
• I may look into a HPHW heater in the future if the cost savings make sense.
• I like having a diversity of fuel sources since we have all seen fossil fuel prices spike and crash.
• I don't like not being able to shop around to find which supplier has the best price when I need my tank filled.
• I realize New England has some of the highest propane prices in the country, and I bet a lot of that is due to the "captured tank" arrangements, and not just supply/demand.
• I have no idea the condition of this buried tank; whether it is really worth $1895. What is the residual value of this thing, if this contract just passes from one homeowner to the next?

Am I delusional in thinking that I would save money by calling around to the various local propane dealers? Do they mostly keep their prices in lockstep?
Can I save money buy buying and maintaining my own tank?
Has anyone used the Our Town Energy Alliance to save money with the pooled buyer's arrangement?

 

[Woody harrelson]

Gotta buy your own tank and be done with all the bullshit

 

[Wisneaky]

Look around and try to buy your own tank.

 

[fire_man]

I cannot believe some of the terms in that contract. I would tell them to stuff the contract and follow above advice to buy a tank.

We read about these strong arm tactics about Propane tanks often in New England. It's infuriating and I don't even use propane.

 

[barmstrong2]

There are some negatives to owning your own LP tank. Maintenance. Suppliers need safety inspection documentation on file and could charge you for that inspection. Liability.

Anyway, are you required by a covenants to have underground utilities? If no, I'd check other suppliers who will simply bring a new storage tank and connect to the existing supply lines. Then, tell Eastern to come get their tank. The fuel can be moved from the existing tank to the new, although I'm not sure the new supplier would go to that length. It's worth asking.

Most suppliers will want a timed contact. This is to recoup the investment of the tank and regulators. Usually a 5 year contract.

Finally, it's a cold water heater. No need to her hot water.

 

[barmstrong2]

I knew there was more... Long post.

If the tank is the property of Eastern, why would I agree to bear the cost of repair? Their tank... their cost.

Underground tanks are prepared for installation and, in theory, will remain corrosion free for 100 years, due to cathodic protection and bitsumastic covering (tar). I have removed underground tanks after many years and the tank integrity is very good. Valves are another issue. Seals can leak. Valves need to be replaced. These are not field repairs. To do it safely, the tank must be evacuated and removed to be repaired at a plant. There really is no advantage to having an underground tank, other than appearance, and a $100 fence can accomplish the same thing.

$1895 to purchase the tank outright doesn't sound like a bad price. It's been quite a long time since I sold and installed one, but, it sounds reasonable.

Unless you own the tank, you are dedicated to the supplier who owns it. It's the container law and its a NFPA code, not a New England thing. Liability matter.

Pricing is done through rack prices in Selkirk NY. It used to be, when there were LP companies and oil companies, the price of LP was very stable. Prices would remain constant through the year, with only a few adjustments. We used to buy product in futures, so, we would buy 6 million gallons at $XX per gallon and when that was gone, we'd buy again. The price moved very little. Now, it's all based on the market. When the oil companies got into LP, the whole system went wacky. Prices change daily and every company has someone calling the other distributors checking prices every day. They are all close in price. I'm happy to not be in that part of the business any longer.

As mentioned before, there's little advantage to owning your own tank. It's an expensive item and maintenance costs can be high. Let the dealer invest their money. If it needs repair, call them and tell them to come fix it.

You may not need a 500 gallon tank. Without knowing the size of the home, type of furnace, I assume it is warm air, as you also have a water heater, btu of the furnace... There are variables. The size of the tank is likely oversized for the generator. It will use a lot of fuel when it's operating.

 

[beatlefan]

I've mentioned on the forum before that I think propane dealers are like crime bosses. Yours is just another example of how a company will try to lock you in an force you to buy only from them. If you sign that contract you're stuck. You can't price shop and you can't buy from anyone else, because they're all in cahoots and the others won't fill the tank. After that, your dealer can charge you whatever they want. I went through this a few years ago when I bought my current home which has a propane furnace. I switched to wood heat and never looked back. Now I only have to fill my tank once a year.

 

[barmstrong2]

I've mentioned on the forum before that I think propane dealers are like crime bosses. Yours is just another example of how a company will try to lock you in an force you to buy only from them. If you sign that contract you're stuck. You can't price shop and you can't buy from anyone else, because they're all in cahoots and the others won't fill the tank. After that, your dealer can charge you whatever they want. I went through this a few years ago when I bought my current home which has a propane furnace. I switched to wood heat and never looked back. Now I only have to fill my tank once a year.

It's NFPA code and its nationwide. It's a liability issue. Not to mention, if I'm going to invest my money in a storage tank and regulators, why would I allow Joes Propane Company to deliver product to my container?

 

[twd000]

I've mentioned on the forum before that I think propane dealers are like crime bosses. Yours is just another example of how a company will try to lock you in an force you to buy only from them. If you sign that contract you're stuck. You can't price shop and you can't buy from anyone else, because they're all in cahoots and the others won't fill the tank. After that, your dealer can charge you whatever they want. I went through this a few years ago when I bought my current home which has a propane furnace. I switched to wood heat and never looked back. Now I only have to fill my tank once a year.

So did you keep the propane furnace and the leased tank? Assuming the wood takes care of all your space heating, and the propane is just for DHW and stove, etc?

 

[twd000]

There are some negatives to owning your own LP tank. Maintenance. Suppliers need safety inspection documentation on file and could charge you for that inspection. Liability.

Anyway, are you required by a covenants to have underground utilities? If no, I'd check other suppliers who will simply bring a new storage tank and connect to the existing supply lines. Then, tell Eastern to come get their tank. The fuel can be moved from the existing tank to the new, although I'm not sure the new supplier would go to that length. It's worth asking.

Most suppliers will want a timed contact. This is to recoup the investment of the tank and regulators. Usually a 5 year contract.

Finally, it's a cold water heater. No need to her hot water.

Is the safety inspection a one-time thing, or on a certain timeframe like a welding tank?

There is no active HOA here, I have seen other above ground tanks in the area.

I might call around and see what other companies would offer. If the price per gallon is all the same, then buying my own tank doesn't make sense.

I still have a problem with the maintenance arrangement. If they are leasing me the tank, all maintenance should be their responsibility.

 

[beatlefan]

So did you keep the propane furnace and the leased tank? Assuming the wood takes care of all your space heating, and the propane is just for DHW and stove, etc?

Yep, propane furnace is still here, but never runs. The only thing I heat with propane is water. Everything else is electric. Yes the tank is still leased. I always have it filled in August because the propane is usually pretty cheap at that time.

 

[beatlefan]

So did you keep the propane furnace and the leased tank? Assuming the wood takes care of all your space heating, and the propane is just for DHW and stove, etc?

By the way...first year in this house, I spent $4,500 on propane. This year $300.

 

[twd000]

By the way...first year in this house, I spent $4,500 on propane. This year $300.

Atta boy! Wood processing is like a part time job with similar payback. So your propane company is A OK with only selling you $300 worth of propane every year? No minimum like my contract?

 

[barmstrong2]

Is the safety inspection a one-time thing, or on a certain timeframe like a welding tank?

There is no active HOA here, I have seen other above ground tanks in the area.

I might call around and see what other companies would offer. If the price per gallon is all the same, then buying my own tank doesn't make sense.

I still have a problem with the maintenance arrangement. If they are leasing me the tank, all maintenance should be their responsibility.

The safety inspection is one time and reach supplier would want to do their own. It's just to try to cover your a$$ in the event something happens. Documentation is everything. Even with all that, anytime there is an incident, everyone who ever looked at it is on the line. The liability is ridiculous in this business. This is only if you own the tank and shop prices. If the supplier sets a tank, they do the inspection at that time.

If it's a supplier owned tank, they are responsible for any maintenance outside the home. Tank and regulators. Supply lines excluded.

 

[beatlefan]

Atta boy! Wood processing is like a part time job with similar payback. So your propane company is A OK with only selling you $300 worth of propane every year? No minimum like my contract?

I don't have a contract...but they own the tank. I got lucky by not having to "re-buy" the gas that was already in the tank. My realtor told me to ask for the propane in the tank when I made the offer on the house...so I did. I knew nothing about the system until I started calling around to get the best price for propane. Only then did I learn that I didn't own the tank because no one would fill it. After I figured out who owned it, I called them to fill it. And of course, they were the most expensive.

 

[fire_man]

I don't have a contract...but they own the tank. I got lucky by not having to "re-buy" the gas that was already in the tank.

Are you kidding me? The owner already paid for the gas, and it was conceivable you would have to pay for it AGAIN without being reimbursed by the owner? Am I missing something?

 

[barmstrong2]

Are you kidding me? The owner already paid for the gas, and it was conceivable you would have to pay for it AGAIN without being reimbursed by the owner? Am I missing something?

Yeah, that makes no sense. Unless the gas company had credited the product in the tank and bought it back. There can be only one owner of any particular thing. Except in divorce court.

 

[fire_man]

The things I'm reading about Propane company tactics amaze me.

I think I will give my oil delivery man a hug next time he delivers oil

 

[moey]

Are you kidding me? The owner already paid for the gas, and it was conceivable you would have to pay for it AGAIN without being reimbursed by the owner? Am I missing something?

Its paid at closing for a house often. Your paying the previous owner of the house not the gas company.

 

[BrotherBart]

Its paid at closing for a house often. Your paying the previous owner of the house not the gas company.

Yep. Just like if it was oil in a tank or a dozen other things that don't convey with the house and land.

 

[beatlefan]

My wife called me at work last week to tell me that the Eastern Propane delivery driver was there and was told he would be locking the tank for failure to transfer ownership to my name. Apparently when I called them prior to closing on the house, they didn't actually transfer my name to the account. So we got that cleared up, he topped up the tank (even though it was 60% full) and I paid for the whole tank (at $2.49 a gallon). I tell them to put me on "Will Call" status, since I am capable of reading the gauge and I don't want surprise deliveries.

Just to clear things up...I only mentioned that I did not have to pay for the propane that was in the tank when I bought my house because twp's post said he had to pay for the whole tank even though it was 60% full when he moved in. Maybe I misunderstood, but it sounds like he had to pay for it all, not just the top-off.

 

[Bad LP]

I scanned to responses and failed to see this.

EASTERN PROPANE SUCKS. I got a story that would take much to long to tell. In short I kicked them off the property. Hired Amerigas and have been pleased with all aspects of the firm.

 

[twd000]

Are you kidding me? The owner already paid for the gas, and it was conceivable you would have to pay for it AGAIN without being reimbursed by the owner? Am I missing something?

Yes the previous owner had called Eastern to get his credit for the remaining gas and that's when they came out to sell me a "full" tank. I'm OK with that part of the transaction, but not all this other BS [emoji1]

 

[twd000]

I'm going to scan in this contract when I get home and post it. Unless my English language skills have failed me, there are two paragraphs that are directly contradictory to each other. [emoji53]

 

[beatlefan]

I'm going to scan in this contract when I get home and post it. Unless my English language skills have failed me, there are two paragraphs that are directly contradictory to each other. [emoji53]

Don't know if this helps, but my neighbor owns his tank. He can buy from whoever he wants and he calls all the dealers for current rates each time. He saves quite a bit that way.

I was going to have my supplier remove my tank so I could buy my own. But the fees and other BS that are involved just aren't worth it since I only fill it once a year. If I was not heating with wood, I would definitely buy my own tank though.