VPR News
6:00 am
Tue November 5, 2013

Some Fuel Dealers Leave Assistance Program, 1400 Families Affected

About 1,400 Vermont households that qualified last year for fuel assistance will have to find a new source of heating oil and propane this winter.

Eight fuel companies representing 11 different dealerships have dropped out of the fuel assistance program because of a new pricing system.

Federal funding cuts, plus a doubling in the number of Vermont households receiving LIHEAP fuel assistance over the past decade– an anticipated  28,600 will participate this winter - have the state looking for ways to stretch fuel assistance dollars.

Richard Moffi, Vermont’s Fuel Assistance Program chief says dealer participation doesn’t change very much from year-to-year, unless the state makes changes to the terms and conditions that apply to those  who sell to LIHEAP clients.

Moffi says in 2008 the Douglas Administration instituted a required discount on fuel.  As a result five dealers left the program and about 350 fuel assistance recipients had to find new dealers to purchase from.

Moffi says this time everyone at the table is being asked to sacrifice to keep Vermonters warm this winter.

He says the state is putting additional money into the program, and families will have to get by with fewer benefits.

“We’re looking at the fuel dealers to make some modest concessions on their prices,” Moffi says.

Since 2008 dealers have been required offer a 10 cent per gallon discount to fuel assistance customers.  This year the discount has been bumped to 15 cents per gallon below the price charged customers with good credit.

This winter, for the first time, dealers are also being given a second option. Instead of the 15 cent discount they can choose to charge LIHEAP customers 50 cents above a wholesale price determined by the state based on a survey of regional suppliers.

This new pricing option is called ‘margin over rack’.  The state was supposed to provide dealers with details about the new option by August 1st.   Instead the plan wasn’t finalized until mid-October.

Matt Cota, Executive Director of the Vermont Fuel Dealers Association, says that delay created uncertainty for fuel dealers.

Cota says each dealer’s situation is different and what the state determines to be the wholesale price may not be close to what the dealer actually paid.  The 15 cent discount option also means dealers may have to charge more to regular customers.

“If they charge more to make up the difference for fuel assistance customers, then they’re less competitive for their regular customers.  For some, fuel assistance can be as high as 10% but for most fuel dealers its about 2 to 5% of their customer base, so it affect dealers differently depending on what percentage of their customers receive fuel assistance,” Cota says.

The state is still waiting to hear from another two dozen dealers and has extended the deadline for them to decide.

In the meantime nearly 1,400 letters have been sent to fuel assistance clients telling them their dealer is no longer participating and they’ll have to find a new one.  Richard Moffi, the fuel assistance director, says in every case there are dealers available to serve those families.

“The coverage across the state is sufficient to serve these 1,400 consumers. The hardest hit area is Central Vermont.  We had two dealers accounting for a little over 600 households decide to leave the program,” he says.

Moffi says it’s true the state missed deadlines for giving information to fuel dealers, but a number of concessions were made to help them.  He points out that both the number of customers affected by the changes and the number of fuel dealers leaving the program represent small percentages of the totals.

“The overwhelming majority of dealers are saying, ‘yes, this works for us, we can do this’,” he says.

This year, for the first time Vermont Gas Systems and Green Mountain Power are also required to give discounts to customers who heat with electricity or natural gas as part of the fuel assistance program.

94% of fuel assistance clients use oil, propane or kerosene.

For information about the fuel assistance program, call 1-800-479-6151

The dealers that have chosen not to participate in LIHEAP this year include:

Bourne’s Energy , Morrisville VT .....................,,........ 436 LIHEAP customers

Gillespie Fuels Inc., Northfield VT.............................. 177 LIHEAP customers

(Gillespie ) Randolph Coal & Oil, Randolph VT........... 66 LIHEAP customers

Jack F Corse Inc., Cambridge, VT................................ 150 LIHEAP customers

Kevin L Rogers Inc.,South Royalton  VT......................  70 LIHEAP customers

Patriot Fuels Inc., Enfield NH......................................  39 LIHEAP customers

Patterson Fuels,  Richmond VT .................................. 145 LIHEAP customers

Patterson Propane, Richmond.....................................  24 LIHEAP customers

(Patterson Fuels) LaCross Fuels Inc., Burlington VT...... 4 LIHEAP customers

Rowley Fuels , Milton VT.............................................. 202 LIHEAP customers

Simple Energy, West Lebanon NH  Grafton-NH ........... 57 LIHEAP customers

Total number of customers affected..........................  1,370