No one knows whether heating oil prices will continue to rise from here, but unrest in the Middle East is causing deep concerns for everyone. Normally, we wouldn’t begin our new price protection programs until July. But because these are extraordinary circumstances, we are allowing our members to lock in a fixed price right now that provides coverage through June 30, 2012.
Our fixed price is $3.99 a gallon. This is higher than last year’s price, but provides protection against further increases from where prices are now.
If you’d like to take advantage of this offer, please call us at (802) 860-4090 or send email to info@ecvt.net. Please note that we have only 15,000 gallons of oil available on a first-come basis at this price. Our deadline is May 31.
To help with your decision, here are answers to some of the most common questions our members ask about our pre-buy program.
Is price protection worthwhile?
Generally, it works in our members’ favor. When we looked at average prices over the past five years (see www.ecvt.net/prices), here’s what we found:
• Price protection (our pre-buy or Smart Choice plans) was the best choice in three years out of five.
• In the other two years, our cash price (paying for each oil delivery within 10 days) produced the lowest average price.
What is the advantage of a pre-buy plan?
Certainty during volatile times. If you like certainty, our pre-buy plan works best. No matter how high – or low – oil prices go, your price won’t change. Our pre-buy plan has a 400 gallon minimum purchase requirement.
Is there a risk to signing a pre-buy contract?
Yes, absolutely. We learned two years ago that while prices can skyrocket up, they can also plummet down. If you pre-buy, you will be stuck at the higher rate. There will be nothing we can do. Of course, because you have a fixed price, you are protected from things getting even worse.
What if I change my mind?
You can’t. After your pre-buy agreement goes into force, we can’t refund your purchase because we will have secured your heating oil from our suppliers. They don’t allow us to get out of our agreement with them.
Is there another way to get price protection?
Yes, there is. Many Co-op members sign up for our Smart Choice plan with monthly payments and a cap price. During the season, there’s a limit on how high your price can go. But it will also drop if the market falls. So you’re covered either way. We are charged a fee from our suppliers for this “flexible protection.” It costs 25 – 40 cents per gallon, but bear in mind that prices have moved more than a dollar up and down in two of the last three years. Our Smart Choice plan will be available in early July.
Also, some of our members pre-buy less oil than they will need for the whole year. When that’s used up, they pay our regular daily price. This gives them some protection against rising prices, but also allows them to benefit if prices drop later in the season.
Will the Energy Co-op have other pre-buy offers?
Yes we will. We will have several pre-buy offers available between now and the end of October. The fixed price for these offers could be higher or lower than our current pre-buy price. It depends on market conditions, and that’s something that no-one can predict.
Would I be better off waiting to see if prices drop?
It’s impossible for us to say. Again, no-one knows if prices will drop or surge higher over the next few months. It depends on international events that are beyond anyone’s control. It’s up to you to decide what to do – and we would be happy to discuss your options. It may be helpful to think about two scenarios. Which would be harder for you?
• You don’t sign up for a price protection plan and prices go up, or
• You sign up for a pre-buy plan and prices go down?
How can I lower my oil bills?
Use less oil. Get an energy audit. Burn wood pellets. Over the past few years, dozens of Co-op members have invested in energy audits for their home. They have learned where they will get the most energy savings for the least cost – the best return on their investment. Then, they’ve gone ahead and made improvements: adding insulation, sealing air leaks, replacing old heating equipment, installing programmable thermostats, and more. Go to www.ecvt.net and click on Saving Energy, then Members Stories, to learn more.
More than 300 Co-op members have pellet stoves and now burn our wood pellets, a renewable fuel made right here in Vermont. Burning our wood pellets is the equivalent of paying $2.50 a gallon for your heating oil! And pellet prices are much more stable than heating oil or propane prices. Go to our Early Pellets page for more information. Contact Wayne Thompson, our service and efficiency program manager at (802) 860-4090, wayne@ecvt.net for information and pricing for our Napoleon pellet stoves.
