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propane

Advice on Purchasing Propane 

See our Heating Fuel page for updates on new propane laws and regulations

When comparing and selecting service providers to supply your home with propane, it is important to understand the kinds of service agreements, contracts, charges and terms that are often associated with setting up propane service.  Following are some things to consider when you are preparing to purchase propane fuel in Vermont.

How do I compare prices between propane sellers?

Understand the factors that influence per-gallon pricing.  Propane is usually priced per gallon, like gasoline.  Most propane sellers will readily provide you with their current, per-gallon price.  However, the price can change significantly from one day to the next, and can depend upon how much you buy, where you live, and other factors.  Additionally, the various fees for service and other items may vary widely from one seller to the next. Some sellers may include fees in their per-gallon price, others may charge separately.  Price is not regulated in Vermont, and sellers may generally charge what they wish.

Look beyond per-gallon pricing.  In order to help Vermont consumers accurately compare prices between sellers, the Attorney General’s Office requires that sellers provide a standardized disclosure form (see box below) that details all charges that may apply, the amount of the charge, and the length of time that amount will remain valid.  When shopping for a seller, be sure to ask for the disclosure form (which, if you are a new consumer, you are entitled to by law). Be aware that there are different levels of service and different types of pricing programs offered by sellers.  The disclosure form can help you compare these differences.

Propane Dealers Disclosure 
Starting January 1, 2010 Propane sellers are required to provide new consumers with their fees for service. Consumers can use these forms to compare fees from different sellers.

PROPANE SELLER’S NEW CUSTOMER DISCLOSURE FORM - New form effective January 1st, 2012
PROPANE SELLER’S EXISTING CUSTOMER DISCLOSURE FORM - New form effective January 1st, 2012

ConsumerProtection Rule (CP) 111.19(b) requires Vermont propane sellers to provide a written disclosure of their non-fuel fees to any person who inquires or becomes a consumer. The disclosure form has been amended effective January 1st, 2012.  Disclosure forms issued after this date must be set out on this form —except that the seller may list more fees as long as they are not prohibited by Vermont law.

Sellers that do not want to issue this new fee disclosure form are not required to do so until their current form expires or any fee is changed or added, so long as they do not collect fees that are prohibited under current Vermont law and the rule.  As required under the rule, all fees must be disclosed.  The term "variable" cannot be used.  If  a seller's existing fee disclosure form uses the term "variable"  in the amount for a fee, that fee cannot be charged.   If they used “variable” in the duration date of the fee, the specific fee amount is only valid for one year from the date they issued the disclosure and then will no longer be valid. 

What about contracts?

There are a wide variety of contracts among propane sellers in Vermont.  Each seller may have several different contracts, depending upon your usage and preferences.  No matter what kind of usage you require, a written contract with your seller is an important document to have, and to keep.  In a contract, both you and the seller have certain rights and responsibilities.  Without the contract, you may end up having a dispute about those rights and responsibilities that could be difficult to resolve.  Following are some examples of different kinds of contracts:
  • Pre-buy contracts:  Require a commitment by you to purchase a certain amount of fuel, at a specific price, and provide payment up front.  Many of these contracts include provisions that assess a penalty fee if you end up taking less fuel than you agreed to. 
  • Budget plan: Rather than payment up-front or when the fuel is delivered, budget plans allow consumers to spread payments out over time by scheduling regular monthly payments over 10 or 12 months and may require the consumer to sign a contract.  The price of fuel and gallons are usually not fixed, but are estimated from past usage and projected prices.  A budget plan with a fixed or capped price usually requires a contract and a separate fee.
  • Fixed-price or fixed-margin contract:  These contracts may or may not set a fixed amount of fuel that you are agreeing to purchase, but will set a fixed price or a fixed margin (margin is the amount you pay over the seller's cost).  In a fixed-price agreement, the seller agrees to charge one price for the term of the agreement.  A fixed-margin agreement sets the amount you will pay for fuel based on the seller's cost.
  • Market rate contract:  Generally the most basic type of contract, this usually indicates that you will pay the seller's daily rate for fuel delivered on that day.
Contracts should also set out any additional fees or costs associated with the supply of fuel.  If you are a new consumer, you will be given a disclosure form that details any charges that the seller may impose, and the time period during which those amounts will be valid.  You should also review your contract for any terms that may assess a fee for certain conditions.  Generally, if a fee is not in the seller’s disclosure form, or in the absence of a disclosure form, is not in your contract, the seller is not permitted to charge that fee.

If I sign a pre-buy contract, and end up using less than I thought I would, do I have to purchase the remaining fuel on my contract?

Under Vermont law, if a seller enters into a pre-buy contract with you, the seller is then required to then go and purchase, or make a commitment to purchase that amount of fuel within days of entering into the contract.  Because the seller is required by law to purchase the fuel up front that  will be sold to you later, many sellers will charge additional fees if you later decide not to take delivery of the fuel you agreed to purchase.  A contract is a legally binding agreement.  Be sure to review your usage, and commit to an amount of fuel that you feel is appropriate for your usage. Carefully review the terms of your contract to ensure you understand what you may be charged later on if your usage changes.

A seller has said I don't have good enough credit to set up an account, what do I do?

Propane sellers are generally not required to extend credit to anyone.  However, a seller generally must provide propane to someone in their service area if the consumer is ready to pay cash for the delivery.  If a seller has declined to set up a credit account, you may request to set up a Cash-On-Delivery, or COD account.  As a COD consumer, you will have to pre-pay for fuel deliveries, and may be asked to schedule those deliveries some time in advance to avoid special trip fees.  It is also your responsibility to monitor your fuel levels and request deliveries in time to avoid running out of fuel.

What are my other rights as a Vermont propane consumer?     

Vermont regulations establish certain rights and responsibilities for consumers with regard to tanked propane service.  Since 1986, Vermont Consumer Protection Rule 111 (CP111) has governed the business practices of propane service providers in Vermont and is enforced by the Office of the Attorney General.
Under CP111, propane consumers are entitled to, among other rights:
  • notice prior to disconnection or disruption of service, including tenants whose propane service is included in the rent or is otherwise under the landlord's name;
  • notice prior to a change in credit status;
  • the right to establish new service as a cash consumer and, if re-establishing service within 8 months of termination of service or last payment, the right to get fuel on a cash basis with partial payment toward any past-due balance;
  • the right to stop a disconnect during heating season for medical reasons;
  • limits on minimum delivery requirements and security deposits;
  • freedom from discrimination on the basis of race, creed, color, religion, national origin, creed, gender, ancestry, place of birth, age, physical or mental handicap, marital status, sexual orientation, gender identity, or being a recipient of public assistance. 
If you would like to know more about your rights under CP111, please visit our Heating Fuel page for additional information.

If you have a complaint about a propane seller, or need more information about your rights as a propane consumer, please contact CAP for more information or file a complaint.  In most cases, CAP can quickly resolve disputes between consumers and propane sellers.

If you need help paying your fuel bill, dial 2-1-1 from your Vermont phone to be connected with an agency that can assist you.

Last modified November 15 2012 09:00 AM

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