Lessons in propane tank leasing

Wednesday January 2, 2013

I recently learned a few lessons about the propane business that I’d like to pass on to others so that they can learn from my mistakes.

When I built my new home about seven years ago there were incentives available to heat it with propane. Among them was the offer from a supplier to provide the tank at a low price. That’s the catch. Effectively, the tank serves as the supplier’s "service station." It belongs to them and no one else is allowed to fill it. If they find out that someone else is filling it they will take it away. However, you must pay them a fee to remove it.

My principal source of energy is now solar. That tank doesn’t need filling as much because I’m saving money and energy by taking advantage of renewable resources. As end-of-the-year maintenance, I recently decided to top off the tank. After the supplier left I found my invoice on the back door. I was shocked, to say the least. Almost six bucks a gallon for propane?

I got on the phone and spoke with two suppliers, randomly selected from the phone book. My question was, "How much will you charge me, to come over and fill my propane tank?" Supplier #1: $2.87/ gal if it’s their tank, $2.67/gal if it’s my tank. Supplier #2: $2.65/gal if it’s their tank, $2.60/gal if it’s my tank.

When I called my supplier, the lady at the other end of the phone told that their pricing is based on usage, and since my annual usage is low, I will be charged a higher rate. They can charge any price they choose because, as she explained, propane prices aren’t regulated. I argued that it sounded like "bait and switch," extortion, price gouging, and a scam, all rolled into one. She, in turn, explained that "propane pricing is a game Š maybe someone will give you a better price the first time, but next time will be higher."

I went on to say that I would be contacting the attorney general as well as the commissioner of Public Utilities to complain. She either was intimidated or had "mercy" on me, and lowered the price to about a buck higher than her competitors. I then spoke with one of the competitors about obtaining a tank of my own. I was told that -- including accessories, installation and all -- I could have purchased a tank of my own and shopped around for my propane for less than what my supplier had just charged me to top off the tank I had! And, that included a fill-up! Next call, the commissioner of Public Utilities. The person I spoke with was aware of the issue, saying that they get these calls all the time.

The whole situation skirts the outer boundaries of illegality, and only under certain conditions will the attorney general get involved. My only hope for remedy for my perceived injustice was through legislation. That said, I now realize that I’ve hit an impenetrable stone wall. For that reason, I feel it my moral obligation as a citizen to let everyone know -- never, ever, enter into a lease on a propane tank.




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