# propane contract in New Hampshire



## twd000 (Oct 8, 2015)

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?


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## Woody harrelson (Oct 8, 2015)

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


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## Wisneaky (Oct 8, 2015)

Look around and try to buy your own tank.


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## fire_man (Oct 8, 2015)

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.


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## barmstrong2 (Oct 8, 2015)

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.


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## barmstrong2 (Oct 8, 2015)

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.


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## beatlefan (Oct 8, 2015)

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.


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## barmstrong2 (Oct 8, 2015)

beatlefan said:


> 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?


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## twd000 (Oct 8, 2015)

beatlefan said:


> 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?


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## twd000 (Oct 8, 2015)

barmstrong2 said:


> 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.
> 
> ...


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.


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## beatlefan (Oct 8, 2015)

twd000 said:


> 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.


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## beatlefan (Oct 8, 2015)

twd000 said:


> 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.


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## twd000 (Oct 8, 2015)

beatlefan said:


> 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?


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## barmstrong2 (Oct 8, 2015)

twd000 said:


> 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.
> 
> ...


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.


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## beatlefan (Oct 8, 2015)

twd000 said:


> 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.


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## fire_man (Oct 9, 2015)

beatlefan said:


> 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?


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## barmstrong2 (Oct 9, 2015)

fire_man said:


> 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.


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## fire_man (Oct 9, 2015)

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


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## moey (Oct 9, 2015)

fire_man said:


> 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.


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## BrotherBart (Oct 9, 2015)

moey said:


> 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.


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## beatlefan (Oct 10, 2015)

twd000 said:


> 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.


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## Bad LP (Oct 10, 2015)

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.


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## twd000 (Oct 10, 2015)

fire_man said:


> 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]


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## twd000 (Oct 10, 2015)

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]


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## beatlefan (Oct 10, 2015)

twd000 said:


> 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.


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## Bad LP (Oct 10, 2015)

I should have added that most companies will only sell an underground tank. I'm unaware of a leasing program within the last 8 or so years and I know for fact Eastern did not offer such a program when I bought an underground tank on Cape Cod.


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## twd000 (Oct 11, 2015)

I've attached a PDF scan of the contract.  Paragraph 3 tells me I owe Eastern $1895 if I terminate the contract and switch suppliers, but paragraph 4 tells me I owe them $0 if I do that?


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## Bad LP (Oct 11, 2015)

Fact is they don't have a signed contract with you. They are welcome to remove the tank at their own expense or sell it to you at an agreeable price.

I'd tell the mother %&^#s to go pound sand.


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## hoverwheel (Oct 11, 2015)

*I* would not sign that. If the tank belongs to them so does the cost of maintaining it. They can come and get it, then recover their costs from whomever they last had a contract with. 

OTOH, don't be surprised if they instead try to sue YOU for those costs.


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## beatlefan (Oct 11, 2015)

Yeah, I don't think I would sign that contract if I were you. I know you're new to the area, but are there neighbors that you can talk to about their suppliers?  You might be able to get some insight from them about other local suppliers.


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## barmstrong2 (Oct 11, 2015)

Yup. Tell them you don't agree to those terms. You have no obligation to buy the tank. If the tank remains their property I wouldn't agree to bear the cost of maintenance or repair. As I've said before, there really is no advantage to owning the tank. You have no obligation in this because you do not an agreement with Eastern Propane. If they won't move on their terms, tell them to come get their tank and repair the damage to your property. You have the upper hand here. They have been getting a payment for the lease from the previous homeowner. They are treating this as new equipment. It isn't and they have already recouped some of their investment. Hold firm and force them to negotiate a reasonable offer. They really don't want to come remove the tank. I guarantee it.


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## twd000 (Oct 11, 2015)

beatlefan said:


> Yeah, I don't think I would sign that contract if I were you. I know you're new to the area, but are there neighbors that you can talk to about their suppliers?  You might be able to get some insight from them about other local suppliers.



I've talked to several neighbors and coworkers, they have different propane suppliers.  Most do not own their tanks.  When I ask whether they pay a rental fee, or any maintenance costs, or the contract terms,  I mostly get quizzical looks in return.  "The guy comes and fills it up a couple times a year and we pay the bill he hands us..."


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## twd000 (Oct 11, 2015)

barmstrong2 said:


> Yup. Tell them you don't agree to those terms. You have no obligation to buy the tank. If the tank remains their property I wouldn't agree to bear the cost of maintenance or repair. As I've said before, there really is no advantage to owning the tank. You have no obligation in this because you do not an agreement with Eastern Propane. If they won't move on their terms, tell them to come get their tank and repair the damage to your property. You have the upper hand here. They have been getting a payment for the lease from the previous homeowner. They are treating this as new equipment. It isn't and they have already recouped some of their investment. Hold firm and force them to negotiate a reasonable offer. They really don't want to come remove the tank. I guarantee it.



Right, there is no way the tank is worth anything near $1895.  I think it was installed around 2004-2006, based on HVAC work done on the house at the same time.  So what is the residual value of a buried tank of that age?  It's not worth anything to Eastern; it would cost them money to dig it up and scrap it.

When you say there is no advantage in owning the tank myself, can you explain why?  Are you referring to the current buried tank, or installing my own above ground tank?  From what others have said, the ongoing maintenance costs should be low, mostly the pressure certification test, and if I can shop around for the best prices, won't that save me money after recouping the initial cost?


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## Wisneaky (Oct 11, 2015)

Bad LP said:


> I should have added that most companies will only sell an underground tank. I'm unaware of a leasing program within the last 8 or so years and I know for fact Eastern did not offer such a program when I bought an underground tank on Cape Cod.


I know every LP company around here will sell an above ground tank if you want one.


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## Bad LP (Oct 12, 2015)

Wisneaky said:


> I know every LP company around here will sell an above ground tank if you want one.



My point was that they don't lease underground tanks, the only sell them. Above ground tanks are either or...


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## barmstrong2 (Oct 12, 2015)

twd000 said:


> Right, there is no way the tank is worth anything near $1895.  I think it was installed around 2004-2006, based on HVAC work done on the house at the same time.  So what is the residual value of a buried tank of that age?  It's not worth anything to Eastern; it would cost them money to dig it up and scrap it.
> 
> When you say there is no advantage in owning the tank myself, can you explain why?  Are you referring to the current buried tank, or installing my own above ground tank?  From what others have said, the ongoing maintenance costs should be low, mostly the pressure certification test, and if I can shop around for the best prices, won't that save me money after recouping the initial cost?


The savings in fuel cost are going to be minimal. You might see 20¢ lower per gallon. That gives you just better than a 10 year return on investment, if there are no repairs in that time. One repair, particularly on an UG tank, will be very expensive. Most repairs will not be possible in the field. The tank will need to be evacuated and transported to the shop for repair. It's just not worth it.

Most companies don't install UG tanks anymore unless they are customer owned, for the same reason. They don't want the risk of repair expenses, either. Your tank is not customer owned by the previous homeowner? If it were, it's not Easterns tank to sell.
I remember doing a UG tank repo years ago. The customer failed to pay the financing, under the belief there was nothing the company could do. They sent us out with a boom truck, nobody home, we disconnect the supply lines, dug up the lift lugs and pulled the tank straight out of the ground. Loaded it up and got the hell out of there. 500 gallon tank leaves a big hole in the ground. If have loved to been there when that guy got home!


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## barmstrong2 (Oct 12, 2015)

I fired up my old laptop with my retail files. In 2006, a 325 gallon UG tank retail price was $1381. That does not include cost of installation. A 20 lb anode bag was $137 and a 500 gallon tank would have 2 of those installed. Cost of excavation, backfill, loam, seed and mulch would easily bring the total cost to $2000, and then some.
I did my own excavating and the total cost of installing a UG tank, underground supply lines, anode bags, backfill, loam, etc. was in the $3000 range.
But, in your case, I would assume Eastern has already recouped much of the cost.


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## twd000 (Oct 12, 2015)

barmstrong2 said:


> The savings in fuel cost are going to be minimal. You might see 20¢ lower per gallon. That gives you just better than a 10 year return on investment, if there are no repairs in that time. One repair, particularly on an UG tank, will be very expensive. Most repairs will not be possible in the field. The tank will need to be evacuated and transported to the shop for repair. It's just not worth it.
> 
> Most companies don't install UG tanks anymore unless they are customer owned, for the same reason. They don't want the risk of repair expenses, either. Your tank is not customer owned by the previous homeowner? If it were, it's not Easterns tank to sell.
> I remember doing a UG tank repo years ago. The customer failed to pay the financing, under the belief there was nothing the company could do. They sent us out with a boom truck, nobody home, we disconnect the supply lines, dug up the lift lugs and pulled the tank straight out of the ground. Loaded it up and got the hell out of there. 500 gallon tank leaves a big hole in the ground. If have loved to been there when that guy got home!



wow, sounds like that turned into a pissing match just to prove a point!

I'm going to ask Eastern if they can prove title/ownership of the tank.  There have been two homeowners prior to me, and I don't want either of them to come back asking for "their" tank if they think they own it.


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## barmstrong2 (Oct 12, 2015)

twd000 said:


> wow, sounds like that turned into a pissing match just to prove a point



Exactly. I was a paid by the hour employee. I didn't care.


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## twd000 (Oct 12, 2015)

barmstrong2 said:


> I fired up my old laptop with my retail files. In 2006, a 325 gallon UG tank retail price was $1381. That does not include cost of installation. A 20 lb anode bag was $137 and a 500 gallon tank would have 2 of those installed. Cost of excavation, backfill, loam, seed and mulch would easily bring the total cost to $2000, and then some.
> 
> But, in your case, I would assume Eastern has already recouped much of the cost.



Thanks for looking that up.  I'm not surprised that the initial installation would be over $2000, but like you said they have recouped a lot of that cost over the last decade of propane sales.  Is there any sort of depreciation formula I could use to support a reduced buyout price?  How long would you expect the anode to last?  I've seen estimates of 30+ years life expectancy for a properly installed tank


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## barmstrong2 (Oct 12, 2015)

twd000 said:


> Thanks for looking that up.  I'm not surprised that the initial installation would be over $2000, but like you said they have recouped a lot of that cost over the last decade of propane sales.  Is there any sort of depreciation formula I could use to support a reduced buyout price?  How long would you expect the anode to last?  I've seen estimates of 30+ years life expectancy for a properly installed tank


The sacrificial anodes are said to have a 500 year life. Who is going to prove them wrong? I have excavated UG tanks that have been buried for 20 years or better. The tank itself is in very good condition, with no signs of corrosion. The anodes do work. The problems are with the valves. Seals corrode and the valves leak. They can't be repaired without evacuating the tank of liquid and vapor pressure, which has to be done in a plant. They can not be replaced in the field.

At this point, Eastern has been paid a lease fee for 10+ years. They have recovered their expenses. The cost of removing the tank will be $500-$1000. If I really wanted ownership of the tank, I'd offer them $300, to start the discussion. I would say the possibility of a valve failure is better than good, they have already been paid for their investment by previous owners and I'm really just trying to be nice by offering to even take ownership. If they don't want to talk, tell them to come get it. And, I would demand they repair the damage to excavate it. They'll take whatever you offer. You have all the marbles in this. They're bluffing.


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## barmstrong2 (Oct 12, 2015)

I might even push them for an indefinite price contract, if I buy the tank, based on Selkirk rack price. The price they pay for fuel is no secret. You can track any fuel price here...

http://www.bgs.state.vt.us/fuel/weekly_rack_pricing.php

Tell them you want Selkirk plus $1. That's their price, plus $1 per gallon. Right now, Selkirk is .6935 per gallon. Of course, they have additional costs to get it to their plant and deliver it, but, $1 per gallon still leaves them some room to make money, which is why any business exists. You can look up the rack price anytime yourself.


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## twd000 (Oct 12, 2015)

barmstrong2 said:


> I might even push them for an indefinite price contract, if I buy the tank, based on Selkirk rack price. The price they pay for fuel is no secret. You can track any fuel price here...
> 
> http://www.bgs.state.vt.us/fuel/weekly_rack_pricing.php
> 
> Tell them you want Selkirk plus $1. That's their price, plus $1 per gallon. Right now, Selkirk is .6935 per gallon. Of course, they have additional costs to get it to their plant and deliver it, but, $1 per gallon still leaves them some room to make money, which is why any business exists. You can look up the rack price anytime yourself.




That's an interesting proposition.  I found this buyer's club in NY advertising their Selkirk + $ rates
http://peoplesenergygroup.com/fuel-pricing/


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## barmstrong2 (Oct 12, 2015)

twd000 said:


> Is there any sort of depreciation formula I could use to support a reduced buyout price?


Every company I worked for used a return on investment formula of 5 years to recover the cost of tanks/regulators. That determined the price per gallon. So, every installation was 5 years to recover the cost of equipment. After that, it's profit per gallon. 
An underground installation is different. The cost is much greater. Thus, the lease fee on equipment. By this time, 10+ years into it, I would expect Eastern has recovered their costs.


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## barmstrong2 (Oct 12, 2015)

twd000 said:


> That's an interesting proposition.  I found this buyer's club in NY advertising their Selkirk + $ rates
> http://peoplesenergygroup.com/fuel-pricing/


Interesting business concept. I wonder how they get around the container law with supplier owned tanks? I haven't seen this in this area. We always had Selkirk pricing for large users. It's nothing new. I recall a paper mill in this area that had Selkirk plus .05, just 5 cents per gallon over Selkirk rack price, but, the mill was 1/2 mile from the bulk plant and they took 7,000-10,000 gallons of LP every week. I used to dedicate a bulk delivery truck to that account one day each week. 4 trips out and dump the entire load.
If you own your tank and equipment, it puts you in a position that you can buy based on Selkirk rack price. You will, however, be dealing only with the larger distributors. Eastern, Suburban Propane, AmeriGas are the ones that come to mind. The smaller dealers buy from them, so, they can't offer Selkirk pricing.


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## twd000 (Oct 12, 2015)

OK, I just got off the phone with Eastern.  The Addendum that I scanned is only part of the contract, they are sending me the main contract at the end of the month.  They said the main contract states that maintenance of the tank and regulators is the responsibility of Eastern, I only pay if I request the tank to be relocated (which I won't).

The tank was installed in May 2007, so it's 8.5 years old.  He admitted that they have fully recovered their equipment cost at this point.  The previous owner was using 1000 gallons per year (I don't think he was supplementing with the woodstove). I asked to negotiate the buyout price of the tank, he said he would need to transfer me to Sales Dept.  I'll hold off until I read the rest of the main contract.

There is no tank rental fee, but they charge a 20% premium on the gas price.  So $2.00 for homeowner-owned tank becomes $2.50 for Eastern-owned tank.  At 1000 g/year, that's $500 "rental fee".  Pretty salty.  $2.00 a gallon is pretty appealing if I take ownership of the tank.

The minimum yearly usage is 212 gallons/yr (50% tank capacity for a 500 gallon tank @ 85% full).  If I use less than that, I pay the difference at their per-gallon rate up to 212 gallons.  I don't expect that even with wood heating I will be able to get below 21% of the previous homeowner's consumption.

If I sign the contract but stop ordering gas, I would pay the minimum yearly fee as long as Eastern's tank is on my property.  He said that they don't bother to excavate abandoned/transferred tanks.

So I do have plenty of leverage...I'll take a look at the main contract when it arrives then see if Sales is willing to negotiate.  I suspect if I decline to sign the contract, they will just abandon the tank.  Is there any way I can get it transferred to my ownership if they do that?  Then I can shop around for the cheapest supplier each time I need a fill.


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## Bad LP (Oct 12, 2015)

Shopping for the best price is a PITA every time you need a fill up.

Do yourself a favor and establish a relationship with a company. You order, they send the bill, you pay the bill right away. Someday you will need burner service and it may be on some God awful blowing cold night while YOU are traveling and the wife is home with the kids and she's ill. My LP, oil, and AC guys make it happen when the crap is hitting the fan blades because that is how business is done. I can (and have had to) get work done from over 1500 miles away because we established a great working relationship. 

If you want to sleep with Eastern then so be it. The driver was great but the office couldn't figure it out. 
Amerigas was a much friendlier company in my experience but to each his own.


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## twd000 (Oct 12, 2015)

Bad LP said:


> Shopping for the best price is a PITA every time you need a fill up.
> 
> Do yourself a favor and establish a relationship with a company. You order, they send the bill, you pay the bill right away. Someday you will need burner service and it may be on some God awful blowing cold night while YOU are traveling and the wife is home with the kids and she's ill. My LP, oil, and AC guys make it happen when the crap is hitting the fan blades because that is how business is done. I can (and have had to) get work done from over 1500 miles away because we established a great working relationship.
> 
> ...


Yeah I can definitely see the reasons to stay with a steady supplier. If I'm not saving hundreds of $ that may be worth it.

I called one of the local suppliers today. They offered to buy the tank from Eastern to get me as a customer for a year. Their delta was only $0.10. $2.29 if they own the tank, $2.19 if I own it. More expensive than Eastern, but not much savings for owning the tank.


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## Buzz Saw (Oct 17, 2015)

I bought a tank this fall. Above ground refurbished 500 gallon tank. $699.  With the purchase I got .07 off per gallon for a total of $0.64/gallon(price at the time).  I also locked in rates at $1.19 prebuy for the winter.   The price saving was about $0.50/gallon this year. Time will tell if it was worth buying the tank.


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## twd000 (Oct 18, 2015)

So I have called 4 or 5 local propane suppliers.  They each offered to buy the tank from Eastern at no cost to me.  Their prices ranged from $2.09-$2.49 a gallon.  They do not required a contract, just a single heating season as a new customer.  Some had a $0.10-$0.20 discount for homeowner-owned tanks, probably not worth the savings to me, with the peace of mind of maintenance being their responsibility.

It sounds like I have all the flexibility to shop around even without taking ownership of the tank, which is the best of both worlds.  Apparently the companies shuffle around tank ownership among themselves in order to poach other's customers. Fine by me!


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## gasgirl (Mar 31, 2016)

twd000 said:


> 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.
> 
> ...



Hopefully you got everything worked out. Unfortunately propane companies have strict rules to follow  (based on the state they are in). Purchasing your own tank does make you responsible for maint. and here in VT a leak check is required each time a customer owned tank is filled because anyone could have filled it and the next person filling it is responsible for it safety wise. To my knowledge they don't HAVE to make you purchase the UG tank, the company you switch to most of the time would be willing to swap a tank in exchange for yours to Eastern Propane. This is not saying they don't make their own rules, as long as it is legal they can do what they want but most of the time propane companies are willing to work with you in order to keep your business. If they are not willing to bend what so ever then they aren't worth keeping as a supplier. good luck with the new home!


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## gasgirl (Mar 31, 2016)

barmstrong2 said:


> I might even push them for an indefinite price contract, if I buy the tank, based on Selkirk rack price. The price they pay for fuel is no secret. You can track any fuel price here...
> 
> http://www.bgs.state.vt.us/fuel/weekly_rack_pricing.php
> 
> Tell them you want Selkirk plus $1. That's their price, plus $1 per gallon. Right now, Selkirk is .6935 per gallon. Of course, they have additional costs to get it to their plant and deliver it, but, $1 per gallon still leaves them some room to make money, which is why any business exists. You can look up the rack price anytime yourself.



Not all suppliers purchase their gas from Selkirk, there are quite a few places the pricing can come from. The expense to a fuel company to make one delivery is $50+ to cover all of their expenses. It isn't cheap to keep a business afloat.....


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## twd000 (Mar 31, 2016)

Follow-up post:  after calling around to several suppliers, I found that the propane business is actually quite competitive here.  Suppliers are willing to quote prices over the phone, and they commonly "buy out" the tank from another company to get your business.  You can repeat this every season if you're willing to put in the phone time.  I stayed with Eastern and never signed anything.  The tank buyout and "contract" was a bluff.  I signed up for the Our Town Energy Alliance, which is a co-op that negotiates bulk rates.


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