Connecticut businessmen take a bite out of home heating oil costs

Their fuel co-op saved neighbors an average of $200 last year.

By , Associated press

Three local businessmen are taking a bit of the chill out of winter for themselves and more than 100 of their neighbors.

While they can't take away the snow and ice, they do promise to save their neighbors money on home heating oil — about $200 a year in many cases.

Prospect residents and friends Ron Flormann, Joe Minoski and Jim Yacavone began a local oil consortium last summer to use strength in numbers to cut delivery prices for heating oil.

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They went from mailbox to mailbox in their neighborhoods armed with fliers advertising their idea. They started calling every local person they knew. And when all was said and done, they signed up 118 participants, representing 100,000 gallons of home heating oil annually.

Mimicking the way many municipalities and school systems do business, the Prospect Oil Group solicited proposals from local oil companies. Eight companies bid, and the lowest came from Lehigh Fuel in Waterbury, Conn., which offered members of the consortium fuel at 30 cents a gallon lower than the then-market price of $2.59 a gallon. The company also gave each customer a $75 discount on an oil burner service plan.

"On average, people saved between $150 and $200," says Mr. Flormann, general manager of the healthcare division for a Scranton, Pa.-based company called Noble Biomaterials. "People had enough of the high prices and decided they needed to do something to save."

Flormann and his friends take no money for their services and charge no operating fees.

"Once we have the company in place, we're out of the transaction," Flormann says. "Your deal is directly with the oil company."

While the group is mostly Prospect residents, anyone can sign up. Whether they receive the discount will depend on whether the chosen oil company delivers to their city or town.

The group will accept people until June 1 and hopes to get 300, a goal members believe is within reach — Lehigh Fuel said prebooked prices for next year are currently estimated at $3.79 a gallon.

There is no guarantee Lehigh will be the supplier this year as the group will have another competitive bid process.

"This is good for the customers and the oil company," says Mr. Minoski, who works as project manager for Konover Construction Corp. in Farmington, Conn. "We save money, and they gain a big customer list."

There are more than 25 such fuel cooperatives nationwide, and some groups have up to 10,000 members. A West Hartford, Conn., group called Citizen's Oil Co-Op has 3,000 residential members and sometimes gets as much as 48 cents a gallon off the market price of oil.

Phil Sherwood, legislative director and spokesman for the Connecticut Citizens Action Group, said he can think of no downsides to joining a consortium.

"The benefits probably won't be huge to any one individual," he says. "But anything we see in regards to saving on oil is a good thing, and bulk purchasing is the way to do it."

The Prospect group doesn't know how many people took advantage of the Lehigh discount, but believe many utilized the service.

It's a wonder why it hasn't caught on more in other municipalities, says Mr. Sherwood. "People just don't know they have the powers to organize other citizens against big oil."

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