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Saturday, August 2, 2014

New law protects NH prebuy heating fuel contracts

CONCORD – As expected, Gov. Maggie Hassan has signed a law that tightens prebuy contracts for home heating oil following much publicized delivery problems last winter by Fred Fuller Oil & Propane Co., one of the state’s largest distributors of heating oil.

For consumers, the biggest change is that prebuy contracts, in which you pay well in advance for fuel deliveries for the upcoming winter, can’t be advertised before May 1, although consumers can still request early contracts. ...

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CONCORD – As expected, Gov. Maggie Hassan has signed a law that tightens prebuy contracts for home heating oil following much publicized delivery problems last winter by Fred Fuller Oil & Propane Co., one of the state’s largest distributors of heating oil.

For consumers, the biggest change is that prebuy contracts, in which you pay well in advance for fuel deliveries for the upcoming winter, can’t be advertised before May 1, although consumers can still request early contracts.

Fuller Oil, which has been in business 45 years, is unusual in the state’s oil delivery industry because of its aggressive sales of prebuy contracts.

Most firms in New Hampshire don’t sell such contracts until April, but Fuller has consistently sold contracts in January, often at very low prices. This year, Fuller Oil began selling prebuy contracts for next winter in early January, even as it was having so much trouble delivering existing contracts that some customers ran out of oil during cold stretches in January and early March.

Early sales of prebuy contracts are frowned on in the industry because of concerns that providers might use the money to buy supplies in the current winter instead of ensuring that fuel will be available for the next winter. That can leave suppliers short if problems arise, stranding consumers.

Over the years, New Hampshire has seen several cases in which firms selling oil, propane or kerosene for heating went bankrupt during the winter without having supplies in hand to supply customers who paid in advance.

The new law, HB1282, makes it a misdemeanor to not deliver heating fuel under a prebuy contract. Currently, the state has no way to enforce such contracts.

The law also increases inventory requirements for firms that sell prebuy contracts to make it less likely that oil won’t be available for customers who shelled out money early.

“In recent winters, a rising number of New Hampshire residents who have prebuy oil contracts have found themselves in danger of running out of heating oil and facing an emergency situation,” Hassan wrote in a statement. “This bipartisan legislation represents an important step toward increasing consumer protection for residents who have prebuy contracts.”

Hudson-based Fuller Oil faced sharp criticism last winter after customers reported that some automatic refills were not being made, but they couldn’t reach the company’s half-dozen offices around the state. Many customers reported to The Telegraph and other news outlets that they had run short of fuel or out of fuel during the “polar vortex” in January and another cold snap in early March.

The state eventually established a 24-hour hotline, which handled hundreds of calls from stranded customers over five days, and billed Fuller Oil $21,000 for the service, which the company paid.

The New Hampshire Justice Department also required Fuller to provide information showing it had the wherewithal to meet all of the prebuy contracts it had sold.

David Brooks can be reached at 594-6531 or dbrooks@nashua
telegraph.com. Also, follow Brooks on Twitter (@GraniteGeek).