Leaving one's gas delivery company (in a planned development)

[dpb]

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Every place is different as are the distributors...pick up the phone and call.

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[DA]

Hi all,

I live in a development where a certain gas company owns most of the gas tanks, mine included (through a deal with the developer of course). The home is heated with LPG and I have a 1000 gallon tank. Being a monopoly that they are, they pretty much do whatever they want regarding prices and, although I can understand gas price fluctuations due to market, they keep raising their own fees for no reason that's apparent to me. I've received a second notice about them raising the service/delivery/labor/whathaveyou fees in less than 3 years that I live here, approx. 20% this time.

My gas company is couple towns over from me although there is another one right here in town, so I'm tempted to see what my options are and try to change the gas delivery company.

I do realize that them owning the tank puts me at a big disadvantage because I basically have to purchase the tank from them before I hire another company. However, there may be other expenses I don't know about that I should account for making the decision to leave, like the new company having to spend several hours onsite "evaluating" the pipes and furnace, or some such.

I wonder if there are people here that have successfully made the switch that can comment on what's involved in a move like that and what hidden expenses to watch for. Thanks!

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[Caesar Romano]

On Mon, 15 Nov 2010 17:53:14 +0000, info_at_1-script_dot [e-mail] (DA) wrote Re Leaving one's gas delivery company (in a planned development):

No you don't have to purchase the tank. Your new company will provide the tank, probably on a rental basis or possibly "free" as long as you buy your gas from the new company. Check what the new company has to offer. Shop around.

You will probably be able to arrange for the new company to deliver the new tank and fill it and then come back and switch the line to the new tank when the old tank is empty. Then you can call the old company and tell them to come and pick up their tank.

[DA]

Thank you for your suggestions, Caesar, but I would have to admit that digging the tank out (it's buried) is a show stopper for sure. I would of course much prefer if the new gas company "inherited" the tank under some provision. I have heard horror stories about tanks leaking and homeowners having to refill 800+ gallons (and potentially liable for a damage) when the homeowner owns the tank outright. I guess, I would prefer that the gas company also had a stake in keeping the system leak free and operational.

I am planning on shopping around, indeed. Just looking for people's suggestions about what important questions to ask the potential new delivery company.

Thanks for your suggestions, everyone!

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[Kurt Ullman]

Since that comes with the homeowner association, do you even have a choice or is it mandated by the covenants? The second question, which I haven't a clue about, is this tying legal? One of the developments in the area tried to make it mandatory that you sign up with their internet provider. I know there was some dust-up, but I don't know the outcome.

[A. Baum]

Around here the city automatically signs its residents up for a aggregate plan for gas 'providers' that you can opt out and chose your own with no penalty. As far as delivery goes that's handled by the local gas company responsible for the hardware.

[HeyBub]

Psst: Most likely, you own the tank.

Things (buried tanks, fences, carports, decks, etc.) permantly attached to real property almost always become part of the land-owners real property.

"The difference between real property and personal property is ordinarily easily recognizable. The character of the property, however, can be altered. Property that is initially personal in nature becomes part of realty by being annexed to it, such as when rails are made into a fence on land."

Review "additions to real property"

[DA]

Well, it would be nice it it were the case but I think here I have suspended my ownership (or granted the gas company a sort of easement) by signing an "Underground Tank Agreement" before even moving in. I believe the realtor had me sign it at the settlement although, curiously, there is no date on the agreement to refresh my memory on when it was signed. I was buying the home owned, not directly from the developer.

The agreement stipulates in its first sentence that: "This will confirm that the X Oil Co. owns the 1000 gallon underground Propane Gas Tank located at the above property and it is agreed that all propane gas will be purchased from X Oil Co. which will maintain the tank and regulators associated with this installation, so long as it remains the property of X Oil Co."

The agreement gives me right to re-purchase the tank at "pro-rates basis" (meaning of which I don't quite understand - the tank itself does not get used up or worn out) or pay the Co. $1500 plus labor to empty and remove (dig out in my case) the tank.

Since digging it out is not really an option (not the one I would go for if I had a choice, anyway) due to a very inconvenient location, fencing, landscaping etc., I'm left with purchasing the tank from the Co. Does anyone have any idea about a fair price to pay in this case?

Also, if there is a different way to read the "property of X. Oil Co." stipulation, I would love to know more details.

Thanks!

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[Sjouke Burry]

HeyBub wrote:

In NL we have a law that forbids forced contract parts when buying a house. Example: a forced cable tv contract, or in your case a forced contract to an oil firm. Which makes the said contract extension null and void. We are even advised to just sign the house sale contract, because any such "riders" in the contract are illegal. You might check into that,and also check with the ?small biz.. bureau?.

[Steve Barker]

there's no reason at all you shouldn't be able to buy LP from whom ever you please. And if the first company owns the tank, tell them to come get it out the way , now!

[Ed Pawlowski]

New company won't touch the old company's tank. You'd have to buy it first. They may or may not be willing to sell it to you and the price will be high. New company won't take ownership of your used tank either.

[HeyBub]

Ah, okay. You signed away your rights. They said "Bend over and I'll drive you home," and you did.

I guess you could dig it up yourself. Looks like its about a yard wide, nine feet long, and weighs between 900 and 1000 pounds (empty).

Still, you're not a pioneer. Your company's competitors have been through this before. Give 'em a call.

[Robert Neville]

After carefully reading the current contract to find out what the charge (if any) is for removing said tank, of course. Personally, I'd call a few competitors and ask them what the usual local solution is for this situation.

There's a couple of factors to consider. Around here, the dealers rent tanks for about 1/15 of what they sell for new. That is, $75/yr to rent, $1000 to buy. Given the time value of money and the fact that the tanks have to be recertified every 20 years, buying isn't as straightforward as it seems. It does give you the freedom to call around and get prices every refill, but depending on the weather and accessibility of the tank, you lose the guaranteed delivery of a contract fill.

[Colbyt]

I have been lurking in this thread from the start.

I like Steve's answer the best.

I have not had any LP dealings for many years but the tank, the install and safety check were always included as the cost of doing business.

Colbyt

[Hank]

I changed gas providers a couple of years after moving in my new house. Original tank was under a lease plan so had to buy the gas from them. BUT they always forgot to let me in on their pre-buy price plan that locks in a low price before the heating season started. My tank was buried too. Contacted another company that had good plans. Asked them to take over my tank. Said they could unbury the old tank and put it out for company to pick up. Then they asked how old tank was I said

3 years. They contacted current leaser and although they were reluctant and dragged their feet they finally sold my buried tank to new company. Tank is now owned by new provider and still leased. Got great pre-season prices now. No problems.

email response not expected but to respond remove .uk at end TIA Hank

[DA]

Thank you for sharing, Hank. Do I understand correctly that you did not really have to pay for the tank outright, other than over time through the purchase of gas from the new company, of course. Did the new company want to do any tests on the tank/lines before taking it over?

Thanks again!

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[chaniarts]

i own my 500 gallon buried tank. i get a quote from 5 different places before filling it about once/year. some didn't have any inspection before first delivery, some did. none have asked to reinspect.

[DA]

Thanks, chaniarts.

I looked at my yearly usage and last year I used 762 gallons (heating and hot water only - cooking is electric) which is almost the 800 gallon max that they can fill 1000 gallon tank at. I guess, I could possibly do a once-a-year fill up, too.

I also got some figures to go by: the current gas company wants $5,000 for the tank (4 years old). They are selling LPG at $3.2/Gallon which is approx. $0.60/Gallon higher than average (11/15/2010 residential propane data from

). So, I guess, assuming I can find someone selling at the average price, the $5000 tank will get me even after 8333 gallons or 11 years of usage, just about.

I guess, having someone else take the tank over looks like an attractive option given the $5000 price tag but that puts me very much back to were I am right now - dependent on a single company's pricing.

Does a 4 y.o. 1000 gallon buried tank really cost $5000?

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[chaniarts]

what about just abandoning it in place and getting a new one installed? call up someone and ask how much a new tank installed would cost. iirc my tank was about 2k installed+permitting/inspection fees.

my last fill in june this year was at 2.15/gal but that was because it was a new company in the area and it was the first time i used them. they had an initial inspection fee ($40) but waived it because i was getting a fill. they found a couple loose screws on the guage and fixed everything for free to.

i try to buy in times where there isn't heavy demand, since i fill it so infrequently, so am not on a monthly top-up schedule. my neighbor is on one of those schedules, and pays significantly more per year since he's locked into a specific delivery company (which also owns his tank like your situation).

[chaniarts]

>

added note: usage is highly dependent upon location. my house is gas heat/water/dryer/2 fireplaces, but i haven't turned on my heat yet. i probably won't until xmas, if then.

my herd of 7 cats keeps us plenty warm at night. :)

regards, charlie phx, az