The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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22 NOVEMBER 2016 | FUEL OIL NEWS | www.fueloilnews.com ranges from Maryland to Maine, and Pennsylvania to New York, including Long Island. Silverman said that the findings from the analysis differed markedly from the estimates that attendees gave in the impromptu setting of the conference. Dealers attending the SNEEC session said they thought their average delivery to 275-gallon oil tanks was 170-180 gallons. The analysis showed that for the 17 companies the average delivery to 275-gallon tanks was much lower than that: 148 gallons. Only one company in the study had an average of more than 166 gal- lons, Silverman said. Of the analyzed deliveries, 41% were "problematic"—either over 210 gallons or under 130 gallons, Rich Goldberg, president of Warm Thoughts Communications, Clifton, N.J., said in an interview. Goldberg's marketing and consulting company helped in the presentation of the findings. He said two-thirds of the problematic deliveries were too small to make money. Dealers, wary of letting customers run out, were erring on the side of being "radically inefficient," Goldberg said. In the analysis, a typical customer who received 900 gallons had 6.5 deliveries per year. Through the implementation of a tank monitoring system, a dealer can increase the average deliv- ery to 205 gallons, reduce the number of deliveries per year to five, and still avoid run-outs, said Goldberg. He calculated the following benefits based on a $79 cost per tank monitor mar- keted by Angus' Paygo division, including a monthly monitoring fee of $2: Figuring a cost of $50 per delivery, the decrease of 1.5 deliver- ies saves $75 per year. That enables the dealer to break even on the tank monitor after one year. After that, the dealer can make $40-$50 more per year per customer. The monitoring device screws into one of the bungholes in a residential tank, and uses sonar to read the level of fuel, communicating the readings to the dealer via WiFi in the cus- tomer's house. The system works with a number of back office software programs used in the fuel oil industry, Goldberg said. The number of gallons used by a customer each day is recorded automatically in his or her account. The Paygo system gives cus- tomers an app with their dealer's name on it, Goldberg added. It allows customers to use their smart phones to check oil levels, daily use, the approximate date of the next delivery, and to press a button to call in an order, Goldberg said. It fits the changing buying habits of smart-phone wielding customers, he said. Tank monitoring eliminates the need to try to guess fuel levels based on heating degree days, Goldberg said. He noted that a NORA study showed up to 25% of homeowners with oil- fired heating now have ancillary heat sources, pellet stoves and heat pumps among them. That makes estimating heating oil consumption much more difficult, he said. "If a person with a pellet stove decides in November not to turn on the oil heat yet, or that he's going to heat half of his house with the pellet stove, the dealer isn't going to know that," Goldberg said. Meanwhile, the heating degree-day system would indicate that account needs a certain number of gallons, Goldberg said, "but all of a sudden it doesn't." With a monitor, the oil dealer can let the level in a tank drop lower, without worrying, and can deliver a larger amount, later, "because you know exactly what's in the tank at any given time," Goldberg said. PROPANE PITFALLS TO WATCH FOR Among the biggest mistakes heating oil dealers make when diversifying into propane are failing to create a comprehensive, workable business plan and failing to budget accurately for capi- tal expenditures, said Tom Jaenicke, a vice president of Warm Thoughts Communications, and Tom Kilgallen, a consultant affiliated with the energy marketing and consulting company. Thorough planning and budgeting are more and more important because the propane business is more and more competitive. "Increasingly, every oil company has a propane division," said Goldberg of Warm Thoughts, who helped pre- pare the presentation. "The number of propane suppliers is A detailed diagram of an accident can influence an insurance adjuster, a jury and a judge, and video can be even more impactful, Joe DiFranco told attendees of his presentation on accident reconstruction. DiFranco, vice president in the investigations division of Energi Insurance Services, Peabody, Mass., said forward-facing cameras can be mounted in the cabs of delivery trucks and service vehicles. PHOTOS BY STEPHEN BENNETT Southern New England Energy Conference