Backup heating source is Propane, school me, please

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Been buying propane since the days it came in 100# bottles on a 1 ton flatbed and the man with a 2 wheel truck swapped the "empty" for a full bottle. I think he often took quite a bit of propane back with him.

The switchover to bobtail trucks and metered delivery brought a new set of problems, and the new game of changing dealers every few years over this brawl or that. Honestly, looking back buying propane for the house was always a lot like getting screwed with a dull chainsaw. Back in 95 along came Level Propane. Great business model, all new equipment and damn good pricing. The rich man behind the company got bored with propane and put a man in charge he had run under buying up and taking over territory. The rest was guaranteed. A hell of a lot of Level customers wound up cold and holding their hand on their ass as the survivors mined their wallets. They gave up any advantage they could have had by failing to learn.

Simple enough here, Townsend Oil had seen the writing on the wall, bought a couple bobtails and hired Level's employees. Direct switchout and same people. 3 years down the road Townsend got big and clever. Then Townsend got BUSTED by the Sheriff for selling him underoctane fuel. Townsend got more clever and I told them to stop filling me, I even padlocked the tank after the fool driver overfilled the 100 gal tank.

I was fortunate to know a bit more about propane than most buyers, so I used what I knew to obtain my own tank, actually Level had left 3 on my property over 18 months, set it up and drift 100# into the 500 from a bottle. Then I went shopping.

Some vendors have office staff who know exactly what the screen in front of them says, they learned their craft in College, and they are worthless to deal with unless your desire is to get screwed.

Vendors all pay pretty much the same for propane from their supplier, and the big guys like Agway, Suburban and Amerigas should be able to sell at lower price due to economy of scale. They won't because that doesn't fit their business model.

Propane vendors learned around 2000 that they could not only charge around 40¢ per gallon to put their product in their tank on your property, they could also charge annual tank rental fees. It was a windfall to their profit and money they could invest in propane futures. They ran with it.
Some even learned to stick the customer with underusage charges from the Level fiasco, and ran with that too.

Pretty much all tank truck drivers are paid by gallons delivered, generally the rate is 25¢ per gallon.

Propane salesmen are creatures of habit, probably former car salesmen. They play games. When you know the game you can win.

Currently we have returned to the business model of the 1950s, Fuel Brokers. A broker needs a computer and a phone and nothing else to be in business. Vendors like brokers, brokers eliminate having a salesman on the payroll. Brokers only get paid for what they sell. Find one and you save money.
 
Not sure if we've been grandfathered in or if our usage is "adequate" from their perspective, but we have a Crystal Flash 500 gal tank (been there since we bought house) that gets filled once every two years or so (only used for hot water and cooking) and we haven't ever been charged a rental fee. Now maybe the previous owner bought the tank from them, or maybe they're fine with us buying 400 gals every two years; I'm just glad they don't hassle us about it.
 
After installing the owb 2 years ago I used the 25% (100 gal) still in the 500 gal tank up a couple weeks ago. Use it for cooking, back up furnace, back up hot water. Two weeks ago installed 2 100# tanks I bought on craigslist last year. Using about 50 gal a year I will have to fill the 100# tanks maybe 3 times a year.
Would be nice to have the 400 gal of propane sitting there in case of emergency, but paying $800 to fill it seemed a no brainer to me. Plus I didn't like the location of the big tank and needed it moved.
 
Fortunately, I always owned my 500 gal tank but I switched to wood when I thought the regional propane companies were playing games by not honoring summer contracts anymore and the return of capital for a wood stove was only 2 years so it was really a simple decision to make. This move has also allowed me to buy propane near the absolute lowest price. My last buy of propane was in 2009 when I only paid $1.19/gal. I only used 50 gallons since then.

I would look for a minimum size 250 gal tank because around here they charge a higher rate for less than a $200 purchase. I would also look on craigslist for a potential source of a tank. Around here from time to time you can get a used 500 gal tank for $250- $300.
 
Had a 500 tank here when I bought the house. Used it heavily for a few years and then got wood smart. The first season of wood burning resulted in a letter claiming the low use yearly fee. I paid it thinking this is gonna suck to pay every year. It's been three years since the last I heard from them. maybe I got lucky and they "forgot" about me. Maybe I just jinxed myself? If I get another letter, I'll politely tell them I was going to switch to competitor x anyway and they can come get their tank....call their bluff, it may work out in yiour favor.
 
Remember when propane was such a good deal we used to fuel our pickups with it?? I had a 1986 3/4 ton Ford w/460 that I ran on propane and regular gasoline. Truth is I rarely ran it on gasoline when the propane was cheap back in the 80's and into the early 90's! What a great hunting rig, 60 gallons of propane and about 36 gallons of regular gas. You could stay out there for weeks, and I did!

Back to reality, I have a friend who is a plumber/heating/AC company owner in central eastern Nevada (where it gets cold in the winter) where I used to live and I saw him a couple of weeks ago. I stayed with him while enroute to my home from a motorcycle trip. He said, "We're really busy right now!!" I said, "That's good, what's going on?" He replied, "We're installing electric furnaces, and some heat pumps because propane is too expensive."

You coulda knocked me over with a feather. Electric furnaces are cheaper than propane furnaces, WTF!!!!

I remember when propane was kinda the waste fuel, and super cheap. Well they sucked us in.....................and now???

Anyway, the "deal" in this small eastern Nevada town is that there is now only one Propane distributor, with no competition, and that distributor is taking advantage of the situation. Go figure!! When I lived in the area over 20 years ago there were 4 distributors.

Competition is always a good thing!

Thanks,
 

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