NorthJersey.com

Shop Around To Save On Heat

The Record (NorthJersey.com) — Saturday, October 11, 2008

By KEVIN G. DeMARRAIS
RECORD COLUMNIST

When temperatures dipped below freezing in some of the northern suburbs last week, we were reminded that winter is on its way and that we will have to deal with heating bills that have grown steadily in recent years.

Much has been written in the past about how to conserve -- see below for a link -- but do you know how to make sure you get what you pay for?

With natural gas, you're at the mercy of your meter and rates set by the Board of Public Utilities. But with oil, propane and firewood, you should shop around and monitor deliveries to make sure that what you pay for is what you get.

Here's the latest on this winter's price outlook, along with tips from a consumer brief recently issued by the BPU to help guide you through the buying process.

Heating oil. The vendor must provide a delivery ticket that includes the date of delivery, number of gallons, grade of fuel, the company's name and the signature of the person making the delivery. If you're home, make sure a blank delivery ticket is inserted into the meter on the truck before the oil is pumped into your tank.

If you think you have been shortchanged, contact your supplier. If that doesn't resolve the issue, contact your county Office of Weights and Measures.

Last week the federal Energy Information Administration reported that heating U.S. homes with oil will cost $450 more this winter than a year ago, and that gas, propane and electricity for home heating will go up by significant, but smaller amounts.

Fuel oil users — about a third of households in the Northeast — can expect to pay an average of $2,388 for the October-March heating season, or 23 percent more than last winter, the government said.

The prediction came on the same day crude oil prices dropped below $90 a barrel; a year ago it closed below $79 in the early stages of a run-up to more than $147 a barrel in July. That helps to explain why North Jersey homeowners were paying $3.47 a gallon last week, about 20 percent more than a year ago, according to The Record's Marketbasket Survey.

And it could get more expensive, as OPEC has promised it will attempt to pump prices back up into the $100 range.

Shop around, and remember to include the cost of servicing in comparing companies.

Also, check out New Jersey Citizen Action Oil Group, which uses its bulk buying power to negotiate discounts with local oil companies.

The non-profit promises discounts up to 25 percent, although the margin was closer to 10 percent last winter.

Still, it's worth checking out at njcaoilgroup.com or 800-464-8465.

Propane. The vendor must provide a delivery ticket that states the volume of propane delivered. The use of artificial heat, which can expand the volume of liquefied propane gas, is prohibited during delivery.

Propane, a byproduct of natural gas processing and petroleum refining, generally tracks closely to petroleum. Last winter prices averaged between $2.59 and $3.05 a gallon in the mid-Atlantic states, government statistics show. Local dealers say that prices should be in the same range this winter.

Firewood. It is sold by the cord — 128 cubic feet of stacked wood. The homeowner must receive a delivery ticket that contains the name of the seller, the delivery date, the quantity of wood delivered, the price and a description of the wood. Whole logs may be sold by net weight.

Prices vary widely. Last year Consumer Reports said you'd pay $135 to $175 a cord in New Jersey, and that is expected to rise this winter. We even saw someone trying to sell seasoned wood in Bergen and Passaic counties on eBay last week with a starting price of $240 for a cord, $140 for a half cord. There were no bids.

Whatever the fuel, it will cost you more than last winter.

Natural gas also has fallen sharply of late, and is down on wholesale markets by 50 percent from a 30-month high of $13.577 on July 3. The problem is that utilities such as Public Service Electric and Gas Co. are forced to build up supplies during the summer, so what you pay will be based partially on those inflated prices.

The one positive is that if gas prices remain low, you could be getting a refund from PSE&G, likely through a reduction next year. That's because the commodity part of your bill is a pure pass-along — you pay what PSE&G pays — while the recent 14.3 percent gas rate hike is based on estimates. If the estimates are wrong, and we pay too much, we get our money back.

That, of course, isn't the case with other fuels, which is why you need to shop carefully.

• Find money-saving tips every day on the Your Money's Worth blog: njmg.typepad.com/moneyblog/.

Your comments, suggestions and observations are welcome.

• For a refresher on energy conservation, go to: pseg.com/customer/home/save/tips.jsp.

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