Contractors Discuss Energy Price Spikes
November 26, 2007
PHILADELPHIA - The Energy Department’s Energy Information Administration estimates that oil-heating customers will pay an average of $319, or 22 percent, more this winter than last, in large part because of soaring crude oil prices. The retail cost of a gallon of heating oil is expected to rise by 16.1 percent from a year ago to an average of $2.88 a gallon. Heating oil is derived from crude, whose price has climbed over 35 percent from a year ago. Heating oil is used by 7 percent of American households, mostly in the Northeast.
So how does that affect customers of oil heat contractors? And better yet, what are these contractors doing to calm down customers whose utility bills are already stretching their household budgets to the breaking point?
The NEWS gathered a group of contractors who recently met in Philadelphia for a seminar to benefit the Oil Heat Cares Foundation. (See sidebar below.)
The contractors who gathered had a lot of things to say about the impact of higher prices for heating oil. One contractor, Jamie Pompetti of Pompetti Heating & Air Conditioning, Media, Pa., said although his company does sell oil heat equipment, it is primarily hydronic-based. He thinks that higher oil prices may make some customers switch over to a different fuel-based system. “We are also telling customers that they can upgrade the controls on their equipment to make it more efficient,” he said. “I’m sure we’ll see an increase in heat pump sales and the usefulness of dual-fuel systems.
“For example, an outdoor reset on a boiler can make it 20-30 percent more efficient.”
Bill Buttrill of Annemessex Plumbing & Heating, Crisfield, Md., agreed that add-on equipment could make oil heating equipment more efficient. He added, “Beckett’s Heat Manager is an example. It is an easy sell because it helps save on heating oil consumption.”
Frank Wilsey of All Steamed Up, Towson, Md., said that homeowners could be proactive and ensure that their oil heat equipment is well maintained. But sadly, that is a rarity. “Just about every oil-fired boiler we have seen has been dirty,” he said.
Customers are the ones who can make the difference, said Janice Pompetti of Pompetti Heating & Air Conditioning. “There are more incentives for people to convert to energy-saving systems. That’s good, because high energy costs will make consumers more aware of what we do. Up until now we are the last thing that homeowners think about when they buy or remodel a home. They would rather have fancy countertops and showerheads.”
Janice’s husband, James, also said, “High oil prices will eventually force people to consider the resale value of their homes - even though they still care more about how the home looks. Radiant heating is an alternative and that can help the resale value, too.”
The rising heating oil prices are just adding to other problems in the oil heat trade, according to Gordon Schweizer of All Steamed Up. “Poor service is what really hurts the oil heat business,” he said. “Oil heat keeps shooting itself in the foot. We have to fight the competition who touts ‘clean gas’ versus ‘dirty oil.’ It’s a two-headed monster with high prices and poor service.”
Another contractor, Mark Schultz of MJS Services Inc., Upper Darby, Pa., agreed. “Good, educated help is hard to find,” he said. “I just got rid of the knuckleheads in my business.”
James Pompetti said the problem is more than just poor service; it is no service at all. “Oil companies are in the business of selling oil, not service,” he said.
But will oil prices have a direct impact on the oil heat business? Two of the roundtable members didn’t think so. “All things are relative,” said Buttrill. “The impact of higher oil prices will not hurt the oil business. Other utilities will raise their prices, too.”
“Oil prices may not impact me,” said Wilsey. “It really all depends on what my competition does.”
For more information, visit www.becketthm.com.
Sidebar: Raising FundsThe phrase “All work and no play...” was the thought behind the fund raising seminar to benefit the Oil Heat Cares Foundation. Seminar attendees toured historic Eastern State Penitentiary in Philadelphia and then learned some technical steam and hydronic tips from Dan Holohan, a co-founder of the foundation.
Eastern State Penitentiary opened in 1829 and was one of the most expensive and most copied buildings in the United States at the time. Some of America’s most notorious criminals served their time in this prison, including Al Capone. When it was completed in 1836, the prison covered 11 acres, had state-of-the-art plumbing and sewage systems, 450 centrally heated cells, and was considered an architectural marvel. An interesting fact learned on the tour was that each cell had a flush toilet - amazing since at that time the United States President Andrew Jackson was still utilizing an outhouse. Seminar attendees thoroughly enjoyed touring one of Philadelphia’s more interesting, and possibly haunted, historic sites.
After the tour seminar attendees enjoyed a meal at Jack’s Firehouse restaurant courtesy of Crown Boilers. Over coffee and dessert, attendees then participated in Holohan’s seminar “Breaking the Laws of Physics - Don’t Do the Crime If You Can’t Do the (Service) Time.” The seminar raised $5,000, which is enough to complete at least two more Oilheat projects for those less fortunate.
Oil Heat Cares assists needy persons and organizations with the replacement of their oil-heating appliance.
For more information, visit www.oilheatcares.com.
Publication date: 11/26/2007