First winter paying attention to propane costs - price protection?

[HeavyDuty]

I’m on a community LP tank here in NH. I bought the house late enough last year that I wasn’t eligible to participate in a price protection program. I have a metered connection to the big underground tank that is shared by 16 units.

My vendor is offering a cap of 2.149 per gallon for a .20/gallon fee up to 695 gallons, which appears to be based on past usage. If it’s lower, I pay the lower price. I prepay the .20/gallon for the 695 gallons up front.

This seems like a good idea. Do any of you people on LP have something similar?

[Snapshot]

Not a propane user here but high propane prices fail to put the brake on exports (https://rbnenergy.com/whats-price-got-to-do-with-it-high-propane-prices-fail-to-put-the-breaks-on-exports) so perhaps a fixed price would be advantageous.

[JTQ]

When I lived in northern Maine, I used the fixed price average on fuel oil. It worked out fairly well, if I recall correctly.

Conversely, now in Florida, I've elected to not use the averaging for electricity.



I have a metered connection to the big underground tank that is shared by 16 units.
I'm kind of intrigued how this would work, and do all 16 need to choose the same option?

[blues]

I generally have come out ahead with the lower price protection guarantee. (I have a 500 gallon in-ground tank.)

I'm using less propane now, so we shall see if it remains worthwhile.

[JohnO]

There is a big propane distributor in the next town. I fill my grill tanks there as their price is always the best. For as long as I can remember it was $10 for a 20 Lb tank. I just filled a few weeks ago and the price jumped 20% to $12 for a 20 Lb tank.

[HeavyDuty]

I'm kind of intrigued how this would work, and do all 16 need to choose the same option?

No - we all have individual metered connections, the fuel company keeps the shared tank or tanks (not sure what it is) full and charges each user as it’s drawn. And the price is based on time of usage, not when the fill is done.

[HeavyDuty]

It’s sounding like there really isn’t a downside beyond the .20/gallon lock cost. Thanks, gang!

[Lex Luthier]

The place we lived in Santa Cruz was all individual tanks (varying from 150 to 500 gal) with 290 homes in the development. The two big vendors used to try and get us to commit in blocks of 60 or so, and they gave a pretty nice price discount for the group rate.
.20 cents a gallon to lock in at a max $2.14 a gallon is a better deal than we got. We were paying $3.50/gal a decade ago. Dooo Eeeeet.

[Bratch]

Can you get pricing lower than $2.149 if that is the going rate or are you locked into paying 2.149 all year?

We paid less than $1.50/gal last year. I’m not sure how regionalized propane prices are but oil and nat gas are both up this year which should be pushing propane prices up.

Some providers will let you prepay without up charges, I’m not sure how that would work on a communal tank.

It’s all a bet on if prices are going up or down from here.

[HeavyDuty]

Can you get pricing lower than $2.149 if that is the going rate or are you locked into paying 2.149 all year?

We paid less than $1.50/gal last year. I’m not sure how regionalized propane prices are but oil and nat gas are both up this year which should be pushing propane prices up.

Some providers will let you prepay without up charges, I’m not sure how that would work on a communal tank.

It’s all a bet on if prices are going up or down from here.

The plan always gives you the lower price, which is why I decided to go with it. The 2.149 is a cap.

[TDA]

Unless the market does something crazy, fixed price and cap programs almost always are a better deal. The dealer has a pretty good idea what you’ll use, and can buy product at a better price and lock in their margin, instead of buying more expensive product later in the season and maybe not getting good margin.

[Snapshot]

^^^ This. Because one polar vortex, or any disruption in processing, transporting, storage, etc. & the spot price goes way up, way fast.