A National Resource to Support Excellence in Community Action

Heating Oil Purchasing Initiative

Last Revised: Oct 14, 2008 - Initial Posting: Dec 16, 2002
Purpose

Regional Economic Community Action Program administered the Heating Oil Purchasing Initiative Program (HOPI), which provided discounted pricing for heating oil to families at 80% or lower of the State median income (i.e. $47,808 for a family of 4 in 2002).

Description

Note: This program is no longer active, but information is being continued on Virtual CAP to help others develop this type of initiative

The Regional Economic Community Action Program (RECAP) purchased #2 heating oil at a negotiated price from local vendors that was referred to as the "Right Price." An additional 4 cents per gallon was added to the customer cost to support the CAA's administrative expenses. Both homeowners and renters could participate. The CAA serves a single county that is suburban with a rural character (pop. 345,000). An estimated 40% of the population uses #2 oil based on estimates from surveys were distributed to 80 vendors (25% responding).

The "Right Price" was been approximately 2/3 of the retail price.  For example, with a negotiated price of 21 cents above the wholesale price of 77 cents, the customer's price was established at $1.02 per gallon ($0.21 + $0.77 +$0.04). This provided savings of 46.9 cents per gallon compared to the retail price of $1.489.

A description of HOPI was distributed with information on how to apply for assistance.  Based on the example cited, the savings per family for the entire heating season would be $375.20 based on purchase of an estimated 800 gallons of oil.  The combined savings for all families would be $75,040 based on targeted participation by 200 families during Year 1.

The program was funded as a demonstration project through a grant from the NY State Energy Research and Development Authority using set-aside funds from customer utility bills ($1.05 million was distributed for 3 projects). Funds were used to cover purchase of fuel, staffing and operational costs. Ultimately, the program was intended to be self-sustaining as customers pay for the fuel they purchase.

Assistance was provided with cleaning and servicing oil powered heating systems with costs covered by program funds. Weatherization services were also available to eligible families. An Advisory Committee was formed to assist with outreach and coordination with other programs. The Advisory Committee included representatives from DSS, Office on Aging, related non-profits, the CAA, and business (i.e. fuel vendors).

Efforts were also undertaken to enable LIHEAP funds to assist eligible families (presently the CAA does not qualify as a LIHEAP vendor). Designation as a LIHEAP vendor would increase the number of families served by LIHEAP since HOPI was able to acquire a lower cost per gallon for oil than normally paid by LIHEAP.

Outcomes

Financial benefits to low-income families included the actual savings on fuel costs plus reduced fuel usage as a result of (a) improved heating systems through cleaning and servicing and (b) home weatherization. Oil companies benefited by receiving immediate payment from the CAA on behalf of customers whom would normally be at higher risk of having delinquent accounts. The CAA collected payments from customers that result in saving oil companies billing and collection costs.

Contact

Anthony Figueroa, Director of Planning, Development, and Corporate Compliance
845.342.3978