Eastern Energy Expo
May 22-26, 2016
Foxwoods Resort Casino, Mashantucket, CT
Co-hosted by the Atlantic Region Energy Expo (AREE), the National Association of Oil & Energy Service Professionals (OESP) and the Pennsylvania Petroleum Association (PPA).
For more information, visit EasternEnergyExpo.com or contact Marjorie Feinman, Fuel Merchants Association of NJ (FMA), or Judy Garber, OESP.
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Here is the situation: A sales rep brings in a New Customer Application, after convincing a
homeowner that YOU are the right oil company for them. The credit manager reviews the application for completeness-name, address, contact info, permission to check credit, (likely a very low) fixed price, etc. The credit manager proceeds to "run a credit check," and from that a determination is made as to whether to dispatch a truck the next day to fill up your new customer's tank.
That process takes place hundreds of thousands of times (possibly over one million) per year, by several thousand companies. In most cases, the "credit check" is all that is required for a customer to be deemed acceptable, and for the company to spend the "customer acquisition money." The credit check is of value, and likely a good barometer of the customer's ability and historical willingness to pay his or her bills. However, is that all you need? Over the last few months, there has been a lot of talk-some of it in this space-about collecting, distilling, managing, reporting and using data. While the volume of data that you have available might be overwhelming, the non-use of the data may be devastating.
I would grant you that the higher the credit-score, the more likely it is for payment to be made. However, does that help you keep a customer for a long period of time? Does it help move that customer onto a budget plan or a service contract?
There is a harsh reality for many companies that begins right at the signing of the first customer application. That reality is that the original "status" of most new customers -non-budget, non-service plan, non-pricing plan, etc.- is not sufficient for a customer to become profitable (especially with the "teaser price" that many dealers offer to entice the customer into the fold). The notion of just slowly raising prices year after year, and hoping that the customers won't notice, is simply Fool's Gold. You need to move them from their "starting status" to a status that will engender both longevity and profitability. Anything short of that will result in continued, and very expensive, churn.
So, back to the data and to the new customer application: It is hard to know too much about a customer's future behavior before they have shown that behavior. However, the earlier you start to test and prod customers towards the behaviors that you want them to have, the earlier you will know if you will succeed. Too much of our industry's behavior is based upon the annual renewal date -a.k.a. the yearly roll of the dice. I know that I have been harping on this for a while, instead of focusing my witticisms on how to "best" trade futures and options (spoiler alert: There is no BEST way. There are only several choices, and from those you need to make a business decision), but while there is no one that I know that can either predict prices or cause them to move, there are a million (literally) pieces of information sitting in your BOS, spreadsheets and other repositories, all waiting for you to expose them to the light of day and to use them to your advantage. If you don't, your competitors will.
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Oil distributor designs new system delivering smaller amounts of oil
Oil distributer Jeffrey Suntup has designed Putnus (Suntup spelled backwards), a new system for delivering smaller amounts of heating oil, such as 25 gallons, to customers. The unit is comprised of a 118.9 gallon tank, a Smith meter, a Veeder Root register and a 150 foot Goodyear Redwing hose, one inch in diameter, including an electric rewind. It was created to fit in the bed of a pickup truck or service van and can use either AC or DC power.
The tank size allows the unit to be exempt from U.S. Department of Transportation (DOT) regulations, according to Suntup, as it is mounted on a vehicle. Additionally, a smaller tank means the vehicle operator is not required to have a Commercial Driver License (CDL) and hazmat regulations do not apply. According to Suntup, Putnus will pump as slow as two gallons a minute and as high as 28 gallons a minute.
There are a variety of ways to use the unit, from placing it on a boat to sell fuel to other boats, to placing it on a truck and delivering fuel to farmers or families across the country. When the 118.9 gallon tank is empty it weighs about 300lbs. At a full tank, the unit weighs less than 1,200lbs, according to Suntup's calculations. Considering the weight, Putnus should be installed only on stable vehicles; Suntup recommends at least a Ford F-250 to F-350.
Anytime Fuel Oil, a fuel marketer in Connecticut, is currently using a prototype of Putnus in order to provide oil to customers that are worried they may run out. Romeo's Fuel Oil, based in New York, has installed Putnus in a service van, according to Suntup. Using the unit allows oil companies like these to make smaller deliveries with low costs. Suntup noted that a dealer could charge $135 for a 25 gallon delivery. He suggested that the dealer can add a charge of $65 when making that delivery at night, on an emergency basis. The ticket would total $200, or a gross of $8 per gallon, according to Suntup.
The National Conference of Weights & Measures has certified Putnus, under its National Type Evaluation Program, for sales of fuel oil, diesel, kerosene and biofuel, and for AC/DC power and mobile and stationary use for both wholesale and retail.
Central CT Tank Fabrication & Truck Repair, based in Connecticut, is making tanks for the Putnus system as orders come in for them.
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NEFI Creates Task Force to Explore Bioheat Policies
The New England Fuel Institute (NEFI) has formed a Bioheat® Policy Task Force to examine federal, regional and state policies designed to encourage the blending, sale and use of biodiesel-blended heating oil. Encouraging regional biodiesel production and blending will assist NEFI in its goals to sustain and improve the availability, economic and environmental competitiveness of home heating oil for consumers of the fuel.
The Task Force will examine biodiesel infrastructure and supply in New England and the implications of government policies on the region's availability and supply of biodiesel. It will then report its findings and make recommendations to the Board of Directors on NEFI's policy positions and how the Board can work together with the biodiesel industry in pursuit of shared goals.Ted Noonan, of Noonan Energy (Springfield, MA), and Howard Peterson, of Peterson Oil Service (Worcester, MA), will co-chair the Task Force. Its members include NEFI Government Affairs Committee Chairperson Dave Foster, of Wilcox Energy (Westbrook, CT); Jeff Hammond, of PETRO Home Services; Roberta Fagan, of the Oil Heat Institute of Rhode Island; Kevin Rooney, of the Oil Heat Institute of Long Island; and Jim Collura, of NEFI, who will effectively staff the group.
The group has identified experts to serve as Task Force Advisers, including NEFI's Michael Trunzo and Regulatory Counsel Mark Morgan, Esq.; Paul Nazzaro, Sr., of Advanced Fuel Solutions; and John Huber, of the National Oilheat Research Alliance (NORA). The group will also reach out to and cooperate with regional heating oil and biodiesel suppliers as it conducts its work.
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New People in the Industry
Fuel Management Services, Inc. appoints new salesman
Richard Johansen is the new salesman for Fuel Management Services, Inc. Johansen's sales territory includes the Mid-Atlantic region and New England where he will be responsible for generating new sales within the heating oil and diesel markets, while helping to maintain existing business. Hi responsibilities include supporting fuel marketers with fuel performance additives, as well as providing information and education regarding all matters of fuel storage, handling and troubleshooting. Johansen graduated from East Carolina University with a Business Finance degree.
Fuel Management Services, Inc. appoints new salesman
DiversiTech Corp., manufacturer and supplier of HVACR parts and accessories, announced it has hired Nicole Kroner, CPA, as Chief Financial Officer. Kroner will be responsible for the overall finance and accounting functions for the company. She will report to DiversiTech CEO Jim Prescott.
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The New Dynamic Airflow Balancing Solution
Traditional zone control systems are reactive, responding to errors after they occur and making frantic attempts to correct airflow back to desired temperature by fully opening or closing the zone dampers. 75F launched the Dynamic Airflow Balancing solution to predict this. 75F's Google Big Query Services run smart algorithms to model the thermal envelope of the building and predict heat loads based on the weather. With over 1.6 million lines of code, its model is able to send precise instructions to the system to proactively re-balance airflow and keep ahead of temperature drifts. One doesn't drive their car looking at the rear-view mirror. The same applies for an HVAC system. Sensors collect data from the room every minute. Each night cloud computing algorithms analyze thousands of data points, including weather forecast, which allows the system to predict future conditions. A new set of instructions are sent to the Central Control Unit and the dampers are modulated a few degrees at a time to achieve the perfect balance. The system also factors in real time events, such as occupancy, to make instant adjustments to the plan as needed.
For the full article, check out the May/June 2016 Issue of ICM.
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Biofuels, Biodiesel and Bioheat®
These three terms are being heard from every quarter of the oilheating industry. Often they are used interchangeably---this is not correct. Each one has a specific meaning and knowing the difference matters. Here are very short definitions to help keep them straight. These are not meant to be technical definitions, but a usage guide.
Biofuel: a fuel derived directly from living matter. Often used as a generic term that may include various fuels such as biodiesel or ethanol. Usually considered renewable.
Biodiesel: a very specific product produced in a very specific way to meet very specific specifications. The feedstock to create biodiesel can vary and may include soy oil or tallow. Here is what the National Biodiesel Board has to say about it: "a fuel comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, designated B100,
and meeting the requirements of ASTM D6751." If not... it's not biodiesel.
Bioheat®: A registered trademarked name whose definition is a liquid fuel that is comprised of a blend of petroleum #2 distillate fuel (heating oil/diesel) and Biodiesel (see above). To meet the definition, the petroleum component must meet the ASTM D396 standard and the biodiesel component must meet the ASTM D6751 standard. If those two criteria are not met, it can not be called Bioheat®.
Remember, biodiesel is a biofuel but not all biofuels are biodiesel. Also, biodiesel is the only acceptable biofuel component in Bioheat®
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Gas Appliance Service/Timmie McElwain
Upcoming Training Sessions
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