Propane contracts

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DAYDREAMER

Recycles dryer sheets
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Mar 26, 2008
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I called to have my propane tanks filled by the company that always fills them. They told me i have to sign a yearly contract of $90 to lock in a propane rate of 2.75/gal or else pay the market rate which they said was 4.95/gal. I also rent my tanks from this company for $68/yr. I have 2 houses that use propane, and my other house was recently filled by a different company that charged me 2.45/gal with no contract whatsoever.

Question to ER group that use propane------did you have to pay a yearly fee to lock in a rate which protects you from having to pay a "so called" market rate?

Needless to say, i am having this company remove their tanks and i will buy my own tanks so i can have different companies to chose from.
 
I've heard of some suppliers having a lock in plan. I'm on a "never out plan" , they come by and add some as needed. No special price. 2.75 sounds more like the market price, 4.95 is crazy.
 
I have a 250gal propane tank at my house and my biggest regret was not purchasing the tank from day one. As I'm sure you're well aware when you rent the tank you're stuck with that company to fill it. And no, I've never heard of a special fee for locking in a rate, at $5/gal I'd be running to. The first propane company I had started charging a higher rate if you didn't use a minimum amount of propane each year, I dumped them as soon as I found out. I must say $2.45/gal is a good rate. The price of propane here closely follows the price of regular gas +/- $0.20/gal.
 
In our area, most tanks are owned by the propane companies. Generally no rental fee unless you use very little propane.

I've never heard of having to pay a fee to lock in a rate - around here you just sign a one year contract that they will provide up to a certain number of gallons during the season at a specified rate. We do have some buying groups or buying clubs that negotiate special deals with suppliers that sometimes charge a membership fee of $25 to $40.

I paid $2.21 market last summer. My contract price last year was $1.69 and this year is $1.75, both of which are screaming deals for this area as I was able to get in with a large group that has a lot of buying power.
 
No lock in contracts here. We paid $2.65 last year. We've used maybe 300 gallons in the past year, and I expect the price per gallon to be similar this year. They do give 5 cent/gallon discounts for payment plans, senior discount, and automated meter discount. But, I prefer to pay once (when it is filled) rather than over 12 months, I'm not a senior (yet), and they took away my automated meter because we didn't used enough propane in a year to justify it for them.

We do okay a $90/yr rental fee for the $500 gal tank.

R
 
Our cabin is in a co-op, very common in Wisconsin. We rent the tanks and have to pay a fee, but they say that fee is because we aren't using enough (not there full time)

When we build there I presume that fee will go away.
 
owning your own tanks and negotiating with different suppliers is how I did it when I used propane. the thing about owning propane tanks is that they do not depreciate hardly at all. I bought a 500 gallon tank for 1000 dollars had it for 10 years and sold it for 1000 dollars.
 
just paid 2.71 .... no rental fee on the tank ... choose to leave them with the install and liability
 
We lived in a propane-heated house in southern Ohio in the 90s, and in our area this was so common as to be considered normal business. For a house with a contract, your per-gallon price was guaranteed to be the same for the entire heating season. Without a contract, you paid spot price.

There was no problem with local suppliers filling tanks that didn't belong to them, so that wasn't an issue. But I wanted a larger tank, so I bought my own when I found a special deal and that seemed a good decision.

Haven't had propane for nearly a decade, so no idea what the current practice is.
 
Around here no supplier will touch another supplier's tanks. To switch suppliers the existing supplier will come and get their tanks and credit you for the propane in them and then the new supplier will set up their new tanks and fill them with propane. That's my recollection anyway.
 
pb4uski said:
Around here no supplier will touch another supplier's tanks. To switch suppliers the existing supplier will come and get their tanks and credit you for the propane in them and then the new supplier will set up their new tanks and fill them with propane. That's my recollection anyway.
Click to expand...

That's how it works here in Arizona.
 
Hmmm, interesting nobody on the forum has heard of a propane lock in fee to guarantee a particular "rate". This makes me think maybe this particular company is running some kind of scam that might not be legal. I know that propane is not a utility, and is allowed to be an open market, but there must be some rules they have to abide by. Time to start digging a little more
 
DAYDREAMER said:
Hmmm, interesting nobody on the forum has heard of a propane lock in fee to guarantee a particular "rate". This makes me think maybe this particular company is running some kind of scam that might not be legal. I know that propane is not a utility, and is allowed to be an open market, but there must be some rules they have to abide by. Time to start digging a little more
Click to expand...

Never heard of it. Propane is not a scarce commodity, especially with the overabundance if natural gas production in the U.S. these days.
 
We've had contracts where we agreed to buy a minimum number of gallons of propane during the heating season but didn't have to pay an additional fee for the privilege. When we moved to WV, we bought and installed our own tanks so can shop around for the best pricing, usually in the summer.

You might be able to purchase your existing tanks from the current supplier, probably won't be a great price but might be worth it to not have to go through the hassle of the change out and still end up with the flexibility to find the least expensive supplier. We did this at our last house for one tank.
 
:blush: a little off topic, but:

While we heat with Natural Gas, the subject of propane cost was interesting to me, as we typically use it for our grilles, and buy 3 to 5 20lb tanks per year. We also use a 100 lb tank at our camp for heat and cooking. It was interesting to see the relationship of pounds to gallons and to find that there were many other things that I never knew about the "way it works"... like why different sources offer different amounts... and that 20 lbs, is not 20 lbs. That even major commercial sources such as Costco, fill to different levels, and why the sales slip for a refill has a temperature rating. That tanks have to be recertified after 10 years, and that the pressure relief valves initiated years ago, can change the amount of propane being pumped, or the way in which the refill stations determine a "full tank"and that it should weigh 37 pounds.
Not earth shaking, but I'd guess that more people use propane for BBQ grilles than heat with propane.

Can't vouch for the veracity, but the website is food for thought.

The Truth About Filling 20 LB BBQ Grill Propane Tanks | Web Design Greenville SC

Note: some of the comments were as interesting as the article itself.
 
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braumeister said:
Read my post again.
Click to expand...

Oops, Sorry Braumeister, I often brouse read and dont comprehend content:facepalm:

My problem with the whole thing is, i'm willing to pay the market rate, except this company is price gouging what they call the market rate(they say $4.95/gal), when other companies are selling propane from 2.25-2.45/gal with no contract.

Maybe i dont fully understand what market rate is.
 
Are most folks tanks above ground or buried ? Mine is underground ( HOA requirement I think, all the homes have propane ).

Also mine is leased, annual fee. AFAIK I can purchase gas from anyone I want. I pay the lease fee for them to maintain the tank.
 
My local company offers the lock in contract but their price is low end of the market around here so I have not signed a contract and don't worry about it.
 
DAYDREAMER said:
Question to ER group that use propane------did you have to pay a yearly fee to lock in a rate which protects you from having to pay a "so called" market rate?
Click to expand...
When I had a separate bottle (200 gal?) for my fireplace propane insert, I did not have to lock in any price since I used little.

The deal was that I either had to get a fill done once a year by the propane dealer at their current price (they owned the tank) or I had to pay a service charge - close to the cost of a fill :facepalm: ...

Most years I would ensure I used the insert enough to ensure I had at least one fill during the year. In reality, other than around the winter holidays, I rarely use the insert, so I was actually paying a preimum for the "charm" of a cozy fire :mad:

I had a 20KVA automatic backup generator installed in late March. At the same time I purchased a 500 gal (underground) tank and had the gas lines run to both the generator and the fireplace. That eliminated the 200 gal bottle and the annual cost for a fill (or usage charge).

Since I've only put around 15 hours on the genset (eight electric outages - from a few minutes to a few hours, along with the weekly 11-minute test), my propane usage has been very little - about 30 gal. overall in the last 6+ months.

As to the op's question, I got away from the issue on price by having my own tank purchased/installed. While one could compute a payback period for such a setup, I did it more from the standpoint of not having to pay one supplier up front for either a guaranteed future price or a refill/service charge on an annual basis.

I can check around for spot (bulk) prices and do it whenever I truly need a refill - on my schedule. My check of local spot prices on propane have been within a half-cent, regardless of dealer.

In my case, I'm more concerned of the charge related to how little I use rather than how much I may use. And if we have another October Halloween or SS Sandy and I'm out of electric for more than a few days, I'm really not going to worry about the price of propane :cool: ...
 
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Hmmm, so I am getting ripped off paying $6.78 a gallon plus a $70 a year rental fee? (100 gallon tank).

I only use about 60 gallons a year which is why they say they have to charge me a high rate.
 
Fermion said:
Hmmm, so I am getting ripped off paying $6.78 a gallon plus a $70 a year rental fee? (100 gallon tank).

I only use about 60 gallons a year which is why they say they have to charge me a high rate.
Click to expand...

Suggest you look at purchasing a tank. Seems like it would only take 2-3 years to pay itself off, even if you're only using 60 gallons a year.
 
Last edited:
Fermion said:
Hmmm, so I am getting ripped off paying $6.78 a gallon plus a $70 a year rental fee? (100 gallon tank).

I only use about 60 gallons a year which is why they say they have to charge me a high rate.
Click to expand...

Why don't you just re-frame it that you have a "substantial potential savings opportunity"?
 
My supplier has never mentioned anything about locking in a rate (I own the 250 gal. tank).
 
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