Posted on February 28, 2023
HARTFORD- State Rep. Tom Delnicki (R-14) today testified on a proposal to address concerns among family-owned heating oil companies and to provide viable solutions that will greatly aid these companies, such as ensuring that fuel providers are fully reimbursed based on the price of the fuel on the date of delivery.
The legislation, HB 6703, AN ACT CONCERNING THE LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM would make changes in program payment practices and benefits to ensure an adequate pool of fuel vendors and assistance meets the needs of low-income households.
“South Windsor and Manchester have several family-owned heating oil companies that sell and provide service to the greater Hartford area. Unfortunately, at this current moment in time, these companies are being heavily affected by financial burdens because of the current system, and due to these burdens, many have considered no longer participating in the LIHEAP program, with one company already backing out of the initiative. If the current status quo remains unchanged, I expect that many of these companies will follow suit,” said Rep. Delnicki.
Delnicki added that many family-owned oil companies have expressed that in order to cover the high expenses, they have also had to endure the cost of using a line of credit, which further adds to the already tremendous amount of financial stress.
“This bill addresses these crucial problems and provides viable solutions that will greatly aid these family-run companies, such as ensuring that fuel providers are fully reimbursed based on the price of the fuel on the date of delivery.”
The Connecticut Energy Marketers Association (CEMA) represents 600 energy marketers who sell heating oil/Bioheat® fuel, propane and HVACR services and their associated business in Connecticut. CEMA’s members employ over 13,000 people in our state also testified in support of the proposal.
According to CEMA, “With fuel prices nearly doubling year over year, vendor’s credit lines may run out of credit in a week or so (if not days) compared to previous years. If this happens it would cut vendors off from being able to pick up fuel, impacting CEAP customers and non-CEAP customers who would not be able to obtain fuel until the credit line is paid down. Vendors are typically charged for the fuel at the time they pick it up at the rack and larger vendors that are more creditworthy may get five to ten-day payment terms. The gap between a COD pick up at the rack and thirty days that is in the plan at these price levels puts a vendor at risk from being able to pay for fuel.”