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May 01. 2014 8:29PM

Pre-buy fuel oil protection pushed

CONCORD — The Senate on Thursday preliminarily approved a bill limiting when heating oil companies can advertise pre-paid contracts and making failure to deliver heating fuel a violation under the state Consumer Protection Act.

Under House Bill 1282, heating oil dealers could use heating oil inventories to meet the current requirement that dealers have 75 percent of the pre-buy fuel covered through futures’ contracts, surety bond or letter of credit.

The bill also requires dealers to register with the Secretary of State’s Office and file an annual report demonstrating how the company will satisfy its obligations to consumers.

The bill will go to the Senate Finance Committee for review before a final vote.

The bill gained momentum this winter when customers of Fred Fuller Oil and Propane Co. Inc. failed to meet scheduled deliveries of heating oil when or were promised fuel that was not delivered when tanks were low.

The bill limits when dealers can advertise and solicit customers for pre-buy contracts.

At a public hearing last month, several dealers testified that dealers in financial trouble often solicit contracts in January or February for the next heating season and then use the money to buy fuel for the current heating season.

Under the bill, companies offering pre-buy contracts would be able to advertise and solicit customers only from May 1 to Oct. 31. Senate Majority Leader Jeb Bradley, R-Wolfeboro, noted that the Senate included a provision to allow residential customers to approach dealers seeking pre-buy contacts at any time, particularly when a custome receives a federal tax refund.

The bill allows commercial customers to purchase pre-buy, fixed price contracts at any time.

Under the bill, failure to deliver heating oil under a prepaid contract would be a violation of the Consumer Protection Act that would be in most instances a class B misdemeanor but could be increased to a class A misdemeanor for repeated or gross violations.

Senior Assistant Attorney General James Boffetti, who heads the consumer protection division, told senators at the public hearing that his agency has qualified support for the bill.

He said the real problem is how to secure pre-buy contracts. Despite the changes in the bill, “we’re still left with insufficient security with customers’ money,” he said.

And he fears requiring dealers to register with the Secretary of State will give consumers a false sense of security.

Senate Minority Leader Sylvia Larsen, D-Concord, praised the compromise, adding “home heating pre-paid contracts have been before this body many, many times, but often ran into road blocks.

“Consumers will have protection under this bill,” she said.

The bill has already passed the House.

The Senate has until May 15 to take a final vote on the bill.

grayno@unionleader.com


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