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Heating Oil Price Drop Slows Natural Gas Conversions

Harriet Jones
/
WNPR
Andy Kane fills the tank at a Waterford home
Theresa Carter said her family is paying about half of what they did last year to heat their home.

Plunging oil prices are proving to be a boon for about six million homeowners in the northeast who heat their homes with oil. And they may also lessen the appetite for conversion to other fuels -- a movement that had been gaining ground. 

Theresa Carter enjoys a joke with delivery driver Andy Kane as he fills the oil tank at her home in Waterford, Connecticut, on a chilly January morning. The two go way back; Kane’s wife has coached Carter’s kids in softball. That kind of community connection is common with Connecticut’s 500 or so family-owned oil companies, many of whom count their customers’ loyalty in decades.

And this winter, Carter doesn’t have to wince when she sees the oil truck coming. She says her family’s paying about half of what they did last year to heat their home, even with a new addition. That break in the price means she and her husband have quit fighting over the thermostat. “I always nudge it up when he nudges it down,” she laughs. “But this year, being that we can heat it a little bit more, I nudge it up a little bit more, and he lets me.” 

Credit Harriet Jones / WNPR
/
WNPR
Marc Mazela is the third generation to run his family's heating oil business.
"Governor Malloy couldn't have been more wrong. It'd be great if he actually could come out and apologize."
Marc Mazella

“Our customers have saved a ton of money without having to sacrifice anything,” said Marc Mazella. He runs Benvenuti Oil, the company that delivers to Theresa Carter’s home. Benvenuti was founded by Mazella’s grandparents out of their own house in 1950. Mazella says despite the comparatively mild winter in the Northeast his customers are actually using more oil than they would usually do in similar weather - just because they can afford to feel comfortable.

On average, his customers will use about 875 gallons this winter, and they’ll still save more than a thousand dollars over last year.  “I know we’ve been reading a lot about and hearing a lot about energy prices falling and its taking down the Dow, and huge loss for this and that,” said Mazella. “But the bottom line is it’s putting more money in people’s pockets.”

Mazella is also pleased that his customers may feel less inclined to switch fuel sources. In 2012, citing high oil prices, Governor Dannel Malloy encouraged billions of dollars in investment to build out natural gas lines in the state. He aimed to bring the fuel to 280,000 new customers. But the gas utility companies confirm they’re now failing to meet their targets for converting households away from cheaper heating oil. "He couldn't have been more wrong," said Mazella. "It'd be great if he actually could come out and apologize for his error."

But Professor Eric Chen says that’s a downside of the drop in oil prices. “I think the conversion is actually a decent idea. As a society we should be exploring those kinds of alternatives to see which one comes out best.”

And Chen, who teaches business at the University of St Joseph in Hartford, says while low oil prices are a temporary boon to the Northeast, so far there’s little evidence that consumers are rushing out to spend that windfall. “Yes, the consumers are finding a little extra in their pocket, but no, the consumers aren’t really doing anything so much about it,” he said. “They still have long memories, and they’re still a little bit conservative and they have a wait and see approach to this.” 

Credit Harriet Jones / WNPR
/
WNPR
Pamella Nazario has welcomed the drop in heating oil prices.

But certainly some in the state can't afford to wait and see. Pamella Nazario is a single parent to two girls - she drives a school bus for a living, and heating her rented house in West Hartford with oil has been a serious hardship in the past. “Last year only for 100 gallons I think it was $475, which only last me two, three weeks, the most,” she said.

This year, she’s happy that a big chunk of that money can go elsewhere. “I spent a lot of money on clothes for the girls, and actually this year that was a big help because I have extra money to spend on them for things for school and all that.”

The dramatic shift in energy prices may have consumers breathing a little easier, but it only adds to the conundrum for those who must seek smart, long-term policy.

Harriet Jones is Managing Editor for Connecticut Public Radio, overseeing the coverage of daily stories from our busy newsroom.

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