Switching propane companies

Created on 03/04/2013

min reading

Given that the price of propane per gallon can vary by a dollar for the same amount of propane in the same region depending on propane companies, some propane users decide to switch propane companies to get a better deal. This decision may also be due to a need for services their current company charges them too much for or does not offer (appliances, maintenance, etc.).

The best way of going about switching propane companies is to list what your current arrangement is and establish what is lacking. You are likely to improve on your current supply agreement if you encourage other propane companies offer you a better deal. This is only possible if you explain what you have, and what is missing, in terms of propane prices, propane tanks, maintenance/repair services, customer care, equipment, etc.

Comparing your current agreement to what other propane companies offer

Once you have established what improvements you want from another propane company, you should request quotes from propane companies in your area. It is only by comparing such quotes that you will be sure to find the best possible deal. You choice will rest on either whether the new services you require (e.g., maintenance) seem adequate or whether prices are lower with other propane companies for items you already have under your current propane supply agreement.

Item	Current contract	When requesting quotes
Propane price	- What does your current company charge for propane?	- What do other companies offer in terms of propane prices?
Propane tanks	- Is your tank rented or purchased? - If rented, do you pay a rental fee and if so, how much is it? - If rented, will your current company sell your propane tank to your new company?	- What rental fees do other companies charge, if applicable? - Do you need a larger or smaller propane tank? - If you have a rented tank, can other companies purchase your tank from your current propane company?
Delivery options	- Are you currently on automatic delivery or do you order propane when you need it?	- What delivery options do other companies offer?
Payment options	- Are you currently on a specific payment plan, such as fixed pricing or budget plan and what does it cost you?	- What do other companies offer in terms of payment options and can they match or beat what your current company offers?
Services	- Are you currently benefitting from any services, such as maintenance? What do they cost?	- What services do other propane companies offer? - How much do other companies charge for services such as maintenance?
Fees and charges	- What fees and charges apply to your situation and how much do they amount to (e.g., HAZMAT)?	- What fees and charges do other companies apply, which might be relevant to you and how much would they amount to?

Fees and charges that might apply as you switch propane companies

However, be sure you have the company list all fees and charges since they differ from one propane company to another. For example, some propane companies include the cost of fuel hikes in their propane price while others add a fuel transportation surcharge to propane bills. The table below lists common fees and charges and should enable you to find what you currently pay and what you might have to pay with other propane companies.

Item	Description	Comment/Price
HAZMAT	Offsets safety training and compliance costs.	Charged for each propane delivery. Most dealers charge a HAZMAT fee or a variant thereof.
Fuel surcharge	Offsets transportation costs linked to fuel price hikes.	Charged for each propane delivery. Most dealers charge this.
Delivery fee	Charged to deliver propane.	Charged for each propane delivery, if applicable. Most dealers do not charge delivery fees but they can reach $100.
Minimum delivery fee	Offsets costs associated to delivering limited amounts of propane or less propane than the contract forecasts.	If you are not sure of your propane usage, check what the minimum delivery fee for your propane agreement would be (it can reach $150/delivery).
Off-route delivery fee	Charged to customers who request a delivery beyond the dealer’s planned delivery route.	Ask what the local fee would be for your home. Can be as high as $150.
Special/Emergency delivery fee	Charged to customers who request a delivery after hours.	Several hundred dollars so enquire to know what you might have to pay if you ran out of propane.
Pump-Out fee	Charged to customers who need the tank drained to have it moved or removed.	Tanks are not allowed to be moved if the level is above 5% but some dealers buy excess propane from customers so check whether this is true of each company and at what rate.
Closeout fee	Offsets administrative costs of closing a customer’s account.	N/A.
Early termination fee	Charged when a customer stops their contract before the end of the agreed period.	Check what the dealer’s early termination conditions are.
Leak Test Fee	Charged when a propane tank is installed or when propane supply has been interrupted (e.g., if a tank is empty).	This is a legal obligation: $50-100.
Installation fee	Charged to install a propane tank.	Usually included if tank is leased.
Tank rent fee	Offsets dealer maintenance costs for a company-owned tank.	Usually depends on tank size: $25-225.
Reconnect fee	Charged when customer propane supply has been shut down because of a payment issue once the issue has been solved.	None.
Late fee	Offsets the costs of processing a late payment.	Likely to be a percentage of your last propane bill.
Returned check fee	Offsets the administrative costs and bank charges for processing a check linked to an account with insufficient funds.	Likely to be a set fee of around $30.

Termination costs for switching propane companies

As you switch propane companies, you should be aware of the termination costs associated your current contract so that cancelling it will not cost you more than the advantages associated to the propane company you end up choosing.

Therefore, it is advisable to work out what the combination of the pump-out fee, tank pick-up fee, closeout fee and early termination fee will cost (depending on what your current company charges):

The pump out fee applies to rented tanks that need to be removed but have more than 5% propane in them. It is recommended that you check with your company whether they will purchase excess propane from you, and at what price.
The tank pick-up fee applies to rented tanks that your current company will remove if you terminate your contract with them. Sometimes, it is possible to have a new company purchase your rented tank from your current company.
The closeout fee covers administrative costs associated to a propane supply agreement termination.

The early termination fee is a flat fee that applies when customers cancel their contract earlier than expected or faster than expected. Check your current propane supply agreement to see how much this might come to.