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Why Summer Fill for LP?

Feb 02, 2020

Doug Yule, Southern Propane Manager

We urge all of our customers to order a summer fill. That way, they won’t need to worry about whether they have propane in their tank when they start their furnaces in the fall—and they won’t have to compete for the attention of their driver who is also delivering to farmers drying their corn. After summer fill, we encourage our customers to consider one of these three options for paying for propane needed to heat their homes, farm shops and businesses this winter: budget pay, full pre-pay or deposit contracts.

Budget Payment is for people who don’t want to pay a big $400 bill all at once during the winter. Budget pay spreads out the customer’s payments over the entire heating season. The first payment is made in July and the last payment is made in May, with June being a reconciliation month. However, Countryside Cooperative will still take new budget pay customers for a couple months after the Budget Payment program starts.

Full Pre-pay Contract is for anyone who wants to lock in their price on the number of gallons they know they will use over the winter. Aside from summer fill, this option will give a customer the best price. It saves 10 cents/Gal. over the next option, the Deposit Contract, and is usually much better than cash-on-delivery. Last year, Full Pre-Pay customers paid 40 cents less than the cash market. Full Pre-Pay customers can decide whether they want to watch their supply tanks and order when they get low, or let the co-op auto-fill their tanks. As it sounds, Full Pre-Pay customers pay the full amount on the gallons they expect to use at the time the contract is signed. All contracts must be completed by predetermined date, and the number of gallons of propane under contract must be taken between October 1 and April 30. If, on April 30, a full Pre-Pay customer still has not taken all the gallons they have under contract, the remaining money will be rolled back into their accounts.

 Deposit Contract is for people who want to lock in a price but do not have the money to sign a Full Pre-Pay Contract and do not want Budget Payment. A Deposit customer pays $0.20/Gal. down on a specified number of gallons at an agreed upon price, at the time the contract is signed. When the gas is delivered, they pay the balance per gallon. The price the Deposit customer ends up paying is more than the Full Pre-Pay price, but will usually be less than the cash price. Last year, the Deposit customer paid $0.32/Gal. less for their propane than the cash market. As with Full Pre-Pay Contracts, the Deposit Contract runs for a predetermined timeframe. Unlike the Full Pre-Pay customers, however, Deposit customers lose whatever they have paid toward each gallon of propane under contract but not pulled by April 30. So they need to be conservative about their estimation of what they will use.

It would seem that the people most interested in the above contracts would be homeowners, farmers operating livestock facilities, or commercial businesses. However, in recent years, many farmers have contracted propane as a way of lowering the expense of grain drying. I regularly call our crop drying customers and give them the option to contract. Lately, all of them have been pulling the trigger early, contracting what they think they’ll need for the fall. Anyone who bought propane for heating under the Budget Program or signed a Full-Pay or Deposit Contract last year will be sent another new contract in July and encouraged to sign. In this mailing, they will be told how many gallons they used and encouraged to allow for any abnormalities in temperature last winter or changes in use when they contract this year. If you have never purchased propane from Countryside Cooperative under these three programs, please call our energy department at 715-672-8947 or toll-free 800-236-7585. We will send a contract out and help you estimate your use.

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