Examining Your Energy Costs The Best Ways to Pay for Fuel

 As the winter months fade into spring, it’s easy to try and forget about heating and all the costs it incurs. For  managers, board members and others with an eye on a co-op or condo building’s budgetary bottom line, now may be the perfect time to start planning ahead and  taking advantage of the best options available from the city’s fuel providers. Because most companies provide some sort of flexible billing  or payment option, it never hurts to shop around and see what can be done to  tailor a payment program to a building’s very specific needs.  

 Finding Savings

 There are a number of different options available when it comes to finding the  right billing plan. “Co-ops and condos can opt for floating pricing or some other type of pricing  contract that may allow for a fixed price,” says Carla L. Romita, senior vice president of Castle Oil Corporation, based in  Harrison, New York. “Fixed price contracts come with volume requirements within a specific time  frame.”  

 As Fred Tamburino, vice president/commercial sales at Brooklyn-based Approved  Oil Corp., explains, “You say, ‘If I wanted to buy 100,000 gallons of fuel, what would be my locked in or fixed  rate?’” In order to get that rate, the building must purchase those 100,000 gallons of  fuel within a year or other predetermined period of time.  

 There is an additional premium built into the fixed rate as well, says Mark  Loughlin, vice president of the family-owned Ferrantino Fuel, based in  Brooklyn, New York. “When fixing a price, there is inherent risk built into the futures market and so  often, there is a premium for such a contract. Right now, there is political  instability and a security premium of about ten cents per gallon built into the  market.”  

 “Boards must remember that fixed pricing involves a binding contract between the  co-op or condo and the supplier,” says Romita. “There are risks inherent for each side and these contracts must only be entered  into when the board fully understands and accepts these risks.”  

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