Home Heating Oil Dealers Oppose Surcharge, Which They Call A ‘Tax’
by Christine Stuart | Mar 19, 2013 1:19pm
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Posted to: Energy, Environment
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Chris Herb, vice president of the Connecticut Energy Marketers Association
The Commerce Committee debated a bill Tuesday that would, for the first time, add a surcharge to home heating oil and propane used by more than 50 percent of Connecticut households.
The bill, which was drafted last week, would levy a 1.5 cent per gallon surcharge starting in July. The following year it would increase 2.5 cents per gallon and 3.5 cents per gallon in 2015.
Environmental and conservation groups said that’s only an additional $15 more a year for a customer who uses 1,000 gallons. The fund created by the levy is estimated to raise about $160 million and will be used for energy efficiency and conservation measures earmarked specifically for home heating oil and propane customers.
The Energy Efficiency Fund is currently funded by a surcharge on electric and natural gas customers. State money for efficiency programs currently available to heating oil customers expire at the end of this year, which is why the creation of a new fund is necessary, Doug Cahill, vice president of marketing for Competitive Resources, told the committee. The Energy Efficiency Fund offers rebates on furnaces and insulation and low-interest financing.
But the trade association that represents heating oil dealers is skeptical of the creation of a fund.
Chris Herb, vice president of the Connecticut Energy Marketers Association, said he believes the money will go into a “black hole” and won’t be used for its intended purpose like so many other special funds created by the legislature.
“Whenever a fund is created it’s always raided for other purposes,” Herb said Tuesday.
Herb and the 20 heating oil dealers he was able to gather on short notice told the Commerce Committee that it has an obligation “not to tax necessities,” such as home heating oil.
“People need to heat their homes to live,” he said.
Herb, who represents 600 heating oil dealers, said the tax would impact low-income families who are currently struggling to pay for heating oil now without the tax.
As for conservation measures, Herb said over the years without any government intervention his members have been able to lower the average annual household usage from 1,200 gallons to 800 gallons.
A “tax” on customers who already have lowered their oil consumption would be punitive, Herb added.
But Dan Bosley of the New England Clean Energy Council said he thinks it will inspire those customers who haven’t taken part in conservation or weatherization efforts or some of the rebate programs to upgrade equipment to get motivated.
He said heating oil dealers in Massachusetts support a similar measure because it helps them keep their customers from converting to natural gas.
“Our heating oil dealers are supporting this incentive to keep oil customers who may be considering natural gas,” Bosley told the committee. “I think savings you can have from participating in those programs are an incentive.”
Rep. Gail Lavielle, R-Wilton, seemed to disagree.
“I’m a bit concerned about how we can viably do that now when they already can’t pay the price they’re being charged,” she said.
The language in the bill closely mirrors Gov. Dannel P. Malloy’s comprehensive energy strategy for the state.
“Because fuel oil and associated delivery services are not regulated by the state, there is no existing public policy to ensure that oil and propane heat customers are included in efficiency programs. Policymakers need to consider establishing a dedicated fund supported by fuel oil and propane customers to provide robust efficiency programs to fuel oil customers,” the strategy suggests. “The most logical way to achieve this result might be for the fuel oil and propane dealers to establish a voluntary efficiency fund that they would contribute to at levels commensurate with the efficiency funding provided by natural gas and electric-heated homes. In the alternative and to ensure equity across heating sources, the General Assembly might choose to levy a surcharge on fuel oil and propane to support efficiency measures for customers heating with these fuels.”
Tags: energy efficiency, conservation, Energy Council, Chris Herb, heating oil, propane, tax, dh
(12) Comments
posted by: Noteworthy | March 19, 2013 2:29pm
It just never ends. Every year, some pinhead comes up with yet another way to raid the family budgets. I don’t give a damn if it’s $15 now, or $30 later. It will not be used for its intended purposes - it never is. More importantly, it just takes money from people. Put a suggested contribution on their oil and propane bill - and see how many people voluntarily contribute an equal amount when they pay their bill. You are welcome to the proceeds. If nobody does so voluntarily, you’ll know real fast how much people, already stressed over jobs and money and increased taxes, sales taxes and increased fees and other costs, think that $15 is more important to them than to the state. This nickle and dime approach to ripping off family budgets is disgusting.
posted by: GuilfordResident | March 19, 2013 2:57pm
I did my CT state taxes last month. My guess is my local property tax, CT income tax, CT sales tax, CT gas tax, CT beer tax, and various CT utility taxes added up to about 13% of our AGI. 13% ... and for what?
posted by: DirtyJobsGUy | March 19, 2013 2:59pm
I work in the real energy business and these programs are a classic crony ploy. Politically connected guys get these grants and don’t have to do anything useful. Remember we did all the weatherstripping and insulating back in the 1970’s so there is little that can be done for cheap today. This also subsidies pointless residential solar systems that the leftie’s adore. Crooks!
posted by: Salmo | March 19, 2013 5:06pm
Just another reason from a long list of reasons to get out of this State!
posted by: davebc15 | March 19, 2013 8:03pm
I live in a small town. Do you think I’ll ever be able to heat with Natural Gas? Nope - they’ll never run the lines to my town? “Well,” you might ask, “What about propane?” I have propane hot water and cooking. I priced it recently. It ranged from 3.099 to 3.999 per gallon. Add to that the $49.95-99.95 per year to rent the tank, and you have the surcharge on heating oil. Plus all the money that I DON’T have to convert! You can’t buy propane from a company that doesn’t own your tank, and, even if you own your own tank (another $1000-10000), some propane companies won’t even deliver to you, despite the fact that you can negotiate with them. Propane and Natural Gas may be cleaner, but you are stuck with one company or another. No thanks, I’d rather freeze in the winter or move to another state that doesn’t try to nickel & dime you to death with “new taxes.”
posted by: DrHunterSThompson | March 19, 2013 8:05pm
anyone who supports this should be eliminated in the next election.
HST
posted by: meridenite | March 20, 2013 10:48am
Just another tax that will end up in the general fund,oh by the way when is someone going to bring up the increase in the gas tax that will increase July 1, 2013???
posted by: cliftonave | March 20, 2013 5:49pm
It seems that whoever the lawmaker is who drafted this TAX on heating oil is living on another planet. This bill is obsene, and unfair to the many people who live in this TAX AND SPEND STATE ,who are barely getting by . These so called councils are nothing but good ole’ boys that are looking to pick the pockets of the average taxpayer You and all of your phoney stats.GET A REAL JOB!!!!
posted by: Reasonable | March 20, 2013 7:37pm
What happened to Go. Malloys’s promise of NO NEW TAXES? Isn’t he and the Democratic General Assembly on the same page?
posted by: Christopher55 | March 20, 2013 9:37pm
Does anyone really think this will stop at 3.5% in 2015. How else can the ST of CT afford to pay all those 200K UCONN pensions?
posted by: ASTANVET | March 21, 2013 2:33pm
No matter how much money we give the State they will ALWAYS spend more… enough already!
posted by: SaveCT | March 21, 2013 2:48pm
Do any of you knuckle head politicians realize how many dollars it takes to heat a home with fuel oil? The elderly, young families, and the poor struggle every winter to heat their homes. The price per gallon, $5 from some dealers, keeps going up and this winter has been particularly harsh. Instead of a tax you should be thinking of a tax credit to help these folks heat their homes.