Customers Unite to Purchase Heating Oil Alternatives

Enterprising Maine residents organized a co-op for mass purchases of Bioheat, a heating oil alternative.  Community-based purchase power opens exciting doors for both renewable energy purchasing and fiscal savings.

The city I'm referring to, Eliot, Maine, has pooled the resources of 50 residents to make a group purchase of Bioheat, a blend of biofuels and heating oil. The proportion of biofuels keeps the price lower than straight petroleum-based heating oil, the futures of which have continued to rise. Eliot-online founder Jim Schliestett circulated a Request for Proposals (RFP) to local heating oil companies, which a New Hampshire-based heating oil company, Simply Green, won.

The situation provides wins all around; Eliot residents get access to more affordable heating oil, Simply Green gets a new customer base, and Bioheat gets market exposure.

"People are saving financially and they are doing their part to reduce their impact on the environment," said Simply Green CEO Andrew Kellar. "It allows us to deliver in the same neighborhood ... everybody wins."

The heating oil price increases in the Northeast are a problem for residents because there are not many alternatives, except to move out of cold climates. Unlike cutting back on driving or taking public transportation to save on gas costs, saving on heating oil just means being cold; there are few substitutes, and even fewer in remote rural areas. "Oil is shooting up everyday," Bob Dawber, Eliot resident and co-op organizer, explained. "A lot of people in Eliot are on a fixed income ... fuel assistance is helpful, but it only goes so far." Bioheat does offer a promise of price relief, but needs to be adopted by large-scale distributors.

The Eliot power purchase agreement is a good step, however. Importantly, the type of purchasing power exercised by Eliot residents can also be applied to solar buys through “power purchase agreements,” or green energy buys through “community choice aggregation.” These financial tools allow customers to use their market power to demand a specific type or price for energy, sometimes escaping the limited options offered by a local utility. The success Eliot is finding using community purchase power to opt out of traditional heating oil delivery can be applied even more easily to urban areas where there is a higher density of customers.

Eliot’s success was facilitated by the use of a website, a networking site like a small-scale version of Craigslist. Communication is key, according to Schliestett. “ [The website was] extraordinarily helpful. You've got the ability to spread the word."

Photo by Fosters Daily Democrat