Propane suppliers offer a wide variety of pricing agreements
and delivery options. The following are tips to help you decide which option is
best for you, and a list of questions to help you compare offers.
Propane prices are not regulated under Wisconsin law. In
general, the contract between consumer and the retail marketer sets the terms
of the agreement. It is in the consumer’s best interest to research options,
ask questions, and get everything in writing.
Budget plans, pre-pay plans, and fixed-price plans can offer
consumers savings when compared to buying at market price. Knowing your tank
size and your typical propane usage can help you get the best price and avoid
over- or under-buying. If you use up your contracted amount before the end of
the season, you may have to pay the market price for additional propane. If you
overbuy, your retail marketer may credit your account for the following year.
Make sure you read your contract and understand the terms and conditions that
apply to credits.
Budget plans typically spread your projected annual propane
cost over several months, or a year, evening out seasonal cost variations.
Payments may be adjusted in mid-winter. If you paid for more fuel than you
used, your remaining payments may be lower. If you used more than you paid for,
your remaining payments could be higher.
Pre-pay plans are offered during the summer and allow you to
pre-purchase the propane you will need during the heating season at a fixed
price. This allows you to know your expense ahead of time and avoid price
spikes. Your retail marketer will continue to fill your tank at your contracted
rate until you have used up your pre-purchased propane. You may be charged the
market rate for propane fills exceeding the pre-purchased amount.
Price-cap and fixed-price plans provide a guaranteed
per-gallon price for the propane used during the heating season. Under a
price-cap plan, your price will not exceed your established price-cap price per
gallon, but can go down if the current market price drops. Some of these plans
require an initial fee. Price cap options typically have a higher per-gallon price
than fixed price plans.
Market rate contracts indicate you will pay the seller’s
daily rate for fuel. Be sure to ask your retail marketer if you will pay the
market price on the day the propane is ordered or delivered. The market price
can change dramatically between the time you order and the time propane is
delivered. Since propane is sold as a commodity, retail marketers do not have
control of the market price.
Some retail marketers offer to deliver propane automatically
to refill your tank. Others allow you to monitor your usage and call when you
need a delivery. Make sure you know how much advance time your retail marketer
needs to schedule a delivery.
If you are on a contract that combines pre-pay and keep-fill
options, retail marketers will continue to refill your tank automatically even
if you have used up your pre-purchased propane. Be aware that the price per
gallon may increase after you have used up your pre-purchased propane.
Ask about fees and other charges
When you compare between retail marketers, do not ask only
about per-gallon cost. Retail marketers may charge a variety of add-on fees,
including trip fees, after-hours delivery charges, weekend fees, partial fills,
and inspection fees. Those fees can have a major impact on your total
Tanks: rent or own?
Renting or leasing a propane tank from the retail marketer
is convenient for most consumers. If you rent or lease a tank and decide to
change retail marketers, you may be charged a pick-up fee. Most propane retail marketers won't deliver propane to a tank owned by
another retail marketer.
Owning a tank allows a consumer to compare the prices
offered by different retail marketers, but it also comes with risk and
considerable maintenance costs and responsibilities. A consumer who owns a tank
has no guarantee of a contract for one-time or continuing service. Each new
retail marketer who delivers propane must do a safety/inspection check and will
charge a fee prior to filling the tank. The tank owner must ensure the tank
meets state safety and maintenance requirements. Installation and maintenance
must be performed by a licensed technician.
Read the contract
Make sure you understand the terms of the contract before
you sign. Get everything in writing. If you do not understand something in your
Get a signed and dated contract, and keep copies of receipts
for at least a year. No matter what kind of agreement you reach, a written
contract sets out the rights and responsibilities of both buyer and seller.
Receipts are handy to have if there is a dispute between you and your propane
We recommend that you ask these questions when comparing
propane retail marketers:
What service and payment options do you provide?
Do you offer a monthly budget plan?
How is the price I will pay for propane determined? (i.e.
annual usage, area of residence, quantity of order, or other criteria)
If I pay the market price for propane, will I be charged the
price on the day of the order or the day of the delivery?
What fees or other charges will be added on? Ask for a
How often will I receive delivery? What days are delivery
days? Are deliveries made on weekends?
How much will it cost to get delivery outside of my normal
Do I have to call when I need gas, or will you schedule my
delivery? If I call you for delivery, how much notice do you need?
If you are not able to fulfill the terms of my pre-paid
contract, what are my rights to a refund and how long will it take me to
receive a refund?
If I sign a pre-buy contract and use less than I thought I
would, what are your policies related to a refund or credit?