PORTLAND (AP) – Neighbors, co-workers and others with common ground are banding together to negotiate discounts for heating oil this winter at a time when energy prices are high and possibly going higher.

In Cape Elizabeth, a neighborhood association contacted several oil companies seeking savings for its 70 members for a fixed oil price for the upcoming heating season. It came away with quotes of 20 to 30 cents a gallon below what residents could get going it alone.

At those prices, somebody who burns 1,000 gallons over a winter could save up to $300, said Tom Getchell, who arranged the deal for the Stonegate neighborhood.

“That’s not chump change,” Getchell said.

New England is hit particularly hard by the high price of oil, which is used by a bigger proportion of homes for heat than any other region of the country. It ranges from 70 percent in Maine to 39 percent in Massachusetts.

To soften the blow, people who are affiliated in one way or another – by living in the same neighborhood, working at the same company, belonging to the same union or simply having similar interests – are forming buying groups to negotiate discounts.

Cooperative buying isn’t a new concept. It’s commonly used by businesses and government to get better prices from dealers who can deliver large volumes to a single group of customers.

But as the price of home heating oil has risen, so has the number of groups that are negotiating with oil companies in hopes of saving a few bucks this winter.

“There’s no mystery what’s driving it,” said Bob Moore, senior vice president with Dead River Co., a fuel company that works with some buying groups. “Prices are going up and futures markets are telling us they’ll be higher next winter, and people are doing what they can to get them down.”

Not all oil companies will work with buying cooperatives.

Mark Cyr, retail sales manager for C.N. Brown Co. of South Paris, said buying groups drive up prices for other customers and provide little economic sense for oil companies.

Companies still have to send individual statements to group members, collect from them and manage each account separately, he said. Besides, Cyr added, he has a tough time telling customers they can’t have the same price as somebody else.

“How can you quote one person one price because they’re a member of a group and quote the person across the street a dime more (per gallon) because they won’t join the group?” Cyr asked.

But advocates of buying cooperatives say they benefit consumers and oil companies alike.

In some cases, dealers can deliver oil on the same day to people in the same neighborhoods, saving on distribution costs. They can also reduce marketing costs by signing up dozens of customers in one fell swoop.

A Saco-based group called Donkey Card LLC acts as a buying group that offers negotiated discounts for heating oil, as well as other products ranging from real estate to financial services. The group aims to promote the Democratic Party, but anybody can join for a $35 annual fee.

The group, which has more than 525 members, has negotiated prices of $2.45 to $2.50 a gallon this winter, said Executive Director Barry Noble.

Many Maine homeowners are learning they’ll be paying up to $2.70 a gallon or more for a fixed or capped price for automatic delivery this winter. There’s been speculation that the cash price could hit $3 or more.

People have little recourse against high oil prices other than to create collectives, Noble said.

“Oil goes through everything and affects the entire economy,” he said. “So as the middle class gets more and more squeezed, people are going to band together.”

The Woodlands Homeowners Association in Falmouth worked out a deal for a fixed price of $2.39 a gallon, said board member Jeanne Grindlinger. About 75 percent of the neighborhood’s 98 homes participate, with a 1,500-gallon minimum purchase.

Grindlinger knows of other neighborhoods where people have called up their neighbors, formed groups of 12 to 20 homeowners and negotiated discounts. The deals, she said, benefit homeowners who get relief from high prices, and dealers who get blocks of new customers without having to recruit them one by one.

“They’ve locked in a large number of people for a large amount of oil,” she said.

Labor unions are getting in on the act, too.

The AFL-CIO has a program that negotiates with more than 150 oil companies in parts of New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island and other states in the Northeast.

The program is now in its second heating season, and nearly 5,000 union members have signed up.

Participating members can expect to save $200 to $300 a season, said Jon Ross, spokesman for Union Privilege, which administers the program. The idea behind a buying group builds upon the collective bargaining that unions use to negotiate contracts for salaries and benefits.

“It’s using that same concept in the consumer world, with us using 9 million members to get the best deals,” Ross said. “It’s group buying power.”

Consumers get relief and companies expand their customer base at the same time, said Getchell, of the Stonegate neighborhood in Cape Elizabeth.

“I think it’s a good deal on both sides,” he said.



On the Net:

Donkey Card: www.donkeycard.com

Union Plus: http://www.unionplus.org/heating-oil.cfm


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