Island, as many as 200 fuel oil companies of different types and sizes
compete to provide oil to your home. Consumers may choose a company
that will deliver oil on a regular, uninterrupted basis and maintain
and service the heating unit; or, consumers may decide to purchase oil
on an “as needed” basis and contract for service separately.
When choosing a fuel oil company, consumers should check, among other
things, a company’s oil prices compared to the industry average, what
is included in the service agreement, any special offers or discounts
available, and the customer experience record of the company with the
Better Business Bureau to verify you are dealing with a reputable firm.
Consumers should also shop around and get more than one quote before
signing a service contract agreement.
Primary Types of Companies
Full Service Fuel Oil Companies:
service companies, in most cases not only sell fuel oil but also offer
a wide range of services, including automatic deliveries, 24 hour
emergency service, 30 day credit, “capped” or “fixed” price programs,
budget plans, equipment maintenance, service agreements and
installation of new equipment, such as boilers, furnaces, burners, hot
water heaters, etc.
Discount Fuel Oil Companies:
Unlike full service companies, most discounters do not maintain the
heating unit or offer any other services. Their exclusive function is
to deliver oil, in many cases, on a “cash on delivery” basis. By
unbundling traditional services, discounters are able to offer
competitive oil prices.
Price of Oil
To make sure a company’s price is in line with the market, you may
compare the amount you pay to an industry index. If you live on Long
Island, you may call the Oil Heat Institute at (516) 360-0200 or e-mail
them at email@example.com
for this and other related information. If you live in other areas of
New York State, you may contact the Oil Heat Institute of New York by
e-mailing them at firstname.lastname@example.org
OHI is an industry group that has access to daily average prices, based
on information published in The Journal of Commerce, in addition to
weekly or periodic surveys from the State Energy Office and Consumer
Due to the heating oil shortages in recent years President Clinton
directed the Department of Energy to create the Northeast Heating Oil
Reserve in July of 2000. This action should prevent fuel oil shortages
this winter and in turn prevent a rise in New Yorkers’ home heating
A service agreement is a plan offered by a fuel oil company to provide
both oil on an automatic basis and service to heating equipment for a
pre-set period of time. Unless otherwise specified, the consumer is
required to purchase oil from the company exclusively in order to
maintain the agreement. Service agreements usually provide for
emergency service, as well as maintenance and replacement of all
working parts specified in the agreement. It generally includes an
annual tune-up, cleaning, and efficiency check of the heating unit.
In order to consider what you will need in a service agreement, it is
important to understand your heating system. There are two basic types
of central home heating systems: forced air heating and hot
Forced Air Heating
If you have a forced air system it utilizes ducts and heating vents in
either the floor or ceiling of each room and is often used in
conjunction with an air conditioning system. If you have this type of
system, you must also have a separate heater for your domestic hot
water needs. Approximately 15% of the homes on Long Island have forced
Hot Water/Hydronic Heating
If you have a hydronic or hot water system, the predominant kind used
by Long Islanders, the boiler (either made of steel or cast iron)
produces hot water, which is then circulated around the house via
baseboard heating or upright radiators. While virtually all boilers
incorporate a tankless coil for domestic water usage, many
manufacturers now promote indirect heaters as a more efficient means of
producing hot water.
Both of these systems use a burner, which is the gun through which oil
is atomized to produce a flame to heat the water in the boiler or to
heat the air circulated in a warm air furnace.
Thermostats or zones are also present in both systems. Zones are where
a house has been split into areas for heating purposes, such as living
areas in zone 1 and sleeping areas in zone 2. Each zone requires its
own thermostat. Additional zones allow greater flexibility in heating
choice by keeping one area higher than another, thus lowering the
average temperature of the home and reducing consumption. A set-back
thermostat, a device that allows zones to be automatically turned off
and on is an inexpensive conservation method.
Components of a Service Agreement
The following is an explanation of the various features of a service agreement:
may include an annual cleaning, instrument tune-up and adjustments to
maintain the maximum operating efficiency of the unit. In most service
agreements vacuuming is extra.
Boiler or Furnace Maintenance:
This may include normal maintenance, cleaning, and adjustment of
structural components of the basic heating unit. Replacement of a
defective boiler is almost always covered as a separate item with extra
charges or a deductible.
Burner and Controls:
This may include adjustment and/or replacement of nozzles, end cones, or other burner parts and associated electronic controls.
should include the first, primary, or main zone of the heating system
(i.e. living areas) and generally covers zone valves or circulators.
Additional zones, for sleeping areas, finished basements, etc., will
usually entail some additional costs.
Service Agreement Components Available at Additional Cost
Separate Oil Tank:
oil tank is the receptacle which holds the oil, usually located in the
basement, outside above ground or below the ground. Most service
agreements, which include replacement of a tank do not cover in-ground
tanks; however, a deductible or partial payment clause may be
incorporated into the agreement. Policies to cover replacement and
remediation in the event of a leak in a buried tank are also offered by
Hot Water Heater:
A hot water
heater is a separate heater for domestic use, such as showers, washing,
laundry, etc. It can be used in conjunction with a boiler but it is
mandatory with a furnace. In most cases, coverage is not included in
the basic service agreement. If coverage is available, it will most
likely include maintenance of the burner and component parts, but will
not include the replacement of the tank itself.
Service Agreement Checklist
Use the following list to check whether a service plan covers the repair and/or replacement of the following parts:
|Oil Burner Motor||Oil Tank|
|Fuel Pump||Hot Water Heater|
|Burner Fan||Circulator Bearing Assembly|
|End Cone||Expansion Tank*|
|Air Tubes||Exposed Oil Lines|
|Electrodes||Float Type Oil Gauge|
|Nozzle||Hand Feed Valve|
|Ignition Transformer||Gauge Glass|
|Smoke Pipe||Flow Valve*|
|Thermostat**||Blower Belt and Pulley|
*These components do not apply to furnace warm air systems.
**Most service agreements cover one zone or thermostat with additional zones at an extra charge.
type of coverage may be available on a select basis, based on the age
and type of the unit in place when the agreement commences. If coverage
is available, it will most likely apply to an identical size and type
of unit. Upgrades may be available at a higher price. Given the high
replacement cost of these major items, this type of additional
coverage, basically a form of loss coverage, may be advisable for many
With the increased use of high
speed, retention head burners in most heating systems, a vacuum of the
unit is not normally required on an annual basis; however, it should be
performed at least every 2 to 3 years. It is further recommended that
chimneys be cleaned by a professional service from time to time.
Items Which May Not Be Covered in a Service Agreement
Service agreements generally do not include parts or labor as a result
of conditions such as water damage, fire, flood, freeze-ups, hurricane,
power interruptions, fire or water in basement, among other possible
conditions. Additionally, the agreement may not cover parts for
equipment considered obsolete by the company. The service agreement,
unless specified, will not cover plumbing or electrical work.
Deductibles may apply in the replacement of the burner, tankless, coil,
and oil tanks.
Canceling the Service Agreement
Most service agreements are cancelable upon written notice to the
company by certified/registered mail. If you choose to cancel the
agreement during the time period it is in effect, the company will
expect payment for any work previously performed on a time and material
basis. This cost should not exceed the total cost of the agreement.
Free Service Agreements:
companies offer free service agreements in certain circumstances. Among
the most common reasons include the installation of new equipment by
the company, since many components are covered by manufacturers’
warranties or as an inducement to a new customer for a fixed period of
time. Many companies will require that a certain amount of oil be
purchased on a yearly basis.
companies offer a variety of discounts on the price of oil. Discounts
are typically offered to the following groups: large volume purchasers,
senior citizens, those on fixed incomes or persons living in
pre-assigned community groups, such as unions or civic groups and
customers who pay their bills within a specified period of time, such
as 10 days of delivery or receipt of a bill.
companies allow customers to pay 10 or 12 equal monthly payments based
upon their usage in the prior year. Some companies pay interest on any
positive credit balance that a customer builds up during the course of
Capped or Fixed Prices:
offer these special programs to customers concerned about price
fluctuations which occur during a heating season. Essentially, with a
“fixed” price program a predetermined price is established, somewhat
lower than would otherwise be anticipated, before the heating season.
Thus this “fixed” price remains unchanged throughout the season,
regardless of what happens to the price on the open market. Similarly,
a “capped” program sets a ceiling on the amount per gallon charged
during the heating season.
On Long Island, fuel-oil companies are required to be licensed by the
Office of Consumer Affairs, in addition to a number of local
municipalities. It is important to note that all work performed,
whether regular maintenance or new installations, should be performed
by a licensed company. Failure to use a licensed company could be
grounds to void a homeowner insurance policy.
Helpful Ways to Lower Your Home Heating Bill
Assistance for Senior Citizens and Low and Fixed Income New Yorkers
your furnace or boiler cleaned and tuned-up by a professional on an
annual basis to ensure your system is running efficiently.
- Insulate your home and especially your hot water pipes properly.
a programmable thermostat. You can save money when you turn down your
thermostat at night and at times when no one is in the house.
- Use sunlight as a heat source whenever possible.
- Try not use kitchen, bath, and other ventilating fans on a regular basis in the winter.
- Caulk and weather strip windows and doors to seal out cold air.
- Either replace or try a smaller fuel nozzle in the furnace.
- Try not to block your radiators with any furniture.
The Home Energy Assistance Program (HEAP) is a program that gives
monetary assistance to senior citizens and low or fixed income New
Yorkers in order to help them pay their home heating bills. Those
eligible for this program include those 60 years of age and older,
those who are the head of the household and receiving Social Security
Disability, and those receiving Supplemental Security Income (SSI-Code
A) and living alone or with a spouse only. For more information
consumers can call the HEAP Public Information Line at 212-227-2810.
For HEAP applications and assistance through the Department of the
Aging consumers may call 212-442-1000.
Low income New Yorkers may also call either the New York State Office
for the Aging at 1-800-342-9871 or the Office of Temporary and
Disability Assistance at 1-800-342-3009 for assistance with home
heating oil problems or concerns.