In A Volatile Fuel Market, Vt. Towns Seek Tighter Cost Controls

07/19/12 7:30AM By Kirk Carapezza
 MP3   Download MP3 

It's an intriguing conundrum that everybody - from the average homeowner to the large manufacturer - faces: how to control fuel costs.

Some Vermont communities expect the cost of fuel to spike, so they're trying to control their energy bills by locking in propane and diesel prices.

Ludlow Town Manager Frank Heald says he's never added up his town's total energy costs. But in recent years prices have been significantly higher, primarily because of the world oil market.

"It ranges in the $250,000 to $300,000 range when you add it all up. It's a large nut," Heald says. "Everybody's cost of energy has increased over the last three years. All we're trying to do here is fix a reasonable price which at this point seems to be apparently less than we were paying over the last couple of years so that we begin to control our energy costs."

Ludlow and some other Vermont cities and towns are negotiating with a Portland, Maine-based company called Competitive Energy to set fuel prices for the winter.

On its Website, the company says it's saved Manchester, N.H., more than $2 million since 2009.

Of course savings in small towns would be more modest. But Ludlow town officials say with fixed propane and diesel rates they could save about $30,000 on energy costs compared to last year's prices.

Frank Heald says there's an appeal to control cost, whatever it is. "If you can lock it in at a price that will save money, there's no apparent reason to think that things are going to get a whole lot better."

The Vermont League of Cities and Towns doesn't recommend that municipalities lock in their prices. But executive director Steve Jeffrey won't advise against it, either. "Dealing with any commodities is always a sketchy kind of thing, Jeffrey says. "Oil prices are down 25 percent from their high, so whether they continue to go down or stay the same or go up, it's certainly a gamble."

A gamble, but gas prices have recently sent many towns over budget. In eco-conscious communities like Montpelier, city officials are trying to use small-scale technology and replace fossil fuels with local biomass.

Tags

public_post ludlow montpelier gas_prices municipal_budgets energy_efficiency energy_costs business politics cities
comments powered by Disqus
Supported By
Become an Underwriter | Find an Underwiter