Understanding Your LP Gas Delivery Cost

the backside of a propane delivery truck.

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What Type of Propane Delivery Program is Best for You?

If you have propane at your home or business there are a few different delivery options available to you. Propane can be delivered on an automatic delivery basis, will-call basis, or calendar basis. Often when I am talking to customers they are not aware of the different delivery options and just like to stick to whatever option they have done in the past.

When speaking with consumers new to propane they will often ask which delivery option is best. That is not a simple answer, because not everyone has the same set of circumstances as everyone else. Factors for choosing the right delivery program depend on what you use propane for, if you’re planning to move in the future, and your overall monthly budget for utility expenses.

Automatic Delivery

Automatic propane delivery is when your propane provider delivers propane to your home or business automatically throughout the year. Thank you Captain Obvious. You will not need to call or monitor your tank throughout the year. Your local propane dealer will come out periodically and deliver throughout the year depending upon your usage rates. In order to be on this program you will need to use propane on a consistent basis. The usage includes using propane for whole-house heating and or using it for hot water.

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How does the company know when to come out? This is a great question and often two identical-sized houses can have much different usage rates. The propane company does not want you to run out of propane and they don’t want to make small partial deliveries either. So, what companies do is monitor your usage using a degree-day delivery system.

A degree day is a measurement of weather. To calculate a degree day you simply average the high and low temperature of a day and subtract it from 65. For example, a typical January day in Philadelphia the high is 40° and the low is 23°. That gives us an average of 31.5. The total degree days for that day is 33.5. (65-31.5=33.5)

Your home’s usage is assigned a usage rating by taking the total number of degree days between your last delivery and dividing that by the number of gallons you are delivered. This is known as a K-factor or usage factor. For example, the month of January would have an average of 1000-degree days accumulated. If the company delivered 500 gallons, your home’s usage rating or K-Factor would be a 2.

A K-factor is like the miles per gallon for a car. An old V-8 muscle car that uses a lot of gasoline would be like an old 5,000-square-foot farmhouse with little insulation and would have a low K-factor. Conversely, a compact car with a small engine would be similar to a smaller type of home that is well-insulated. Depending on how cold it is and your historical usage, you will be able to get an idea of how often your company will come out and make deliveries. If you use propane for hot water, industry standards predict that you will use approximately one gallon each day and come out accordingly.

Benefits

delivery trucksThe obvious first benefit of automatic delivery is the convenience factor. You don’t need to dredge out to the tank in a foot of snow and check your tank gauge. Also, you have the peace of mind of knowing your propane company is going to keep your family warm. They really don’t want you to run out of propane for multiple reasons. No company wants to pay a driver overtime to make a delivery in the middle of the night. Also, if you run of out propane and there is damage to your home, the propane company may be liable, if it was their fault. So, companies want to keep your tank with the product at all times.

Another advantage for automatic delivery customers is they often have budget plans available to spread your payments out over the whole year. Lastly, oftentimes companies offer a prepay option to automatic delivery customers as well. This will help whoever wants to pay for their fuel out front at the beginning of the season and not have to worry about paying the heating bills as they come. If the company you’re currently ordering from doesn’t offer either of these services, consider switching providers as this should be the standard.

Disadvantage

The main disadvantage is that the company is coming out without notice and it’s possible you could incur a bill that you might not be expecting. If you are about to move or are renting, the company might make a delivery and you will no longer be living there to use the product. So, you would have to pay for a delivery that you might not even be able to use. Read this piece if you want to find out more about the difference between owning and renting your propane.

Will Call Delivery

If you have propane at your home or business but don’t use it consistently, being on a will-call basis might be best for you. Examples might be using propane for a generator or fireplace insert, or to heat a swimming pool. It is very difficult for a company to make an accurate assumption about your usage, which could lead to runouts for small partial deliveries, which could incur fees from the propane supplier.

If you use propane for heating and you own your tank, being on will-call is an option as well. Will call customers will want to call to schedule a delivery when the tank is at approximately 20%. This will give the propane company enough time to schedule a delivery and fill your tank before you completely run out of product.

Benefits

A major advantage of being on will call is that you know when to expect a bill and can budget for it. In addition, if you’re on will call and you own your tank, you can shop around for prices and get the best deal possible. If you use propane for a generator or fireplace insert, it is very difficult for your company to predict when your propane tank will need a fill-up and how much you are using. Often times this leads to either you running out of propane during heavy usage times or getting deliveries of small amounts which could result in an added fee from the company. So, it really is best to keep an eye on your tank, make sure it hasn’t expired, and call when your tank is at about 20% full.

Disadvantages

Being on will call for whole-house heating, it’s very important that you remember to monitor your tank and call when you are getting low. Sometimes in our busy lives, we forget to check the tank. When this occurs oftentimes there is a delivery charge. Another downside of auto delivery for whole house heating is during times of extreme cold weather or snow and ice when delivery times could be delayed.

Calendar Delivery Basis

The last option for propane delivery is on a calendar basis. What this means is that your propane provider will come every so many days or weeks, etc. This is good for many large commercial accounts like restaurants for industrial uses. They might be on a program where they get deliveries once every one or two weeks, etc. But it can also be good for homeowners as well who use propane for hot water and/or cooking or even for a fireplace. Often a company can come out quarterly or even annually. The main advantage is that you don’t always have to be monitoring the tank, but on the flip side, if you’re using more propane than normal you will have to be proactive and contact the company if your tank gets too low.

Ryan McCabe

Ryan McCabe

Ryan is a home and small business energy expert, having overseen retail propane, heating oil, and HVAC services companies. On ComparePropane, Ryan writes about things that people should know when shopping for or using propane in their homes and businesses. 

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