Oil prices burn budgets

By EDWARD D. MURPHY, Portland Press Herald Writer

As the winter heating season kicks into high gear, Mainers are buying less heating oil per delivery in order to avoid a big bill and falling behind on other payments. Some people are taking out heating-bill loans, which are being offered for the first time this year.

"We hear stories and get calls about people wearing two pairs of pants, two shirts," said Grant Lee, executive director of the Peoples Regional Opportunity Program, which provides heating aid to low-income residents. "They're bundling up at home and trying to keep heating cost down. They're having to make some pretty tough choices."

With heating oil prices averaging more than $2.30 a gallon, and kerosene, propane and electric rates all sharply higher than a year ago, budgets are being refigured, other bills set aside and savings accounts raided to keep homes and apartments warm.

"We told all of our customers back in August to set aside more money" for heating oil this winter, said Matt Marks, the general manager of Yorkie Oil. Still, Marks said, more customers seem to be ordering 100 gallons at a time to avoid the high cost of filling a tank, which typically holds 200 to 250 gallons.

Soaring crude oil prices this year have sent home heating oil prices to a statewide average of $2.34 a gallon, according to the latest survey by the state's Office of Energy Independence and Security. That's 45 cents above the price at this time last year, the state said.

Rachel Moore, a student and temporary worker, said she's behind on some of her bills because of the higher heating costs and her own circumstances.

"It's killing me," she said of the cost of keeping two oil tanks filled in the two-unit house she owns in Durham. She said normally the heating oil is her tenants' responsibility, but the house is empty now because Moore is selling the property.

"Now I'm filling both of them every other month, and I just got a bill for $1,000," said Moore, who also is paying for propane to heat the house she's renting in South Portland.

Moore said she's behind, for the first time in her life, on payments on her car and credit cards. "I'm waiting for more cash flow" to catch up, she said.

Eileen Parisi in Sanford said her inability to pay for heating oil led to "desperate measures."

Parisi said she called her oil supplier and asked for a delivery, but told the company that she wouldn't be able to pay for about a week. The company said it would supply the oil only for cash on delivery from Parisi, who admits her credit history is not the best.

Parisi said one wood stove in her home was unusable because of chimney problems, so she used the one in her bedroom. She was up much of the night early last week feeding that stove and failed to latch the door tightly, she said. A log rolled out, setting her bedroom on fire.

Parisi and her two children managed to get out safely, but her bedroom was destroyed and the rest of the house suffered smoke damage.

Parisi had homeowners insurance, so the house will be repaired. She hopes to move back in a few months.

Some oil suppliers work closely with social service agencies to help customers get assistance in paying their bills.

"Our credit departments are working long and trying very hard to work things through with our customers," said John Peters, president of Downeast Energy. "We realize it's even more difficult than it was last year."

Peters noted that some customers started this year's heating season with unpaid balances left over from last year, exacerbating the situation.

"It's a difficult situation for the consumer and the companies," he said.

Heating bills have gotten so high that a handful of credit unions in the state are offering loans to help consumers.

University Credit Union, which is based in Orono and has a Portland branch, said its "energy loan" can be used to pay for fuel, buy a wood stove, add insulation or otherwise make a home more energy-efficient.

Melanie Israel, marketing director for the credit union, said the interest rate of 5.99 percent for the one-year loan is half the rate on most unsecured loans. Payments are made directly to oil companies or contractors, she said, so the credit union is assured the money is spent for its intended purpose.

The idea, Israel said, is "to even it out, so instead of paying for all your oil at once out of your pocket, it's going to spread it out over the rest of the year."

Joe Gervais, senior vice president of lending, said the loan program will have an added benefit - the credit union will be able to identify and help customers who might have more serious financial problems that high heating bills are making worse.

Borrowing money to pay for ongoing expenses - rather than an asset like a house or car - can be a danger sign and put people even further in debt if the underlying financial problem isn't addressed.

Gervais said the credit union hopes to have those customers sit down for debt counseling, which could lead to refinancing some existing loans, debt consolidation or a home equity loan.

"If they're in need of this product, they're in need of other relief as well," he said.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at

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