Spring can't warm the cold facts of fuel debt

Costs bury some firms, many clients

Heating oil prices have increased almost 50 percent since the start of the fall heating season. (Bill Polo/Globe staff/file 2007)

Although heating season is all but over, bad debts and unpaid bills are posing problems well into spring.

Area oil dealers say they are holding many thousands of dollars in bad debts, and more than a few have gone out of business because they can't collect what customers owe them. Those fuel dealers who remain in business are unable to extend liberal repayment terms, causing more customers to go into debt.

Meanwhile, one in 10 electric customers, and almost as many gas customers, enter spring with unpaid bills, according to David Graves, a spokesman for National Grid, which provides electricity and gas to many South Shore customers. At the end of March, about 111,000 out of 1.2 million electric customers were at least three months behind in their accounts, he said; for gas customers, it was about 74,000 out of 825,000.

At the request of Governor Deval Patrick, National Grid extended by one month, to May 1, the no-shut-off period that protects certain vulnerable households, such as those with elderly or ill members, or children. Meanwhile, state officials extended to May 16 the deadline for applying for goverment assistance in paying fuel costs. Applications, sharply up from last year, continue to roll in.

Lawmakers, social service agencies, and oil dealers south of Boston all say the real toll will be felt this fall, when many consumers will be unable to muster enough money to make even the token payments that would allow utilities and oil dealers to continue service.

"We better batten down the hatches because there's going to be a real crisis going into next winter if we can't get these people who have been shut off or are facing shutoff back on the rolls," said state Senator Michael Morrissey of Quincy, chairman of the Senate Telecommunications, Utilities, and Energy Committee.

Heating oil prices have increased almost 50 percent since the start of the fall heating season, industry trackers say, from a statewide average of $2.72 a gallon last October to $4.03 a gallon as of April 29. And the cost of propane - used throughout the more rural part of Southeastern Massachusetts for home heating and cooking - has gone up even more.

According to Pat Daly, executive director of South Shore Community Action Program in Plymouth, the wholesale price for propane gas delivered to homes in her area has skyrocketed from $2.31 per pound delivered a year ago to $4.43 a pound today, an almost 100 percent increase.

The net effect, she said, has been devastating. "There's no way anyone on a fixed income or otherwise is keeping up with this," she said.

According to Daly and others who administer fuel assistance programs, a pattern has emerged in recent years in which many low-income people have been borrowing from future fuel benefits to pay past debts.

"We have situations where people applied their entire fuel benefit for the winter of 2007-2008 to the bill they owed for 2006-2007," said Beth Ann Strollo, director of the Quincy Community Action Program. "They're always behind."

Jonathan Carlson, director of Self-Help Inc., which administers government fuel assistance programs in the Brockton area, said his agency has seen an increase of about 600 applications to date from last year's totals. As of April 30, Daly said her agency has seen about 700 more applications for fuel assistance than last year. Both agencies are still receiving applications. The maximum amount of government-subsidized fuel aid for a family of four making less than $20,000 a year remains capped at $1,165.

Daly said that if people show up who have already exhausted their benefits for this heating season, she tries to provide help from a fund set up from private donations.

The state provided $15 million in a supplemental budget to augment federal benefits this year. That money "in many cases allowed people to get their service back," said Morrissey. "But it hasn't decreased the number of people in arrearages and it hasn't solved the problem, only deferred it."

It is difficult to track how many fuel dealers have gone out of business, because they are embarrassed by the situation and don't want it known, said Michael Ferrante of the Massachusetts Oilheat Council, which represents about 350 of the roughly 800 fuel oil dealers statewide.

"We usually find out when one of our longtime members doesn't renew a membership," he said.

But Ferrante said he has heard from some dealers who are holding "bad debt" - money they're owed by customers that is considered uncollectible - that totals six figures.

Fuel dealer Len Bicknell, owner of the Alvin Hollis Co. in South Weymouth, said in some cases, his company has served several generations of families in the area.

"We try to work with our customers, especially longtime ones, to make payment arrangements, but at some point we have to ask for the money," he said. "We hate to shut off service to a customer, but there's some people we won't be able to help."

Both Ferrante and Bicknell say they make it a point to let consumers know of aid options, such as the federal programs and the Salvation Army's Good Neighbor Fund.

"God bless the oil dealers who have worked with us," said Carlson, who acknowledged hearing from many dealers struggling under a mountain of bad debt. "When our clients struggle, they struggle."

Rich Fahey can be reached at richwrong@comcast.net.