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We have never locked in our fuel, and have been informed by our managing agent that the they don’t participate in fuel lockins...
That said, the boards independent review has shown us that a lock in good be a good management tool and hedge against a rise in prices, while the downside is there, we feel it’s limited considering what we paid the last two years.
We are now considering a lock in for 5mos to lock in this years heating budget which is lower then the last two years by 50%+. What are your thoughts and or feelings and experiences?
Some other interesting notes – we are a small co-op 58 apts that uses about 48K gallons a year with about 20K required for 09 at this point. Residential board members are inclined to move forward, sponsor has indicated they have no interest and would vote against a lock in.
Thank You all for your responses in advance.
We currently use #6, and have several requests for proposals for NYSERDA partners to conduct an energy audit and upgrade. The resident board members and owners are for a possible upgrade and energy savings, but have hit strong resistance, sluggishness from the sponsor/managing agent on the entire heating oil process.
If we can realize the savings from the heating budget for the remaining 09 year, the plan is to redirect the savings to further the NYSERDA study and planning.
This is one of the two options, the other was to create an oil bidding program, however the managing agent/sponsor has already dked this idea as not feasibly possible from an operations standpoint on there end.
Thanks for the comments.
Is this a sponsor controlled Board or a Resident Shareholder controlled Board?
With a lock in you are either the hero or the goat.
There is just no such thing as clairvoyance in regard to the price of fuel oil.
What a lock in will do for your building is give you budgetary insurance, no more no less.
As an alternative you may also wish to consider an agreement with your supplier on a cap.
Best of luck.
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I've locked a few of my clients in during the past winter and we were able to see a significant savings by entering below market. It is a risk to take, but at the very least you are locking in your budget and aren't subject to the fluctuations of the market. I would competitively bid it out between a few companies to see what the market is calling for now. What # oil are you using? Have you also looked into converting to an interruptible gas burner as well?
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