Aggregations of oil deliveries for needy people are done at other levels of government. The Greater Portland Council of Governments (GPCOG), a regional planning agency, puts out to bid its purchase of fuel for Cumberland County suburban and rural town governments. It’s now in a two-year contract with Irving Oil. The fuel oil deliveries go to schools and municipal buildings, but they also go, in some towns, to general-assistance welfare recipients, in small deliveries.
For fuel oil to welfare recipients in the northern Portland suburbs, the price is about $1.72 a gallon, says Carol MacKenzie of GPCOG. This price represents a 28-percent discount from the recent Maine heating-oil average of around $2.40 a gallon. If the state were to get such a discount for LIHEAP oil this year, it would have up to $8.1 million more for poor people’s needs.
Another regional planning agency, the Midcoast Council for Business Development and Planning, has a locked-in price of $1.78 a gallon for this season for the fuel oil it buys for seven communities, among them Brunswick and Bath, and for their general-assistance recipients. Six companies bid on the contract, which was won by the local M.W. Sewall & Co.
A LIHEAP customer receives on average one oil delivery a year at state expense. When people outside housing authority or oil dealer circles have the state’s no-bid system explained to them, they express surprise that logistical or other problems would get in the way of reform.
“I would think they would be mandated to put it out to bid,” says Jeff Sneddon, the midcoast planning agency’s director.
“From a consumer protection standpoint, a competitive bid process would be beneficial,” says Francis Ackerman, a lawyer in the state attorney general’s consumer protection division.
Costs rising
Jo-Ann Choate, who administers LIHEAP for the housing authority, tells the story of Dorothy, a 79-year-old lady whose heating oil bill this year went from $1350 to $2000. Dorothy’s annual income, Choate says, is only $7500 a year, and the average income for LIHEAP folks is $12,000 a year.
“When we talk about poor, we’re talking poor,” she says.
But poor, elderly people do not have much political influence. By contrast, oil dealers are not poor, they often are pillars of their communities, they collectively employ thousands of workers, and they sometimes contribute to political campaigns.
According to the national Fuel Oil News, the number of small oil dealers in New England in 2005 with profits in the $250,000-to-$500,000 range doubled from the previous year.
A quick search of campaign contributions listed on the Maine Commission on Governmental Ethics and Election Practices Web site turns up many made by oil dealers and their political action committees, to both Republicans and Democrats. Political figures contacted for this article generally do not seem interested in LIHEAP oil prices. Several Democratic legislative leaders were offered the opportunity to look into the issue and comment, but did not respond.
Meanwhile, “most people think there will be a long-term rise” in heating oil prices, says oil dealer spokesman Jamie Py.
