Frequently Asked Questions

The Cap Price Program is offered during the summer months.

Heating oil futures and many other commodities, including crude oil, gasoline, natural gas and propane, are traded on the New York Mercantile Exchange and several electronic exchanges. Contracts are sold for each winter month in 42,000 gallon increments. Price protection contracts known as options are sold against these futures contracts. Option contracts offering upside protection are known as “calls” and option contracts offering downside protection are known as “puts.” Futures contracts, calls and puts are the price protection tools that allow us to offer the Cap Price Programs.

In recent years these futures markets have become very volatile. This volatility has increased the price of a call or put option from approximately five cents per gallon to as much as 25 cents per gallon.

The answer depends to a large extent on how you view risk. The Cap Price Program is not designed to guarantee that you save money but to offer assurance regarding the price that you will pay during the heating season. If you are willing to take some risk, you may want to pay the market rate throughout the winter. If you are risk adverse, or you want to accurately budget your costs, then the Cap Price Protection Program is the way to go.

Yes, the Cap Price Program can be used in conjunction with our Even Payment Plan.

Larger equipment costs more to install and more to operate. Mechanical equipment operates most efficiently in the middle of its run cycle. Oversized equipment cycles on and off more frequently, which reduces efficiency, can create service problems and reduces the life of the equipment. Taxicab engines in New York City are known to log up to 500,000 miles because they run continuously without starting up and shutting down.

It is a law of physics that warm air (winter) or cool air (summer) inside a building will seek equilibrium with the outdoor temperature. This process is slowed down, but not stopped, by the insulating value of windows, doors, walls and ceilings. The rate at which heat (wintertime) and cooling (summertime) leaves a building can be measured by what is known as a heat loss calculation (winter) or a heat gain calculation (summer).

Years ago, these calculations were done by hand, but today we use computer programs. In order to generate an accurate calculation, we need to know the dimensions of each room, the area of all windows and doors and the insulating value of the building materials. The greater the insulating value of the building materials used in constructing your home, the lower the heat loss or heat gain.

Heat loss and heat gain calculations are reasonably accurate, but not foolproof. While we can make strong educated guesses, it is not possible to look behind the walls of your home to see exactly what insulation was installed, the quality of the installation and whether any of the insulation has settled, leaving gaps.

With regard to heat gain calculations (cooling), there are no other practical methods other than using the building envelope as described above. However, with regard to heat loss calculations (heating), we have found that tracking fuel consumption and comparing it to degree day (outdoor temperature) information is easier, quicker and more accurate. This fuel consumption method, which was developed at Hart & Iliff, calculates exactly how much energy must be introduced into a building to overcome the heat that is escaping to the outdoors through the walls, windows, doors and ceilings of the building. An article we wrote about this method for sizing heating equipment was featured in three major industry publications and has been used by heating professionals all around the country.

No, our profit margin, which is the difference between the wholesale and retail price, remains the same regardless of the price of oil. We deliver only when our system tells us you need a delivery.

No, the price for will-call and automatic delivery customers is the same.

Degree days are a measure of how cold it is outside, equal to the difference between the average temperature for the day and 65̊F. For example, if the average temperature on a particular day is 30̊F, that would be the equivalent of 35 degree days. We take a degree reading each day and enter it into our computer. Using the tank size and the degree days, our computer develops a burn rate that tells us how much oil is used for each degree day. If your oil fired heating system makes your domestic hot water, our computer takes into account a hot water factor as well. Our system is designed to generate a delivery ticket so that we make a delivery when the reserve in your tank is approximately 30% of the tank size.

It tends to be pretty accurate during the winter months but somewhat less accurate during the fall and spring. The accuracy can also vary from customer to customer.

A major cause of indoor air quality problems is pollution from sources in the home that release particles or gases into the air. An example might be fibers from a carpet. Often there is insufficient ventilation to add fresh air and expel stale air out of the home. In addition, high humidity levels can increase the concentration of pollutants by creating an environment where mold and mildew can flourish.

There are three primary methods to improve indoor air quality. The first is to eliminate pollutants from the home. The second is through the use of air cleaners, which can be effective at removing particles from the air. However, air cleaners are generally not designed to remove gaseous pollutants. The third method, which is often the easiest to implement, is by improving ventilation. Ventilation adds fresh air to the home and expels stale, musty air.

Outdoor air enters and leaves a home by infiltration, natural ventilation and mechanical ventilation. The rate at which outdoor air replaces indoor air in a home is described as the air exchange rate.

The simplest way would be to open a window on each side of the home. The disadvantage of this approach is that it will increase your heating and cooling costs. A more practical way of increasing ventilation is through the installation of a mechanical ventilation device. Two effective mechanical ventilating devices are Humidex and an air-to-air heat exchanger.

Humidex is a relatively simple device that was developed in Canada but is rapidly gaining acceptance in the U.S. market. Humidex is installed in the basement or lowest level of a home. It expels the polluted air from the basement and replaces it with fresh air from the upper levels of the home. An air-to-air heat exchanger is a sophisticated device that directly exchanges outdoor air with air in the home. It is designed to extract heat from the indoor air before it’s expelled outside of the home and is used primarily in commercial buildings.

Up to this point, in most cases, the payback on solar equipment in New Jersey has not been enough to make it economically viable. However, this situation is beginning to change. Higher energy costs and recent tax law changes (see related article) have increased the rate of return on an investment in solar energy equipment.

They are normally strategically mounted on the roof of a home. However, they can also be mounted on the ground in specially designed solar panel holders.

Solar panels can be used to generate electricity (photovoltaic system). They can also be used to generate domestic hot water, heat a swimming pool or in a hot water radiant heating system. Generating electricity and heating domestic hot water are the most economically viable since they can used 12 months a year.

Photovoltaic systems convert energy from the sun into electricity. Electricity produced by solar panels is tied into the electrical system in a home or building to supplement the electricity supplied by the local power company. On a sunny day, when electric consumption is low, the excess electricity produced by the solar panels goes back into the electric power grid and is credited to your electric bill.

A solar hot water generating system consists of four main components: storage tank, solar panels, circulator and a control. The storage tank generally contains two coils, which are used to transfer heat to the domestic hot water. The first coil is attached to the solar panels and the second to a supplemental heat source, such as a boiler. The circulator moves a water/antifreeze mixture from one internal coil in the storage tank to the solar panels on the roof. The solar panels heat the water/antifreeze mixture and return it to a coil in the storage tank to heat the domestic hot water.

At night or on cloudy days, a secondary coil tied into an supplemental energy source might be necessary to produce sufficient domestic hot water. Generally, the solar system can produce 60% of the annual energy demand for domestic hot water.

When you pay for service as you go, you never know when a expensive bill will come. Customers who need only a tune-up one year can have three service calls the next. Having a service plan eliminates these ups and downs and allows you to rest easy knowing things are taken care of. It also increases the likelihood you’ll have small problems taken care of before they become big problems.

Every system should be tuned up once a year; it saves you up to 10% or more on your oil bills and prevents other problems form developing. The average cost of a tune-up is approximately $185. Now consider what happens if your system needs repair and you don’t have a service plan.

The cost to replace any major component of you heating system could easily exceed $250 or more. And if any repairs are done after normal business hours, they would cost even more.

Our service plans cover all of this and much more. For less than the price of one cup of coffee a day, you can eliminate worrying about virtually anything that can go wrong with your heating system.

It depends on the type of heating system you have and the level of protection with which you’re comfortable.

Our Comfort Plan covers the most common repairs that oil customers face and includes a professional tune-up. If you have a hot water system, our Presidential Plan goes one step further and also handles repairs to water related parts such as circulators and zone valves. If you have a new system under warranty or are prepared to pay for service as needed, you might not need a service plan at all.

Yes. We maintain a full-time staff of highly trained and certified technicians who continually attend courses to stay up-todate with the latest technology.

Yes. (Although there’s almost nothing the Presidential Plan doesn’t cover.)

With both plans, there is a small flat rate charge for calls after 8:00 pm Monday through Friday and for all calls on weekends or holidays. In addition, non-emergency service, outside of normal working hours, is chargeable at after-hour rates.

No heat during cold weather, serious fuel leaks, visible smoke or dangerous situations.

Crude oil is refined by heating it to 700̊ F. At this temperature, the various products, including gasoline, kerosene/jet fuel and heating oil/diesel fuel, naturally separate from the crude oil. During the normal refining process, called “straight run,” a certain amount of each product naturally flows from the crude oil.

Today, after the straight run process, virtually every refinery uses a secondary refining process known as “catalytic cracking.” This process applies additional heat and pressure in order to force a higher percentage of gasoline from the crude oil. Catalytic cracking is very effective in increasing the gasoline yield from every barrel, but the harshness of the process makes the gasoline and other petroleum products unstable.

If you had two bottles containing samples of heating oil, one from a straight run process and the other from a catalytic cracking process, the samples would initially look the same. However, after a few weeks, some of the parafins in the catalytically cracked product would start to separate, causing the oil to begin to break down and change color, thus creating a visible difference.

Because it contains stabilizers and dispersants, Ultrablend does not break down over time, thereby retaining the characteristics of heating oil produced in a straight run process. In addition, Ultrablend contains detergents to keep your fuel system clean and an inhibitor to prevent wear and tear on the metal components of your fuel system.

There is a type of algae that can grow in heating oil. This algae will cause sludge formation in the oil tank. In order for the algae to grow, there must be some water present in the bottom of the tank. As a result of condensation, and the fact that water is heavier than oil, virtually every oil tank contains some small amounts of water in the bottom. Ultrablend contains a microbiocide that inhibits the growth of algae and prevents sludge formation in the tank. This microbiocide is approved by the United States Environmental Protection Agency (Registration No. 1706-101).

Ultrablend doesn’t degrade over time, retaining its pristine straight run characteristics. It cleans and protects your fuel system, inhibits the growth of algae and prevents sludge formation. Cleaner oil means your system runs cleaner and more efficiently. Since the introduction of Ultrablend, our customers have experienced a 75% reduction in fuel-related service calls.

There are two components to each job. The first component is a diagnostic or trip charge. This covers the cost of getting our technician to the job and analyzing the problem. The second component is the actual repair charge. This charge is based on all the costs we incur in having the technician perform that particular repair.

The advantages to you are as follows:

You don’t have to concern yourself with the experience level of the technician. The charge will be the same whether you get our most experienced or least experienced technician.

With “Up Front No-Risk Pricing” there are never any surprises. We can quote you a firm price before we do the work.

You don’t have to concern yourself with how much time the technician spends on the job. Even if the technician encounters problems and the repair takes longer than expected, it won’t affect the price.

Since the repair is not based on the actual time spent on the job, if the technician takes some extra time to explain the operation of your unit, it does not affect the price.

I have a service contract. How does the “Up Front No-Risk Pricing System” affect my service contract?

If the particular repair is covered by the service contract, the terms of the service contract prevail. If, on the other hand, the repair is not covered by the service contract, then the repair would be priced using our “Up Front No-Risk Pricing System.” There is no guess work and we can quote you a price before you approve the repair.

Customers occasionally ask why full service oil companies like Hart & Iliff sometimes charge higher prices for heating oil than companies that do not offer full service. The reason is because of higher operating costs in two main areas:

By offering credit terms we end up carrying large receivable balances and incur significant bad debt charge-offs each year. So-called cash companies receive payment at the time of delivery so they do not incur these costs.

To maintain a high quality service department that is trained, staffed and equipped to provide you with the excellent service you expect and deserve, is very expensive. The prices we charge for service calls and service contracts are discounted and do not cover our costs. For example, we charge less for service than car dealers even though our traveling service shop makes our costs significantly higher. We make up for service losses by charging a little extra for oil and subsidizing our service department. Since cash oil companies generally do not have service departments and do not offer service contracts, they can charge less for oil.

Our new Easy Pay Plan is designed to eliminate our credit and service losses so that we can charge you a lot less for heating oil. How much less? About 15¢ per gallon.

With our Traditional Plan you get credit terms, a discounted rate for service and you are eligible for one of our outstanding service contracts.

With the Easy Pay Plan we receive payment at time of delivery through one of several available payment methods, the most convenient of which is Electronic Funds Transfer. Easy Pay Plan customers are not eligible for a service contract and pay a higher rate for service, but in return they get a significantly lower price for heating oil.

With either plan you get our exclusive Ultrablend Heating Oil, which burns cleaner than conventional heating oil. See the accompanying chart for a summary of the key provisions of the two programs.

Yes, provided that your monthly payments and all service invoices are paid via Electronic Funds Transfer.

The answer to this question depends, to a large extent, on your attitude about service repairs. Studies show that the average heating system starts and stops about 10,000 times each year. Particularly during the winter, they are called upon to work 24 hours a day, 7 days a week. You never know when your unit could break down, leading to an expensive repair. With the Traditional Plan you get a discounted rate for service work and are eligible for one of our service contracts. A service contract can eliminate unexpected repair bills and lets you rest easy knowing that things are taken care of. It also increases the likelihood that small problems will be taken care of before they become big problems.

If, on the other hand, you are most interested in getting the best price for oil, then the Easy Pay Plan is for you.

Most homeowners make their hot water using electric, natural gas/propane or oil fired water heaters. As a variant of these options, many homeowners who have an oil fired boiler make their hot water with a coil inside their boiler or with an indirect water heater attached to their boiler.

The ability of various fuels to make hot water is rated based on recovery rate. Recovery rate tells us how much hot water can be made in one hour. For example, if a hot water heater can raise the temperature of 10 gallons of water from 50̊ F to 140̊ F in one hour, the recovery rate is 10 gallons per hour. Because of higher flame temperatures, oil fired hot water making systems have the highest recovery rate of any fuel. The average recovery rates of the various fuels are as follows:

• Electric – 20 gallons per hour
• Natural gas or propane – 40 gallons per hour
• Oil – 120 gallons per hour

Therefore, oil makes six times as much hot water as electric and three times as much hot water as natural gas or propane. The accompanying chart summarizes these recovery rate

There are two things that control the available supply of hot water: the recovery rate and the size of the storage tank. For example, a 30gallon tank with a 120-gallon recovery rate provides 150 gallons of available hot water per hour. An 80-gallon tank with a 20-gallon recovery rate provides 100 gallons of available hot water per hour To increase the available supply of hot water you must either increase the recovery rate or the size of the storage tank. If you are making your hot water with a coil inside your boiler, you can dramatically increase the amount of available hot water by adding a storage tank.

According to studies conducted by Pace University, the Massachusetts Department of Public Utilities, Brookhaven National Laboratory, Greenpeace and the United States Environmental Protection Agency, the environmental cost of various heating sources is as follows:

• Oil heat and oil fired hot water – $2.01 per million BTUs (including transportion cost)
• Natural gas/propane heat and hot water – $2.04 per million BTUs
• Electric resistance heat and electric hot water heaters – $12.40 per million BTU

The reason why electric resistance heat and hot water heaters are so costly to the environment is because of the pollution created at the electric generating plant.

The health effects can vary from a mild headache to death, depending upon the exposure levels and time, as set forth in the table. As you can see, carbon monoxide is a very dangerous gas. A concentration of only 1% of the air, or 10,000 parts per million (PPM), will cause death in one to three minutes. The USEPA has set 35 PPM as the maximum allowable concentration for an 8-hour exposure.

Carbon monoxide is produced as a by-product of the combustion process when any gaseous, liquid or solid fuel is burned. Some primary sources of CO in the home include automobile exhaust, wood stoves and fireplaces, barbecues, home heating equipment and gas stoves and ovens.

In tests conducted at Brookhaven National Laboratory, it was determined that, on average, properly adjusted flame retention oil burners produce about 32 PPM of carbon monoxide. Research conducted by the American Gas Association and the Gas Research Institute indicate that average CO emissions for properly adjusted gas heating equipment is about 47 PPM. Both of these CO levels are very safe, especially since the CO being produced is carried up the chimney with the flue gases.

Wood stoves and fireplaces produce CO levels hundreds of times higher than oil or gas burners. USEPA data indicate that wood stoves and fireplaces can generate CO levels of more than 20,000 PPM, or 2% by volume. Therefore, wood stoves and fireplaces represent a very serious health risk if the combustion exhaust gases are not fully and completely vented from the house.

Oxygen is necessary for complete combustion. When the available oxygen is decreased, it adversely effects combustion. Both oil and gas heating equipment can produce elevated levels of CO when combustion air is decreased. However, they operate somewhat differently. Oil-fired equipment will smoke first and generate elevated levels of CO second. Gas equipment, on the other hand, will generate elevated levels of CO first and smoke second. Therefore, oil equipment has an important safety advantage. According to the U.S. Consumer Product Safety Commission, from 1981 to 1991, 3,036 people died in the United States from CO poisoning. Of that total, 78% of the deaths were caused by gas equipment and only 3% by oil equipment.

CO detectors are an important safety device that should be present in every home. Both plug in and battery operated types are available. CO detectors do not have to be located on the ceiling. Therefore, plug in detectors are recommended since they are easier to install and more reliable. They cost about $30 and can be installed in any electrical outlet.

CO detectors should be installed in the living space on each floor of your home. Do not locate them in the garage, over your boiler, or directly over a gas stove or oven. Experts also recommend that CO detectors that are more than three years old should be replaced, since the new generation of detectors are more accurate and less likely to generate false alarms.

Health Affects of Carbon Monoxide(CO)

Concentration Exposure Time & Symptoms

PPM %

9 0.0009 Maximum Allowed Ambient by EPA

35 0.0035 Maximum for 8-hour exposure

200 0.02 Headache in 2 to 3 hours

400 0.04 Life Threatening After 3 hours

800 0.08 Headache, Dizziness, nausea in 45 minutes, death in 2 to 3 hours

1600 0.16 Headache, Dizziness, nausea in 20 minutes, death in 1 hour

3200 0.32 Headache, Dizziness, nausea in 10 minutes, death in 30 minutes

6400 0.64 Headache, Dizziness, nausea in 2 minutes, death in 10 to 15 minutes

12800 1.28 Death in 1 to 3 minutes

As we have written about many times, before 1982, prices were determined solely by the laws of supply and demand. In 1982, crude oil and other energy products began to be traded on futures exchanges such as the New York Mercantile Exchange. These exchanges trade petroleum products in 42,000 gallon (1,000 barrel) increments. These contracts represent hypothetical delivery of the physical commodity at a future date.

The problem with trading futures is that 99% of the contracts are cancelled without ever taking delivery. A segment that ran on the CBS show “60 Minutes” indicated that the number of gallons traded on the futures exchanges is 17 times the number of gallons actually used.

Even though futures contracts represent the price at some future date, as time has gone by these contracts have become the sole method of determining the current price you pay at the pump or when you receive a delivery. A high percentage of the futures contracts that are bought and sold are traded by speculators. These speculators are only interested in making a profit, and it is indeed unfortunate that they single-handedly impact the prices all of us pay for petroleum products on a daily basis. In today’s market, it is often the case that supply and demand has little to do with the price of energy products at any point in time.

In July 2008, crude oil briefly traded at a high of $145 per barrel and then dropped all the way down to $40 per barrel in December 2008.

Is anything being done to limit the impact of speculators and cause energy prices to be determined by the actual levels of supply and demand once again?

Congress recently passed legislation authorizing the Commodities Futures Trading Commission (CFTC) to write regulations preventing excessive speculation. While draft regulations are written, the CFTC is wavering in implementing these regulations. The commissioners who vote on the proposed rules are under tremendous pressure from the financial services industry to adopt weak, ineffective regulations. Please visit stopoilspeculationnow.com to get the latest information and see how you can help lower energy prices.

Water temperature monitoring control.

Safety which is part of the primary control.

Draws oil to your burner.

Electronic valve that opens when thermostat calls for heat.

Circulates air through forced air furnace.

Burner fires into it.

Pumps water through system.

We take your estimated annual fuel usage and multiply it by an estimated oil price to come up with a total for the year. We then divide the total by 10 to come up with the equal monthly payment.

While most of our Even Payment Plans begin during the summer months, they are now eligible to start at any time during the year. However, to qualify for the Plan you must begin with a full, tank of fuel of fuel and no balance owed.

Yes, the cost of the service contract can be added to the Even Payment Plan and be paid for over the 10 month period.

The advantages are as follows:

1. It smooths out the peaks and valleys of your fuel bill and allows you to budget your household expenses.

2. There is no fee to participate.

3. You receive interest at 1.5% per month on all credit balances.

4. You receive a 5¢ per gallon discount at the end of the plan.

5. Any overage gets credited to next years plan. If there is a balance owed, you have two months to pay it.

The Capped Price Program, which provides a ceiling on the price you pay, can be combined with our Even Payment Plan.

Water is an excellent solvent which picks up impurities easily. As water moves through soil and rocks it dissolves small amounts of minerals and holds them in suspension. Calcium and magnesium (commonly referred to as lime or limescale) dissolved in water are the two most common minerals that make water hard. The greater the amount of lime, the harder the water.

As hard water is heated to make hot water, the minerals precipitate out of the water and collect or scale on the inside of pipes, water heaters and appliances connected to the water system. This limescale will result in reduced flow rates, loss of efficiency and early failure of components and hot water heaters. Eventually, the hot water pipes can become completely clogged. In addition, hard water will reduce the ability of soaps to lather.

The hardness of water is reported in grains per gallon (gpg) or parts per million (ppm). One gpg is equal to 17.1 ppm. The US Department of Interior and the Water Quality Association have generated the following standards.

Classification of Water Hardness

Classification      gpg      ppm 

Soft             0 – 1           0 - 17.1

Slightly hard      1 - 3.5         17.1 - 60

Moderately hard   3.5 - 7.0 60 - 120 Hard 7.0 - 10.5 120 - 180 Very hard 10.5 & over 180 & over

Water in Northwestern New Jersey tends to be relatively hard because of the composition of local rock formations. The hardness level can vary greatly depending upon where you live and whether or not you are on a municipal water system. Local Municipal water systems report hardness levels ranging from 3 - 27 gpg, which is the equivalent of 51 to 462 ppm.

If you are on a municipal water system your water supplier can tell you the hardness level. If you have a well you can test the water for hardness. This can be done at a lab or directly in the home. All of our service technicians have water test kits and can check the hardness level for you.

Experts recommend that mineral hardness should be treated if it is greater than 4 grains per gallon.

Historically, there have been two primary ways to treat hard water. The first is to soften the hard water through the use of a water softener. Water softeners remove hardness using an ion exchange process which replaces the calcium and magnesium with an equivalent amount of sodium or salt. The second approach is to condition the water and keep the minerals in suspension so they don’t build up or scale on the hot water pipes. This has been done for many years by adding a chemical phosphate solution to the water to keep the minerals in suspension.

A new way to treat hard water is with a device, known as HydroFlow, which was invented in Europe and is now available in the United States. HydroFlow’s patented design produces an electrical charge or current of 150 kilohertz (kHz) which propagates through the water in your plumbing system. This electrical field causes the minerals to flock together so that they remain in suspension and do not scale or collect on the pipes or the water heater. The suspended minerals are washed away and flow down the drain. HydroFlow requires no maintenance and costs just pennies a day to operate. In addition to preventing new scale accumulation, HydroFlow dissolves and removes existing scale, enhances filtration, kills algae and bacteria and inhibits corrosion. For more information see the related article.