End of the Level Propane saga

News that AmeriGas recently purchased former Ohio-based Level Propane brings to an end one of the wildest and most controversial issues that I have witnessed in my six years with this industry.

Ever since owner Bill Maloof launched Level in 1990, it generated heated criticism from propane marketers, consumers and industry leaders.

Riding outrageous promotional blitzes that promised “guaranteed” lowest propane prices – 39.9 cents per gallon locked for the year! – Maloof quickly built his client base by ruthlessly stealing residential customers from competing marketers in 25 states.

Thousands of those homeowners who took the bait soon were howling when their fuel bills doubled and they could not get refills in the dead of winter. Most were unaware of hidden “underutilization” fees and financial penalties that one U.S. district court judge called “deceptive and unconscionable.” More than 4,000 complaints were filed in Ohio alone.

The public outcry led to lawsuits and news media coverage that blackened the eye of the propane industry as a whole, eventually forcing the National Propane Gas Association to boot Level from its ranks.

I had planned to do a story on Maloof and his operations three years ago when he claimed the young independent had grown to 111 million gallons in retail sales, making Level the eighth largest domestic retailer. In fact, I spent a full day with him at his stunning corporate headquarters in suburban Cleveland. It was a surreal experience.

The palatial glass building was a fortress, equipped from roof to basement with high-tech security unlike anything I’ve ever seen in any business.

Maloof whisked me on a tour of the main floor, rattling on about his state-of-the-art computer systems, truck safety equipment, satellite tracking technology and a telecommunications center that rivaled the U.S. military command center in Baghdad. He proudly showed off his lavish office, where with the touch of a button he could summon up-to-the-minute sales data as well as computer reports detailing the productivity of each and every Level employee.

This guy is an operational control freak with a healthy ego and an obsession for business toys, I thought.

Maloof acknowledged to me that he was viewed as a “black sheep” in the eyes of the rest of the propane community. I don’t think that bothered him, though. After 10 years in the business, he had no involvement and none of the personal relationships that typify our close-knit industry. He just never fit.

Maloof spent the rest of the day trying to convince me that his company was the envy of the industry, a bold trendsetter far ahead of the business curve. “Level is the true model of how propane will be delivered in the future,” he defiantly proclaimed.

Perhaps. But for the sake of AmeriGas and the rest of our industry, let’s hope not.