The seasonal customer conundrum

March 1, 2006 By    

Virtually all propane marketers have seasonal customers, primarily on their residential accounts and usually in areas where vacationing is a big part of the local economy. People often purchase second homes or have a hunting lodge that they might only use for a portion of the year or just on weekends.

These types of residences also are more frequently used by people other than the owner of the property and the individual with whom the gas company has a delivery agreement.

 John McCoy
John McCoy

Many marketers enter into what they call a “keep-full” arrangement on these seasonal accounts. The difficulty with a keep-full account under these circumstances comes when the customer decides to use the residence in a way that differs from the historic usage and causes a dramatic change in the gas consumption patterns of the account. If the keep-full is pegged to historic usage, the chance of the customer’s tank running out of gas increases.

Any time there is gas used in a vacant property for an extended period of time, there is an increased risk of damage. It is always possible that the home’s furnace breaks down during the vacancy, allowing pipes to freeze in the colder climates. It’s possible that other problems occur to the gas system, allowing a leak to occur that leads to some other hazardous condition.

Marketers take different approaches to this situation.

Some require that their customers employ caretakers that regularly inspect the home for heat and the tank to be sure it does not run dry. This can still present problems to the account if there is not a clear agreement as to what a regular inspection means for the caretaker both in terms of frequency of visits and tasks to be performed (i.e., checking appliances, thermostats and tank levels).

Some marketers require that customers tell them if the tank runs below a certain level, such as less than 20 percent. This is helpful, provided the written contract spells out that it is up to the customer to notify the retailer when the tank falls below the threshold for notification. If that notification is not given, it needs to be specified that the tank keep-full agreement is no longer valid.

Other marketers require customers to advise them of any change in their usage patterns that might impact the historical consumption patterns. The problem is that a customer might not know if the pattern has changed from historical consumption. They likely don’t understand how degree-day consumption patterns work or how a poorly running appliance might spike consumption patterns.

These requirements are often seen in keep-full agreements, bill stuffers and, worse, confirmed only in conversations with customers.

The goal of marketers is to keep customers happy. That means the reasonable expectations of the customer need to be met. It also means that marketers try to avoid losses to customers when they have the means to control the outcome.

Proactively, the reader should decide to implement the caretaker requirement, the 20 percent notification by customer and the notification of change in gas consumption patterns into written contracts for seasonal or weekend accounts. These are important safety and customer satisfaction measures.

It might also be worthwhile to have a separate delivery agreement for seasonal or weekend customers with keep-full agreements. These are not keep-full customers in the traditional sense; they have additional requirements to continuously keep their tanks full that do not exist for year-round customers.

John McCoy is a trial lawyer with the firm of McCoy & Hofbauer in Waukesha, WI. A founding member and past president of the Propane Gas Defense Association, he specializes in catastrophic fire and explosion cases and product liability disputes.

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