Hennessey Introduces Bill to Protect Propane Gas and Home Heating Oil Consumers
Legislation targets long-term contracts
In the past, some Pennsylvania propane gas or home heating oil consumers have entered into long-term, prepaid contracts with a provider, only to see that provider go out of business. In response, Rep. Tim Hennessey (R-Coatesville) recently introduced a bill that would protect these consumers from losing their money in similar situations in the future.
“Currently, consumers who enter into prepaid contracts are at the mercy of the propane and home heating oil companies,” Hennessey said. “And there are many good companies. But, if a company goes belly up, consumers lose their money and, worse yet, still have to find a way to pay to heat their home. There has to be a basic level of protection for consumers and an assurance that they will get what they paid for.”
To protect consumers, Hennessey’s legislation would require propane gas and home heating oil suppliers to do one of the following before entering into long-term, prepaid contracts with consumers:
  • Secure heating oil or propane gas futures contracts equal to 75 percent of the company’s commitments to prepaid consumer contracts.
  • Secure a surety bond equal to no less than 50 percent of the funds collected from prepaid consumer contracts.
  • Secure a line of credit or a letter of credit from an institution insured by the Federal Deposit Insurance Corp. (FDIC) or deposit cash into an FDIC-insured account equivalent to the total cost of the fuel the company is committed to deliver through prepaid contracts.
“One way or another, propane gas and home heating oil companies must back up their commitments to consumers,” Hennessey said.
Under Hennessey’s legislation, consumers would be protected under the Unfair Trade Practices and Consumer Protection Law, which would enable them to seek compensation through a civil lawsuit in court and also pursue the matter through the state Attorney General’s Office.

Introduced as the “Prepaid Heating Oil and Gas Consumer Protection Act,” Hennessey’s House Bill 2473 has received bipartisan support. Of its 29 co-sponsors, 15 are Democrats and 14 are Republicans. The bill has been referred to the House Consumer Affairs Committee.

Rep. Tim Hennessey
26th District
Pennsylvania House of Representatives

(610) 380-8600
(717) 787-3431
Contact: Dan Massing
(717) 772-9845
April 23, 2008