DEFENDING OIL HEAT IN CONNECTICUT

THE GOVERNMENT CAN’T BE COUNTED ON
SO WE NEED TO ACT OURSELVES...NOW!

WHAT IS THE CEMA OILHEAT ALLIANCE?

From 2001 until February 6, 2010, heating oil retailers paid twenty points per gallon [.0020] on all gallons they purchased at wholesale for the National Oilheat Research Alliance [NORA]. 85% of that fee you paid came back from NORA to Connecticut and ICPA [now CEMA] was able to use that roughly $1 million to promote Oilheat, promote high efficiency Oilheat heating, promote energy conservation with Oilheat, and generally promote our industry and subsidize education at our school.

Unfortunately, Congress failed to reauthorize NORA before it expired on February 6, 2010, and hasn’t gotten it back into the law books since, despite all 23 states working very hard to do so.

That means that for the past two and a half years, ICPA [now CEMA] has not had any revenue with which to protect the Oilheat market and your business.

We cannot wait any longer for a Congress that is frittering away its time and your future and the future of our industry—so we decided we would try to recreate NORA and run it ourselves here in Connecticut. We need to get back into the business of promoting what is best about Oilheat and the Oilheat industry and the tremendous value you and every Oilheat marketer brings to Connecticut.

ICPA [now CEMA] petitioned the Connecticut Attorney General and the U.S. Federal Trade Commission for permission to re-create NORA by contracts between retailers and wholesalers. If every retailer signs a contract with all of their wholesalers agreeing to allow each wholesaler to charge twenty points [.0020] per gallon of all heating oil purchased—then we can raise $650,000 to $700,000 and use those funds to engage in public, consumer education and get back into the business of promoting what is best about Oilheat and the Oilheat industry.

After five months of work, ICPA [now CEMA] has succeeded in gaining the approval of the Connecticut Attorney General and the U.S. Federal Trade Commission to recreate NORA here in Connecticut, but through a contract between every retailer and all of their wholesalers. This is a strictly voluntary program. Having now achieved the necessary legal clearances, we are now presenting this contract to retailers and asking that they consider agreeing to allow their wholesalers to assess them twenty points per gallon [.0020] on all gallons of heating oils [defined in the contract] they buy at wholesale. Wholesalers would then send all of the funds to ICPA [now CEMA], instead of to NORA and then back to ICPA.

LET’S GET BACK IN THE BUSINESS OF PROMOTING WHAT IS BEST ABOUT OILHEAT ALL THAT TAKES IS EVERY RETAILER AND WHOLESALER SIGNING THIS CONTRACT

The CEMA Oilheat Alliance is a project of the Connecticut Energy Marketers Association [Association]. This project allows the Connecticut Oilheat industry to voluntarily replace funding lost when the National Oilheat Research Alliance [NORA], expired on February 6, 2010.

Wholesalers voluntarily collecting the CEMA Oilheat Alliance fee should mail this signed form to: CEMA Oilheat Alliance, 10 Alcap Ridge, Cromwell, Connecticut 06416

VOLUNTARY AGREEMENT

  1. The association has received anti-trust clearance from both the United States Federal Trade Commission [FTC] and the Connecticut Office of the Attorney General, to commence the voluntary, non-coercive collection of twenty points per gallon [.0020] on all gallons of heating fuels sold to retailers in Connecticut by wholesalers in Connecticut, as defined below. This is being undertaken to fund consumer education programs to benefit and defend the Oilheat industry in Connecticut.
  2. This collections process closely mirrors that used by NORA. In this program, however, the collection of twenty points per gallon [.0020] would be undertaken by wholesalers who voluntarily agree to collect the fee on behalf of those retailers with whom they do business who also voluntarily agree to allow the fee to be collected on all of their purchases of heating fuels from that wholesaler.
  3. There will need to be one contract between each retailer and each of that retailer’s wholesalers.
  4. Each retailer and each wholesaler may voluntarily leave this program, or enter this program, at any time each wishes to do so.

Each voluntarily participating wholesaler agrees to make the designated remittances outlined in this agreement on a monthly basis, within 30 days of the month for which the payment is made. [For example, for all gallons sold in January the appropriate remittance would be due by February 28th]

SCOPE OF THE CEMA OILHEAT ALLIANCE PROGRAM

  1. NORA authorized the collection of twenty points [.0020] per gallon, used to fund a variety of programs designed to benefit the Oilheat industry in the areas of consumer education, education and training, as well as research and development [NORA Expired 2/6/2010]
  2. The CEMA Oilheat Alliance requests the voluntary participation of retailers and wholesalers to collect twenty points [.0020] per gallon, used to fund a variety of consumer education programs designed to benefit and defend the Oilheat industry in Connecticut.
  3. The CEMA Oilheat Alliance program will cease operating on such date and time as the Congress passes, and the President signs into law, reauthorization of the National Oilheat Research Alliance.
  4. The name of any participating retailer, or non-participating retailer, will not be known and therefore, cannot and will never be made public. It will not be possible for anyone outside of the individually, voluntarily participating retailer and wholesaler to know what was purchased or from which wholesaler in this program.
  5. The name of any participating wholesaler, or non-participating wholesaler, will not be known outside of the staff at ICPA [now CEMA] who receives the signed agreement from the wholesaler and any payments made to CEMA pursuant thereto. ICPA [now CEMA] may not disclose, publish, state or in any way make public outside the ICPA [now CEMA] office or to any ICPA [now CEMA] member, contractor, representative or assigns which wholesaler[s] are either participating or not participating in this program. Any and all remittances made by voluntarily participating wholesalers will be aggregated so that when reported on an CEMA Oilheat Alliance financial statement it will not be possible to know either which wholesaler[s] are participating or how much each voluntarily participating wholesaler[s] has/have contributed to this program as a result of their permitted collections from voluntarily participating retailers.
  6. There are no refunds provided by this program.
  7. There are no auditing requirements in this program.

Fees paid by retailers under this program are for the education of consumers in a variety of media and, therefore, may be deductible as ordinary and necessary business expenses. Consult with your own tax advisor.

WE AGREE TO THIS, HOW IS THE MONEY USED?

According to the US Census [see chart below] Connecticut lost 31,565 Oilheat accounts between 2000 and 2010. That is a loss of $600 million in revenue in one decade.

The Oilheat market in the west is gone. The Oilheat market in the Midwest is gone. The Oilheat market in the Mid-Atlantic states is less than 1/3rd of what it was 20 years ago. New York, New Jersey and Pennsylvania have lost one million [1,000,000] Oilheat customers in the past 20 years. Connecticut has lost 5% of its Oilheat marketshare in the past decade.

The uses for our CEMA Oilheat Alliance funding is simple. Look at the statistics at left from the 1990, 2000 and 2010 United States Census.

Our role is to stop the erosion of our marketshare and work hard to rebuild confidence and consumer awareness of what is best about Oilheat and the Oilheat industry. If we don’t take the need to defend and promote ourselves seriously, then Oilheat in Connecticut will end up just like Oilheat in the west, Midwest and Mid-Atlantic— gone. Whether we succeed or fail is up to every single retailer and wholesaler.

When we had NORA funding, we promoted Oilheat as a clean, safe, reliable and high efficiency fuel of great value over the long-term. Oilheat has the highest efficiency heating equipment that can match up against any fuel. With BioHeat, the newest version of Oilheat mixed with cleaner burning, domestically produced renewable fuels, we have not only one of the cleanest fuels but one of the most efficient. Our Oilheat industry is made up of local, mostly family businesses that have served their communities for generations—not large, multinational, multistate utilities where no one can find the owner. We have a “build with oil” program focused on home builders, as well as an HVAC contractor outreach program focused on independent HVAC contractors. When we want to fight against bad public policy—such as the state’s new energy plan that heavily favors natural gas—we need resources to communicate with the public about our positions on those issues.

Go to the CEMA Consumer Education Committee’s website here > http://icpa.org/protect/marketing.php and see the great brochures, bill stuffers, radio and television ads we used to run when we had NORA funding and what we can run again. This website also has information about the American Energy Coalition [AEC], and the work it is doing comparing oil and natural gas to defend the future of Oilheat. We need to be able to tell a strong, positive Oilheat story—and our website illustrates what we did with NORA money to that end, when we had NORA money. We need to be able to contrast Oilheat with natural gas by telling the people of Connecticut the story the utilities will NOT tell them, as we are trying to do with AEC. We need to have resources to communicate with the people of our State about the public policy choices their elected officials are making decisions on that may not be in the long-term, best interests of our State.

We can meet and face these challenges—if we have the revenue to do the job.

RUNNING A CAMPAIGN TO DEFEND YOUR FUTURE

Our goal is raise at least $750,000 by this twenty points per gallon [.0020] assessment, which is the same amount of money CEMA had for consumer education projects when we had NORA money prior to 2010.

We will use these funds for the following purposes:

Television

When we run television advertising we cover the entire State of Connecticut on a combination of network and cable television buys. Typically, assuming we can raise the $750,000 we are seeking, we will run two eight to ten week television flights per year of approximately $300,000 each flight.

You may see what a 2009/NORA television ad buy looked like by going to the CEMA/NORA/Tri-State section of the Marketing Page in the Member’s Only section of our website here http://www.icpa.org/protect/ marketing/2009_ICPA_TV/ICPA_Spring_2009_TV.pdf

We already have several television ads we can use. You may view them online in the Member’s Only section of our website here http://icpa.org/protect/marketing.php. These television ads promote the best in Oilheat by focusing on our outstanding record of high efficiency technology that reduces energy consumption, saving consumers money. We focus on our local connection to all 169 Connecticut cities and towns and the contributions of our companies and employees to serving the people of the state. We focus attention on BioHeat, cleaner burning, renewable fuels that improve system operations and reduce emissions. We focus on what a great heating value consumers have with modern, clean Oilheat.

Radio

When we run radio advertising, again we cover the entire State of Connecticut with morning and afternoon drive time on the highest rated stations we can buy with the broadest and deepest penetration for radio listeners on both AM and FM stations. Typically, assuming we can raise the $750,000 we are seeking, we will run two six to eight week radio flights per year of approximately $40,000 each flight.

We already have several radio ads we can use. You may listen them online in the Member’s Only section of our website here http://icpa.org/protect/marketing.php.

American Energy Coalition

The AEC group aggressively seeks to counteract what utilities are trying to do to your business. In the Fall of 2012 we combined with AEC for a $53,000 radio campaign. If we had more contributions, we would be able to run the campaign on more stations.

You can learn more about AEC by visiting their website here http://www.americanenergycoalition.org/ You can also listen to the AEC radio ads by visiting their website here http://www.americanenergycoalition.com/radio/radio2012.php

Whatever the utilities throw at us, if we have the resources then we have access to the ad materials and advertising talent between AEC’s ad agency, PriMedia as well as our own ad experts at Woodbury & Morse.

Print

We also have made available dozens of bill stuffers, brochures and other consumer education printed materials. Since we began printing materials in 2004 on issues ranging from consumer advisories on energy conservation to contracts to controlling energy costs—CEMA has shipped more than 850,000 pieces to its members, free of charge. We paid for all these materials with NORA funds, back when we had NORA.

If we replace NORA with the CEMA Oilheat Alliance and your twenty points, we can add to that record and strengthen your communications with your customers. You can see all the materials we have available now in Member’s Only section of our website here http://icpa.org/protect/marketing.php.

Internet

The internet and social media is also a key component of what we need to become more involved with as an industry. This is especially true for our outreach to younger consumers comfortable with everything from ipads to smartphones. There are over 500 million Twitter users and over 955 million Facebook users! Moving our messaging from traditional media into the social media realm needs to be a part of how we communicate with consumers.

Our goal is raise at least $750,000 by this twenty points per gallon [.0020] assessment, which is the same amount of money CEMA had for consumer education projects when we had NORA money prior to 2010.

 

Now, the choice is yours and with your suppliers

We can replace NORA funds with the CEMA Oilheat Alliance and get back into the business of promoting and defending your business and your future...

-or-

We can let the state and the utilities take your customers and end your business.


FUELS COVERED BY THE CEMA OILHEAT ALLIANCE PROGRAM

These are exactly the same products covered by NORA, defined exactly thesame way NORA defined them.

Number One dyed distillate. This includes DOE reporting code 467 and Exstars reporting codes 231, 073,and 074. A light distillate fuel oil that has distillation temperatures of 400 degrees Fahrenheit at the 10 percentrecovery point and 550 degrees Fahrenheit at the 90 percent point and meets the specifications defined inASTM Specification D 396.

Number Two dyed diesel. This category includes DOE reporting codes 466, 467, 468 and 469 and Exstarsreporting codes 226 and 227 and FTA reporting code 228. A fuel that has distillation temperatures of 500 degreesFahrenheit at the 10 percent recovery point and 640 degrees Fahrenheit at the 90 percent recoverypoint and meets the specifications defined in the ASTM specification D 975. Sulfur level is not determinative.This product is indelibly dyed in accordance with regulations prescribed by the Secretary of the Treasury underSection 4082 (a) (2) of the Internal Revenue Code of 1986. Any biodiesel blended into this product isalso subject to the fee.

Number Two Fuel Oil. This includes DOE reporting codes 467 and 470 and FTA reporting code 152 and Exstarsreporting code 226. A distillate fuel oil that has a distillation temperature of 400 degrees Fahrenheit atthe 10 percent recovery point and 640 degrees Fahrenheit at the 90 percent recovery point and meets thespecifications defined in ASTM specification D 396. This product is indelibly dyed in accordance with regulationsprescribed by the Secretary of the Treasury under Section 4082 (a) (2) of the Internal Revenue Code of1986. Any biodiesel blended into this product is also subject to the fee.

Number Two dyed Low Sulfur Heating Oil. This includes FTA and Exstars reporting code 151. A fuel thathas distillation temperatures of 500 degrees Fahrenheit at the 10 percent recovery point and 640 degreesFahrenheit at the 90 percent recovery point and meets the specifications defined in ASTM specification D975. The sulfur level is below .05% by weight. This product is indelibly dyed in accordance with regulationsprescribed by the Secretary of the Treasury under Section 4082 (a) (2) of the Internal Revenue Code of 1986.Any biodiesel blended into this product is also subject to the fee.

Dyed Kerosene. This includes DOE reporting code 311 and Exstars reporting codes 231, 073 and 074 andFTA code 072. A light petroleum distillate having a maximum distillation temperature of 400 degrees Fahrenheitat the 10 percent recovery point, a final boiling point of 572 degrees Fahrenheit, and a minimum flashpoint of 100 degrees Fahrenheit. Included are No. 1-K and No. 2-K, and the two grades recognized by ASTMspecification D 3699, as well as all grades of kerosene called range or stove oil which have properties similarto No. 1 oil. This product is only subject to the fee when indelibly dyed in accordance with regulations prescribedby the Secretary of the Treasury under Section 4082 (a) (2) of the Internal Revenue Code of 1986.Any biodiesel blended into this product is also subject to the fee.


Retailer

I, the undersigned and named retailer, herewith grant permission for the named and signed wholesaler below, to collect twenty points [.0020] per gallon on all gallons covered by this agreement that I purchase from the wholesaler at all terminals, racks and other points and means of transference of products to me by the wholesaler in Connecticut, to be sent to the CEMA Oilheat Alliance for the purposes outlined herein.

*required field


10 Alcap Ridge, Cromwell, CT 06416  •  1-866-521-4272  •  gene@ctema.com