For customers with an above ground propane tank, switching propane companies is usually easy and cost-free. But customers with an underground propane tank are in for more of a hassle.
These customers are almost ready to switch when they receive a letter from the propane company that says “You can switch, but it will cost you.”
The dollar signs in the letter make their eyeballs pop out of their head like a cartoon dog. At this point, they pick their jaw up off the floor and decide maybe it’s not worth the hassle or the cost to switch. They keep putting up with the service and high prices because it appears to be less money than switching.
If you have an underground propane tank and this sounds familiar to you, we’re here to tell you it doesn’t have to be that way.
Big box propane companies have a bad reputation for making changing propane companies a big and expensive hassle.
When you receive your “termination options” letter, it is easy to be overwhelmed by all of the fees and propane industry jargon: re-stock fees, the excavation fees , the liability waiver. What does it all mean? Why is it so difficult to switch?
The truth is, switching propane companies doesn’t have to be a scary or expensive hassle
Don’t be disheartened by all of the dollar signs. The fees outlined in your “termination options” letter aren’t so scary or meaningful once you know what they mean.
Let’s break down propane switching fees and how you can get around them.
What’s inside your termination letter and what it means
* Fees noted are examples of different industry fees we have seen. They do not reflect Kauffman Gas’ policies or prices.
Early Termination Fee ($150)
If you terminate your contract early, your propane company might charge you a fee to leave. This fee is standard in the propane industry (and many other industries). But being hit with a $150 bill for leaving certainly doesn’t make a strained relationship any better.
Can you get around an early termination fee? It depends.
Read the terms of your contract carefully. If your termination date is approaching, decide if it is worth it to stay for the remainder of your contract.
If you need to switch immediately, talk to the representatives. Tell them why you are leaving, why you are dissatisfied. Tell them why you think the early termination fee should be waived. Sometimes, the squeaky wheel gets the grease.
But oftentimes, the Early Termination Fee is a cost you will just have to absorb.
Tank Removal Fee ($900 removal fee + $1,000+ deposit + $60 dispatch fee)
When you see these fees pile up, you might second guess the benefits of switching at all. Maybe you think that putting up with the company’s dismal customer service is better than shelling out early $2,000.
We have good news: you might be able to get around this fee.
First, we should say these fees are standard. They cover the costs of excavation and labor for the propane company. However, these fees are also a barrier to keep you from leaving.
Depending on which propane company you are leaving, you might be able to get around this nearly $2,000 in charges. There are two common scenarios:
- Purchase the propane tank to avoid excavation: If the out-of-favor propane company gives you the offer to purchase your propane tank, you can purchase and resell the tank to your new propane company. This means that the tank doesn’t need to be excavated.
- Pay for excavation and lease a tank from new company: If the company refuses to sell you the tank, the tank will need to be excavated. But don’t panic. Before you schedule tank removal, explain the situation to your new company and see how they might be able to help.
Bottom line? Try to see if you can purchase your tank.
Pump-Out Fee & Restocking Fee ($150 + hourly rate)
“What?”, you might say. “You’re going to charge me to remove the propane I already paid for?”
Well, the law is that that your propane company can only move a propane tank if it is less than 5% full. So if your propane tank is 6% full, you have to pay to make it safe to remove.
Most companies will advise you to wait until you have less than 5% propane in your tank to initiate the change. This way, you won’t have to pay out of pocket.
Removal Damage Waiver
Attached to the letter you might also see a page of legal language titled something like “Removal and Damage Waiver”.
This standard legal language exempts the propane company from damage to your property upon removal of the tank.
This sounds scary because it talks about damage to your propane line, damage to your yard, etc.
Rest assured that this waiver is very common. A reputable propane company will be sure to remove the tank safely, in accordance with laws and local ordinances, and with respect to your property.
But you can put these worries to bed if you choose to purchase and resell your propane tank.
Option to Purchase Your Propane Tank ($800-1,000)
Some companies will refuse to sell the propane tank to you. This makes the process a little more cumbersome, but if you follow our advice above, the process should be smoother.
But, if you can purchase your underground propane tank from the company, you’re in good shape! We recommend purchase the tank, sell it to your new propane company, and then lease the tank from them.
Leasing a propane tank is preferable to many homeowners because the propane supplier is responsible for maintenance and liability.
If you purchase your propane tank from the propane company, you have 2 options:
- Continue to own your propane tank. This gives you leverage to purchase propane from any supplier that you choose. But it also makes the cost and maintenance of a propane tank your responsibility.
- Re-sell your propane tank to your new supplier. The new propane company will then be responsible for ongoing costs and maintenance. You will lease the tank from them.
Re-selling your propane tank and leasing it from the new supplier is our recommended option. Re-selling your tank might put you out of the money for a week or so, but it is a better alternative than buying and dealing with ongoing maintenance.
How much should switching actually cost you?
The bottom line is that it will cost a little to change propane companies. In our experience, the average cost our customers have had to pay to leave their old company is $800 to $1,500.
It should not cost thousands of dollars to get better service. Ask your new propane company for their advice on switching.
What about a delay in my service?
Same day installation is possible. A quality company will try their best to make it happen for you. Tell your new propane company your options for a dig out and see if they will be able to coordinate their schedule to be there same day.
Ask your new propane company about specials for new customers
Finally, when you are switching propane companies, ask with what the new propane company will offer you to make the transition smoother. Perhaps they will offer a free tank installation or first bill credit that will offset your costs.
Thinking about switching? Ask your new propane company these 10 questions.