Bulk LPG - Cheapest suppliers / supply route?

UKGasMan

JerryW wrote: »

You are very welcome to your opinion but in the absence of any actual data the points made by mcmullank above seem much more convincing. If I am paying to rent a tank it seems reasonable that I should have some say in who fills it and that if I am out of contract with the owner, they should not be able to enforce a monopoly supply situation.

Of course, as we know industry practices and consumers legal rights are often two quite different animals.. even if they can legally fill another company's tank, will they I wonder?

JerryW: You can exercise your right to switch if you are out of contract. You may even be able to negotiate with your current supplier without the need for a new supply agreement (although not all will).

Just on the tank rentals, I think it's important to note that rentals are on average £60 per year. A tank has a usable life of 20 years before the need for refurb or replacement, so 20 x 60 = £1,200.

Commercially, a tank + engineer + crane + salesperson + administration + keeping a 24 hour emergency line running + testing + callouts (if needed) + parts (if needed) = significantly more than £1,200 without any other add-ons. If a supplier did not subsidise the tank rentals with profit on the LPG (i.e. because anyone could fill it and the cheapest quote won every time) then nobody would install tanks. What kind of business plays a 20 year investment game and guarantees to make a loss in the process!? The reason that there is a 2 year contract (and then rolling thereafter) is because it is a depreciating asset that they are installing or purchasing, and in order to make that viable they need to guarantee that they will sell you some gas!

UKGasMan

JerryW wrote: »

Mr Gas Man, I am grateful for these insights into how the industry works, it is all very educational. I also think that most of what you say is either right or is standard industry practice, so may just as well be.

.. Please understand that I am not at all criticising you personally, when I say that the situation you describe is not a comfortable place for us gas users to inhabit. Nor do I really know what can be done about that, so far as improving the market is concerned.

Obviously a lot can be done by individuals within the existing framework. I am reasonably happy with my own situation, having now a contract with Woldlink/Flogas which is charging me c25p/l at present.

Various people on this thread have in the past suggested that it is fairly easy to buy your tank from the supplier and maintain it yourself .. I'm wondering if you have any comment to make on that? Obviously there are regulations to be adhered to, but it is hard to believe they can be all that onerous, given that Calor were happy to keep on filling the tank they rented to me, that the Avantigas engineer said was "The most non-compliant tank he had ever seen in thirty years in the industry."

You're very welcome. I don't want to be seen to be on the side of the supplier, I am just trying to be informative.

In answer to your question, no, in my experience it is not as easy as it should be to purchase the vessel. Maintaining is relatively straightforward though. Above ground tanks are easier than underground.

The problem for a lot of people will be siting. If you buy the tank, you will always have to ensure that it is sited to current UKLPG guidelines, otherwise you may find that a lot of companies won't fill it. Truthfully, own use tanks are not something that I encounter very often, but it may be worth calling suppliers and asking whether siting will be an issue on filling (not transferring). The answer may sway your decision if your tank is totally illegal!

Would you want to buy your tank if you could though? 25p is a fantastic price in the current climate, and it would be hard to get much lower than that as an own use customer.

JerryW

UKGasMan wrote: »

You're very welcome. I don't want to be seen to be on the side of the supplier, I am just trying to be informative.

.... <snipped lots of interesting stuff, see above..>

Would you want to buy your tank if you could though? 25p is a fantastic price in the current climate, and it would be hard to get much lower than that as an own use customer.

Well, once the Avanti man made that comment (and refused to take on the tank or fill it) I approached Calor in a determined mood and gave them a good earwigging. They accepted that they had a legal responsibility to make the tank compliant, and they undertook to do so. All I had to do was provide a concrete base, to a given spec., which I did (well, got a man to do!). They then replaced the tank with a "new" one and renewed all the pipework between there and the house, which turned out to be quite a major undertaking. Since they also matched the Shell/Avantigas price quote .. 20p/l less than I had been paying .. I am less of a critic of Calor than many here. They also supplied and fitted a new boiler and hot water system at what I thought a very reasonable price. All the Calor engineers I have dealt with over 20 years have been knowledgeable, friendly and competent. If *only* they would sort out their predatory and borderline legal pricing policies that cause so many here to complain about them, they could become a good company to deal with. But every two years you have to fight them..

I don't have a burning urge to buy my tank off Flogas, but I also don't like contracts that carry on being exclusive even after they have expired and appear to give no great responsibility to the tank owner. You and I both know that the annual visual inspection is a cursory glance from the tanker driver followed by a tick in the box. I was with Calor for 18 years and no proper review ever took place until I insisted.

As I said I am happy with where I am, but it has been a long and hard road to get here and not at all easy. Compared with other utilities it is a difficult industry. It should be no harder than say, oil.. in fact it should be easier; oil is nasty stuff to handle.

Thanks again for the info

LittleVermin

"grandfather rights" have been used for years by the industry to justify filling tanks that do NOT meet the current CoP (Codes of Practice - i.e. safety requirements). And the other side of the coin is that the user cannot switch supplier without expensive work being done....i.e. these "grandfather rights" are anti-competitive.

"grandfather rights" have just been mentioned as real by UKGasMan in post #2800 (thanks for contributing to the forum - very useful!)

UKGasMan wrote: »

<snip>

On another note, existing vessels have "grandfather rights", so no, the customer could not force the re-siting. If the codes of practice change then the existing supplier can keep the tank where it is. Some suppliers will move tanks FOC if the customer does the civil work though. On this one, I do agree with you - if it is unsafe then the tank should be moved. The fact that the safety standards have changed/tightened should not put the consumer at risk.
<snip>

Unfortunately back in 2011 some of us got so fed up with the stuff coming from the major suppliers about tanks that HateLPG wrote out a set of questions and sent it to HSE (Health & Safety Executive), telling HSE their answers would be posted in this forum.

You can follow the link to the original HateLPG's post (#844) but I have emboldened questions 3, 4 and 5 which deal with these so-called "grandfather rights".

HateLPG wrote: »

Following on from GrandadRob's tank-siting woes (http://forums.moneysavingexpert.com/showpost.php?p=41822044&postcount=783 and other posts) and the ensuing discussion, I thought that it might be of use to everyone on this forum to seek clarification directly from the HSE, rather than relying on "helpful conjecture". I sent them a fairly comprehensive set of questions, and they have now replied as follows (for the sake of clarifty, I have underlined and bolded the specific questions that I asked them, and indented the HSE comments and posted them in blue):

It may be useful to note that in most cases the LPG tank (& pipework up to and including the first regulator (valve)) is owned by the LPG supplier, however the pipework leaving the first regulator and travelling into the property is likely to be owned by the property owner. The exact demarcation of ownership will be listed within the contract with your LPG supplier.

1. What are the regulations relating to small-scale domestic bulk LPG installations and where can I find copies of these?

The Health & Safety Executive have not produced guidance on the siting of small-scale domestic bulk LPG installations as we do not enforce at domestic premises (except for work activities) , only commercial premises. However the guidance for siting a domestic bulk LPG tank is the same as for a commercial installation. UKLPG are a trade association who produce a series of 'codes of practice' for industry, which are recognised as good practice and all HSE and Local Authority inspectors use these when inspecting LPG installations (we do not produce our own guidance). These are priced publications and details can be obtained from UKLPGs website (www.uklpg.org).

Industry guidance recommends that a ‘separation distance’ around the LPG tank be maintained to reduce any impact of a tank fire on your property or thermal radiation from a perimeter fire adversely affecting the LPG tank. In most cases I have dealt with, the reason for LPG tanks not meeting current standards is related to the separation distance being breached. All weeds, long grass, shrubs, wooden structures, vehicles etc. (sources of ignition) must be removed from within the separation distance to avoid a fire hazard.

The separation distance is calculated on the total capacity of LPG your tank can hold. For example:

• A 0.25 tonne tank (or less) has a separation distance of 2.5m around the tank.

• 0.25 to 1.1 tonne tank has a separation distance of 3m around the tank.

2. Have the regulations substantively changed in the 20 years, and if so, when?

No, the LPG guidance supporting the regulations have not changed substantially in the last twenty years. If the siting of the tank does not meet the recognised industry guidance now then it is likely that one of two options has occurred. (i) there has been further development around the area of the tank since it was installed resulting in the separation distance around the tank being encroached upon or (ii) the tank did not meet the industry guidance at the time of its installation.

3. If there is a contract in place, and the vessel complied with regulations at the time the initial supply contract was signed, is there a waiver to permit continued supply?

No, this is not the case. There are options that you can consider to mitigate the effects of an LPG fire / leak which can reduce the size of the separation distance. Examples are installing a fire wall, erecting a vapour diversion wall etc. You should discuss your options with your LPG supplier.

4. If such a waiver exists, is it conferred upon the vessel or the contract holder?

No such waiver exists.

5. If it can be shown that the householder believes in good faith that the vessel is legally sited or was legally sited at the time any contract was signed, does the supplier then have full liability to ensure that the vessel is brought into line with those regulations if the vessel was not legally sited at the time they entered into a supply agreement? In respect of this, I note specifically in your information sheet, "Use of LPG in small bulk tanks" that it is stated that "The installer must ensure that LPG tanks are located in a safe place and have all the necessary safety devices to protect the tanks, pipework and any LPG appliances attached to them."

As explained previously, the LPG supplier in most cases owns the tank and should not deliver to an LPG tank that does not meet the standards laid out in the UKLPG code of practice 1 part 1. If your tank does not meet this guidance / standards then no suppliers should be delivering to it and you should talk to your current supplier to discuss options for upgrading it to meet the current guidance. It appears to me that other LPG suppliers may be reluctant to 'take on' a deficient tank that they will have to replace to meet the industry guidance.

You should note however that if the tank is re-sited, whilst the LPG supplier will be responsible for the cost of this, it is likely the owner of the pipework (ie. the property owner) who will have to pay for the pipework to be re-sited to connect to the new tank. Any new pipework that is laid should also meet current standards, which is the use of plastic (polyethylene) pipework rather than a metal pipe.

I should add, of course, that this is generic advice and each LPG installation may have it's own issues that require further consideration. In the first instance you should approach your supplier to discuss the specific intsllation in question.

Hopefully these answers will prove useful.

So HSE says "grandfather rights" do NOT exist.

I suggest if your tank causes problems you contact your supplier urgently. In fact I would go as far as actively seeing if your tank meets the CoP. ....and note the comment from HSE:

You should note however that if the tank is re-sited, whilst the LPG supplier will be responsible for the cost of this

Unfortunately the CoP are only available for sale from - you guessed it - UKLPG ..or maybe a friendly supplier will help. HateLPG and I went as far as buying a copy - only for a new edition to be published very soon afterwards! Various suppliers' websites used to have info and plans about tank siting but I have only been able to find this from LPG Direct (no mention of overhead cables, overhanging trees, flammable material, visibility for tanker driver, etc).
..

UKGasMan

LittleVermin wrote: »

So HSE says "grandfather rights" do NOT exist.
..

LittleVermin, I think this is one of the fundamental problems with the industry; lack of clarity for the end user. It's great to hear the reply from HSE and I think people will find their response useful.

Here is the exact wording from COP1, Part 1: 2009 and including amendment 2nd March 2013:

Quote:
1.3.2 New and Existing Premises
If compliant, the installation may be deemed to be satisfactory if, either:

a) the installation met the relevant requirements of the standards and guidance in force at the time of its installation and the installation does not present a safety risk; or
b) a risk assessment demonstrates that the installation does not present a safety risk.

Where a safety risk is identified the vessel will need to be re-sited or other equally effective measures adopted to ensure that the vessel can be used, filled or refilled without causing a danger to any person.

New installations and modifications to existing installations involving changes in layout or increased storage should comply with the advice in this guidance from the date of publication.

Note: The like for like exchange of installation components, such as pressure relief valves, regulators, etc. is not considered a modification.
(End quote)

Here is the bit of that that is key: "a) the installation met the relevant requirements of the standards and guidance in force at the time of its installation and the installation does not present a safety risk". Who decides that it is a safety risk? Does the fact that it does not comply with current guidance does not constitute a safety risk? Suppliers in most cases say "no".

I agreed with mcmullank that there seems to be a fundamental problem here. I used the phrase "grandfather rights" because there is no enforced legal requirement for the supplier to make changes of their own accord. If there were, the supplier would be forced to inspect every installation and bring it up to current standards, which, frankly, might be the right thing to occur but would never happen. The people that would pay for this work to be done would end up being the consumer. And even if you spoke to your supplier and told them that your site was unsafe, hypothetically they would only have to do check the date of installation and then do a cursory "risk assessment" and be on their way again. In a lot of cases it becomes a tick box exercise.

To me this is not right or fair, as it restricts the consumer's ability to switch. Worse still, even reputable suppliers do seem to be rogues when faced with this subject (albeit not all of the time, there are still one or two good ones out there, but not many).

Apologies for the long post, will attempt to condense in future.

mcmullank

UKGasMan wrote: »

Apologies for the delay in replying.

In every LPG contact I have ever seen (and I have probably seen 95% of all LPG supplier's contracts), the supplier expressly forbids the filling of their tank by anyone else, so as a starter, you are suggesting that people breach their contract, which could lead them to financial penalty or court (civil). Furthermore, LPG contracts continue to run after the exclusivity period, until the customer switches supplier or the tank is uplifted.

This conversation all started from someone moving into a new house. There is no contract in place, no LPG contract is binding on a third party.

UKGasMan wrote: »

You are correct about the words in PSSR, but the regulation goes beyond that phrase. A supplier must have a written scheme of examination, must test the vessel and keep certificates on both the testing and the tank itself. Anyone else filling it would have no documentation whatsoever (apart from the data plate), so would be to assuming that these things had been done, as they would never know for sure. So unless the current supplier provides this data to the new supplier before the transfer process takes place (which they don't), if something goes wrong then HSE will take a dim view. Prosecutions have occurred.

I am not really sure what you are trying to get across here. Are you claiming that one supplier can't fill a tank as your current supplier may not be maintaining it correctly? Anyone filling the tank needs to make sure that the tank is safe on every fill.

UKGasMan wrote: »

Apologies for the delay in replying.

Quote: "but quite simply you are wrong to state that it is illegal to fill an LPG tank that is owned by a third party." 1. It is illegal to exploit the assets of another company. 2. It is illegal to induce a breach of contract. As analogies are popular, it is just like me deciding to run a train on Network Rail's line without their consent.

This is fundamentally wrong. In the hypothetical situation where the house owner was able to self-fill the tank, it would not be against the law to do so. If appropriate, the tank owner could seek payment for the use of the tank or agree to remove it where agreement could not be reached. By the same token, a new property owner could impose rental charges on the LPG company should they not remove a tank within a reasonable time. All of these are commercial disputes not criminal.

Also your analogy doesn't work as the Railway lines are shared whereas the tank is not.

UKGasMan wrote: »

but I really do hope that in the not too distant future the market will become more accessible to entrants.

On this we agree completely. :T

UKGasMan

mcmullank - I don't particularly want to go around in circles but what you are suggesting people do is fundamentally wrong. Do you believe that just because the vessel is on the property it is free to use by anybody? And by that rationale, if there was a telephone cable going over your property, you can just connect straight into it? This is somebody's property. Use of it without permission is illegal, surely you realise that unauthorised use of somebody else's property/asset/possession is illegal?

And the Network Rail analogy is absolutely correct - the rail network infrastructure is is owned by Network Rail. To use it would require their permission.

I'm not sure we are getting very far here. I would just recommend that people go through the transfer process if they wish to switch supplier, and hopefully save a few quid in the process.

mcmullank

UKGasMan wrote: »

Use of it without permission is illegal, surely you realise that unauthorised use of somebody else's property/asset/possession is illegal?

OK this is my final post on the matter as I have already stated why there is no illegality. If your take the above at face value then as soon as a property is purchased, the owner should be able to charge the LPG company ground rent as the LPG Tank owner is using their property without permission?

Or do you think that this is a one-way deal?

The reality is that neither party can make demands on the other without providing reasonable notice.

JerryW

mcmullank wrote: »

....
The reality is that neither party can make demands on the other without providing reasonable notice.

No! The tank is indisputably the supplier's property, which the consumer rents; and to do this implies there must be a contract in place. If there isn't then indeed the supplier must remove the tank. (According to my Flogas contract, they will do so and charge me £225!) Assuming there is a contract in place, then everything, including your "reality" and what constitutes such things as reasonable notice becomes subject only to that and to the laws governing such contracts.

I am afraid mr Gas Man is quite right - you will never reach your desirable position of having a tank but no contract, unless you buy it for yourself. Even that you can only offer to do, not insist on doing. Supplier has no obligation to sell to you so far as I can see. If you buy a new house, this is a matter the respective solicitors will have to sort out prior to exchange of contracts. As purchaser, you must either agree to take on both the tank and the contract - and any residual gas - or not, in which case the tank will be removed under the terms of the contract the vendor signed. And you will have no heat.

I have copies of both Flogas and Calor Gas current contracts, having recently switched from one to the other. Both are long, complicated and densely worded forms. They are not friendly, equitable or easy to read. They are strangers to the Plain English Campaign.. unlike my electricity supplier, currently E.on. They are of course written by the supplier's legal team and carefully worded so as to protect the supplier at every turn whilst providing only basic legal protection for the consumer. I have mine here, and I can quote passages that would make your solicitor's hair curl. It is not, frankly, a document a seller that had my best interests at heart would ever produce. I would not normally sign such things and have not had to, as regards all the other utilities supplied to my property...

I have a suggestion: the first LPG supply company that produces a plain English contract that consumers like us can understand and accept as reasonable, and that can also charge reasonable prices and not predatory ones as Calor and Flogas indisputably do - that company could gain a great deal of business. It would try to be seen as even handed and trustworthy... folks would post here about how decent to deal with they were .. they could really clean up! People would flood to them, once they realised what a ride they had been taken for by the old-fashioned suppliers that took them for whatever they could and traded on their ignorance, as Calor did with me. Think what the impact on their competitors profits might be, as they struggle to explain why they have been charging so much over the odds for years.

In other words, any major player has it in their own hands to make this a more enlightened industry. No need to wait to be pushed into it, by legislation or government pressure.

I would like us to keep this at the level of a discussion if possible, and not get aeriated just because we don't agree. It is interesting.. I think Mr Gas Man has made his points, what is more. So long as there is a contract in force, we are bound by its terms and if you have a tank, either you have a contract, or you have bought the tank outright. Reasonable doesn't enter into it except as the contract may stipulate.

mcmullank

JerryW wrote: »

No! The tank is indisputably the supplier's property,.

Agreed.

JerryW wrote: »

which the consumer rents; and to do this implies there must be a contract in place...

and if you have a tank, either you have a contract, or you have bought the tank outright. Reasonable doesn't enter into it except as the contract may stipulate.

What a load of nonsense. I was in the position where I had a tank owned by Calor on my property for which I did not pay rent and did not have a contract. This isn't opinion, this is fact.

JerryW wrote: »

If you buy a new house, this is a matter the respective solicitors will have to sort out prior to exchange of contracts. As purchaser, you must either agree to take on both the tank and the contract - and any residual gas - or not, in which case the tank will be removed under the terms of the contract the vendor signed. And you will have no heat.

This is not only incorrect but completely misleading. At no point during a house purchase (certainly in Scotland) will the solicitor get involved in the LPG tank. Quite simply the seller's contract with the LPG supplier is not assignable.