June 23, 2018
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Bangor hopes to lock in lower heating costs

By Eric Russell, BDN Staff

BANGOR, Maine — The city’s finance director was asked this week to begin negotiating a fixed price for Bangor’s heating fuel contract for the 2010 fiscal year, a number that is expected to be considerably lower than the current fixed price.

Since the 2009 fiscal year began July 1, the city has been paying $3.21 per gallon for fuel and an estimated annual consumption of more than 400,000 gallons.

That price is lower than it could have been because Bangor locked in at a time immediately before heating oil prices skyrocketed to their highest points, Debbie Cyr, the city’s finance director, said.

This year, the fixed price could be up to $1 per gallon lower.

“We act just like most residential homeowners when deciding whether to lock in; we’re just on a bigger scale,” Cyr said this week. “It doesn’t mean that we will definitely lock in, but certainly the pricing is attractive now.”

Cyr still needs final approval from the City Council next Monday before she begins the process.

In the past, the city has contracted with Irving Oil Co. for its No. 2 heating oil, which supplies heat to all city buildings, including schools and Bangor International Airport. Cyr said Irving has always been good to work with, but that doesn’t mean that it will automatically get this year’s contract.

“We’ll start getting quotes from suppliers and go from there,” she said, adding that there is no real time deadline. “The price changes minute by minute, so we’ll likely go with the best deal at that given time.”

Cyr also said the city is expected to consume far less fuel in the next fiscal year, since a number of efficiency upgrades have been made to city buildings. City schools, for instance, have switched from oil-burning boilers to natural gas.

Speculating over the price of fuel is not fun, Bangor’s finance director admitted. When the 2010 fiscal year budget process began last year, the city initially plugged in an estimate of $4 per gallon because that was the going price early last fall.

That estimate will obviously be adjusted but Cyr said the situation is emblematic of a volatile industry. In that sense, She said locking in to a fixed price is much more advantageous than paying as you go, even if you end up spending a little more.

“If we can put a set number into our budget, at least we know what we’re up against,” she said.

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