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Frequently Asked Questions About CECI Do you have full service contracts? Do you deal with reputable, established firms? How long has CECI been in business? What makes your business unique? What changes in your business have you seen over the years? What trends do you see in the future for your business? How did CECI recognize the need for an organization such as this? Who are your customers? What makes you different from your competitors? Why doesn't CECI offer price lock-ins or caps? Do you have full service contracts? Yes, we offer full service contracts to all members. The contract price is charged to the member’s account and includes an annual burner cleaning. Do you deal with reputable, established firms? All of our dealers are established delivery and service organizations. Prior to contracting with individual dealers, we research their previous experience, including service history. Dealers are started with minimal accounts and closely monitored by our office for at least the first year. How long has CECI been in business? CECI was organized in 1981 as an outgrowth of the Pace University Academic Federal Credit Union (AFCU). Since its establishment, it has continued to enroll other sponsoring organizations and individuals, and now has approximately 2000 members. What makes your business unique? CECI is organized as a buyer’s cooperative, meaning the organization is controlled by members who elect a representative board of directors, and who in turn employ professional full-time management. Like other businesses, yearly membership meetings are held, and members are presented information on the status of the cooperative, upcoming issues, and board member elections. What changes in your business have you seen over the years? The cooperative has survived the scarce oil/high cost situations in the early 1980’s, the advent of discount/no service oil suppliers, fixed price strategies by retail oil companies, and more recently, the volatility of the international oil market. We believe our organization has the flexibility to successfully address the oil market situation in the coming years. What trends do you see in the future for your business? Inevitably, as non-OPEC oil reserves decline, and the possibility of upheaval in the more volatile OPEC suppliers, the price will rise. When the cooperative was formed in 1981, a similar supply squeeze occurred and in fact was a driving force for our initial success. How did CECI recognize the need for an organization such as this? The directors of the AFCU wanted to expand their member benefits and saw that, if independent, their service could be provided to organizations and individuals who are not credit union members. Also, at that time the price of oil was about $1.50 per gallon in 1981 dollars. Who are your customers? Members consist of individuals who independently join; individuals who are sponsored by another member, a civic, religious, trade or credit union, or other types of organizations, and sponsoring organizations themselves if they require heating oil for their facility. What makes you different from your competitors? Our business model is unique in that we represent a group of oil users. Our competition comes from two major types of oil companies: discount suppliers that supply oil with minimal or no service, and full service oil companies that provide retail oil. Why doesn't CECI offer price lock-ins or caps? 1. CECI offers all its members exactly the same pricing regardless of the oil dealer assigned to the member. Only some of our dealers offer a lock-in option. CECI does not offer to some members an option that is not available to every member. A lock-in pricing option would increase our operating costs, and that additional operating cost would be, in effect, shared by all members. 2. If CECI were to enter the oil futures markets, we would be incurring additional costs that would have to be born by members on some pro-rated basis. We have elected not to incur this additional expense and risk in order to keep our pricing as low as possible. In addition, if we purchased futures, CECI would be responsible for equitably distributing the oil to its dealers. To load their trucks, our dealers have agreements with several different terminals in the area that is convenient for them. It would be an additional transportation cost to the membership to pay for rerouting oil pickups. There is no financial cushion. Actual costs are borne by the members. For further information about lock-in pricing, click here. |
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©2010 Consumers Energy Cooperative, Inc. 358 Saw Mill River Road, Millwood, New York 10546-1046 914-941-2288 www.CECIoil.com |
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