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Gray, Gray & Gray 2020 Energy Industry Survey Results

Responses consistent with period of transition as heating season ends amid pandemic

Energy industry accounting and advisory firm Gray, Gray & Gray, LLP has released the results of its 2020 Energy Industry Survey. The survey, which has become a benchmark for fuel oil and propane marketers over the past 29 years, was distributed to retail fuel oil and propane dealers throughout the U.S. and collected data from April 2019 through March 2020.

“For nearly three decades our survey has set the standards against which energy marketers can measure their own performance,” said Marty Kirshner, CPA, MSA, director and chair of Gray, Gray & Gray’s Energy Practice Group. “The most important things a fuel oil or propane dealer can take away from the survey report is an understanding of where they stand, and a commitment to take steps to improve the areas in which they may be falling short.”

The 2020 Gray, Gray & Gray Energy Industry Survey was conducted at a time of transition, as the COVID-19 pandemic swept the country. “The data reflects the 12-month period leading up to the end of the heating season in March, just as the crisis was ramping up,” says Kirshner. “But the basis of the industry remains solidly rooted and the numbers paint an accurate portrait of the industry.”

For the second year in a row, Oil & Energy was the official Media Partner for the Energy Industry Survey. “With COVID-19 creating so much ambiguity for the present and future, actionable information and reliable data are now more critical than ever, and that’s exactly what the Energy Industry Survey provides,” says Oil & Energy Editor Samuel Diamond. “We are proud to once again partner with Gray, Gray & Gray for this important project.”

Some of the highlights from the results of the 2020 Energy Industry Survey include:

Hourly wages are up slightly across the board, a reflection of the tight labor market that existed before the COVID-19 pandemic struck
Fewer than 50 percent of respondents have cybersecurity insurance and have trained their employees how to detect data security breaches
The acquisition market still looks to be active with over 50 percent of respondents seeking to acquire a company
Hourly service rates have also risen sharply, up an average of 15 percent for heating systems and 22 percent for air conditioning

Complete Energy Industry Survey results, including a breakdown by company size, are available on Gray, Gray & Gray’s website at www.gggcpas.com, or by calling 781-407-0300.

In what region does your company primarily do business?
Midwest: 12%
Northeast: 74%
South:   5%
West:   7%
Multiple: 2%

Total number of employees: 52

Number of service technicians (full-time equivalent): 12

Number of delivery drivers (full-time equivalent): 13

What is the HOURLY rate you pay?
Delivery Drivers: $24.09 per hour
Dispatchers: $25.43 per hour
Customer Service Representatives: $20.02 per hour
Accounts Payable/Receivable Staff: $22.63 per hour
IT/HR Manager: $33.38 per hour
Service Technicians: $27.44 per hour
Service Manager: $39.40 per hour
Controller/Accounting Manager: $43.06 per hour
General Manager: $51.76 per hour
Operations Manager: $42.52 per hour
Office Manager: $30.79 per hour
Sales Manager: $40.31 per hour

How much do you pay a salesperson for a new account? $166.67

What are you doing to retain employees?
Raising wages: 80%
Converting hourly employees to salaried: 8%
Improving benefits: 50%
Paying bonuses: 73%
Deferred compensation plan: 13%
Other (i.e., profit sharing, 401(k) match, flexible schedule): 18%

If you lost customers last year, to what do you most attribute their leaving?
Lost to competitor with similar pricing: 4%
Lost to competitor with lower prices: 58%
Lost to gas conversion: 26%
Lost due to other reasons: 12%

When did you last install new fuel management software?
Within the last year: 14%
Less than 5 years ago: 19%
Less than 10 years ago: 31%
More than 10 years ago: 36%

How are you protecting your business against a cyberattack and data loss?
Encrypted cloud-based data storage: 49%
Anti-malware software/Endpoint protection: 76%
Secure data backup for disaster recovery & business continuity: 79%
Written information security plan (WISP): 16%
Staff training:   43%
Cybersecurity insurance: 44%
Other:   1%

Are you considering any of the following?
Acquiring a company: 51%
Selling your company: 15%
Transitioning to the next generation: 50%
Conducting a business valuation: 18%
Refinancing: 7%
Developing a new bulk plant: 28%
Upgrading a bulk plant: 28%
Converting to an S Corporation: 3%
Converting to flat rate billing: 13%
Retiring: 21%
Merging into a joint venture: 1%

What measures did your company have to take due to the COVID-19 crisis?
Reduced workforce through layoffs: 15%
Reduced workforce through furloughs: 19%
Reduced employee pay: 1%
Reduced employee hours:   23%
Reduced employee hours but maintained regular pay for employees in an effort to keep good workers and avoid recruiting/retention challenges: 47%
Revised company practices in accordance with social distancing such as sending one vs. multiple employees out together in a delivery truck: 76%
Offered incentives to existing customers: 6%
Offered incentives to new customers: 4%
Offered payment assistance via payment plans: 24%
Other (i.e., remote work): 15%

Do you blend biofuel?
Yes: 12%
Percentage blend: Avg. 13%
No: 88%

How many gallons did you sell during the heating season that just ended?
Fuel Oil - Residential: 2,803,771
Fuel Oil - Commercial: 569,537
Propane – Residential: 1,827,668
Propane – Commercial: 709,953
Kerosene: 87,484
Gasoline: 2,094,467
Diesel: 1,944,663
Other:   2,153,860

What percentage of your gallons sold are automatic versus will-call customers?
Automatic delivery: 63%
Will-call delivery: 37%

What was your average margin for sales during the heating season that just ended?
Fuel Oil - Residential: $0.92 per gallon
Fuel Oil - Commercial: $0.54 per gallon
Propane – Residential: $1.23 per gallon
Propane – Commercial: $0.63 per gallon
Kerosene: $0.81 per gallon
Gasoline: $0.31 per gallon
Diesel: $0.44 per gallon

What percentage of active customers use a budget plan? 22%

What percentage of active customers use a price protection plan? 28%

What is the average number of deliveries that your drivers made in the last 12 months? 3,489

What is the average renewal price you charge for a service contract (on heating equipment)? $288

How many PAID service contracts do you have? 1,963

What percentage of your service contracts are offered to customers…
at a discount? 10%
for free? 20%

What is the average hourly labor rate you charge for service?
Fuel Oil: $121.84 per hour
Propane: $109.35 per hour
Air Conditioning: $146.81 per hour
Plumbing: $161.00 per hour
Pipeline Gas: $147.91 per hour