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Gray, Gray & Gray’s 2023 National Energy Survey Results Released


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Staffing remains a challenge despite rising salaries, but companies remain optimistic about their futures

Energy industry accounting and advisory firm Gray, Gray & Gray has released the results of the firm’s 32nd Annual Energy Industry Survey.

The survey serves as a benchmark for fuel oil and propane marketers throughout the U.S. The results are based on reported operational and financial data for the heating season stretching from April 2022 through March 2023, including additional research from Angus Energy, an industry leader in data analytics, along with guidance from the Propane Education & Research Council (PERC). (Survey responses with an * below denote data supplied by Angus Energy.)

“This year’s survey tackled some of the most immediate and pressing issues facing energy dealers,” says Marty Kirshner, CPA, MSA, the partner leading Gray, Gray & Gray’s Energy Practice Group. “Hiring, vehicle costs, rising operating expenses – all are common challenges faced by companies in the industry. Yet there remains significant optimism about being able to resolve these issues and remain viable in the years ahead.”

Some of the highlights from the results of the 2023 Energy Industry Survey include:

  • Companies are still having difficulty filling open jobs, with 63.74% reporting 1-5 vacant positions, 6.59% reporting 6-10 vacant positions, and 1.10% reporting 21 or more vacant positions.
  • Energy marketers expect the problem to continue, with 63.54% reporting 1-5 new positions to fill and 14.58% reporting 6-10 new jobs that they must hire for.
  • Payroll is up across the board, with 26.80% of dealers reporting payroll costs rising 8% or more, 18.56% reporting increases of 6-7%, 40.21% reporting increases of 4-5%, and 14.43% reporting increases of up to 3%.
  • Other big increases in expenses include vehicle expenses (34.02%), health care costs (25.77%), and liability insurance (20.62%).
  • The recent consolidation trend within the industry should continue, with 58.33% of dealers saying they are considering making an acquisition within the next 12 months, 11.11% saying they are considering selling their company, and 4.17% considering a merger.
  • The industry remains optimistic, with more than 75% of respondents reporting they are “highly confident” or “confident” about their ability to remain a viable energy provider.

Complete results of Gray, Gray & Gray’s 2023 Energy Industry Survey, including a breakdown by gallons, are available at www.gggllp.com or by calling (781) 407-0300.

 

Gray, Gray & Gray 2023 Energy Industry Survey – Overall Results

Number of states in which you do business?
1 State: 71.57%
2 States: 12.75%
3 States: 11.76%
4 States: 1.96%
5+ States: 1.96%

Total number of full-time equivalent Employees (FTE)

1-5 FTE: 10.00%
6-10 FTE: 9.00%
11-20 FTE: 27.00%
21+ FTE: 54.00%

Number of customers per Service Technician: 769

Number of vacant positions
1-5: 63.74%
6-10: 6.59%
11-20: 0.00%
21+: 1.10%
N/A: 28.57%

Number of new positions to fill in 2023
1-5: 63.54%
6-10: 14.58%
11-20: 1.04%
21+: 0.00%
N/A: 20.83%

Are your employees cross-trained as drivers and technicians?
Yes: 55.56%
No: 44.44%

What is the HOURLY rate you pay?
Controller: $52.77
Customer Service Rep.: $22.08
Delivery Drivers: $27.69
Dispatcher: $27.07
General Manager: $51.05
HR Professional: $39.62
IT Professional: $43.61
Salesperson: $38.30
Service Manager: $41.57
Service Tech. - Air Conditioning: $32.63
Service Tech. - Heating: $30.67

How much do you compensate a salesperson for bringing in a new equipment installation?
Commission percentage based on sale price
0-5%: 43.48%
6-8%: 30.43%
8-10%: 21.74%
10% or More: 4.35%

Commission percentage based on gross margin
0-5%: 20.00%
6-8%: 60.00%
8-10%: 20.00%
10% or More: 0.00%

How much has your payroll increased over the past year?
0-3%: 14.43%
4-5%: 40.21%
6-7%: 18.56%
8% or more: 26.80%

Outside of payroll what operating expenses have increased the most in the last 1-2 years and why?
Cybersecurity Insurance: 1.03%
Environmental: 2.06%
Health Insurance: 25.77%
Liability Insurance: 20.62%
Updating Software: 8.25%
Vehicle: 34.02%
Other: 8.25%

What was the biggest change you made to retain employees in the current year that you have not done previously?
1. Raises/wage & salary increases (inflation, mid-year, out-of-cycle, incentive-based)
2. Flexible work schedules (4 day work weeks, 40 hour work weeks, ability to leave early, reduced hours)
3. Additional PTO
4. Improved employee relations & training
5. Bonuses (sign-on, referral, etc.)

Are you aware of “golden handcuffs” key employee retention plans?
Yes: 41.84% No: 58.16%

Do you recruit from vocational or trade schools?
Yes: 64.29%
No: 35.71%

What percentage of the health insurance benefit is paid by the employer?
0-49%: 11.22%
50%: 15.31%
51-74%: 23.47%
75-99%: 20.41%
100%: 29.59%

If you lost customers last year, to what do you most attribute their leaving?
Lost to Competitor with Similar Pricing: 9.47%
Lost to Competitor with Lower Prices: 46.32%
Lost to Gas Conversion: 4.21%
Lost to Heat Pump Conversion: 25.26%
Lost Due to Other Reason: 14.74%

How long have your current customers been with your company
Less than 1 year: 9.11%
1-2 years: 8.07%
2-3 years: 7.06%
3-4 years: 6.46%
4-5 years: 6.40%
5+ years: 62.90%

How are you protecting your business against a cyberattack and data loss?
Encrypted cloud-based data storage: 59.18%
Anti-malware software/Endpoint protection: 70.41%
Secure data backup for disaster recovery & business continuity: 70.41%
Written information security plan (WISP): 17.35%
Staff training: 40.82%
Cybersecurity insurance: 43.88%
Not sure what I should be doing: 5.10%
Other: 7.14%

What products or services are you considering adding in 2023 that you previously weren’t offering?
Generators: 15.22%
Plumbing: 15.22%
HVAC: 6.52%
Propane: 8.70%
Fuel Oil: 0.00%
Electricity Conversion: 23.91%
Pest Control: 6.52%
Other: 23.91%

What is the most impactful business operations change you made in the last 12 months? (Top 4 responses)
1. Employee restructuring (adding new employees & positions, creating new departments, firing employees)
2. Business process improvements (speed up proposal process, online business, automatic credit card charges, switch payroll company, switch credit card processors, switch insurance providers, new employee policies)
3. Acquisition/Adding more fuel storage
4. Fee and price changes

Are you considering any of the following in the next 12 months?
Key employee plan: 23.61%
Merger: 4.17%
Acquisition: 58.33%
Sale: 11.11%
Upgrade Software: 33.33%
Other: 11.11%

Given environmental concerns and the political climate, how confident are you in your company’s ability to remain a viable energy provider?
Highly Confident: 32.65%
Confident: 42.86%
Somewhat Confident: 19.39%
Not Confident: 2.04%
Unsure: 3.06%

Have you implemented a succession plan or continuity plan for the next generation?
Yes: 46.88%
No: 53.13%

Have you developed a strategic business plan laying out what your company will look like 2-5 years from now?
Yes: 27.84%
No: 72.16%

If yes, what is the biggest change as a result? (Top 3 Responses)
1. Diversification/additional services (propane, HVAC, renewable energy, biofuel, heat pump installation)
2. Changing growth targets & investing to accommodate growth
3. Employee Retention & restructuring

How many gallons did you sell during the 12 months ended March 31, 2023?
Residential Fuel Oil Sales (000)
0-999 Gallons: 34.44%
1M-4,999 Gallons: 46.67%
5M-9,999 Gallons: 12.22%
10M-14,999 Gallons: 3.33%
15M or More Gallons: 3.33%

Commercial Fuel Oil Sales (000)
0-999 Gallons: 70.89%
1M-4,999 Gallons: 18.99%
5M-9,999 Gallons: 6.33%
10M-14,999 Gallons: 1.27%
15M or More Gallons: 2.53%

*What is your company’s average gallons delivered per stop?
Avg. fuel oil gallons delivered per stop: 201.52
Stops per hour: 2.42
Gallons per hour: 487.20

Do you blend biofuel?
Yes: 27.84%
No: 72.16%

If yes, what percentage blend of biofuel?
0-10%: 38.46%
11-20%: 30.77%
21-30%: 19.23%
31% or more: 11.54%

What was your average margin for sales during the heating season just ended?
Residential Fuel Oil: $0.98
Commercial Fuel Oil: $0.69

What percentage of active customers are on a budget plan?
0-20%: 56.18%
21-40%: 30.34%
41-60%: 11.24%
61% or more: 0.00%
N/A: 2.25%

What percentage of active customers use a price protection plan?
0-20%: 45.56%
21-40%: 27.78%
41-60%: 8.89%
61% or more: 2.22%
N/A: 15.56%

Do you offer tank monitoring?
Yes: 36.36%
If yes, what is the average annual fee? $26.53
No: 63.64%

What is the average renewal price you charge for a service contract on heating equipment?
$100-$200: 8.77%
$201-$250: 12.28%
$251-$300: 40.35%
$301-$400: 35.09%
$401+: 3.51%

*Average number of services calls per customer: 0.74

What is the average hourly labor rate you charge for service?

Fuel Oil Hourly Service Rates
$75-$125: 45.00%
$126-$200: 43.75%
$201-$250: 8.75%
$251+: 2.50%

Air Conditioning Hourly Service Rates
$75-$125: 24.56%
$126-$200: 57.89%
$201-$250: 15.79%
$251+: 1.75%

Plumbing Hourly Service Rates
$75-$125: 29.63%
$126-$200: 44.44%
$201-$250: 22.22%
$251+: 3.70%

Pipeline Gas Hourly Service Rate
$75-$125: 37.50%
$126-$200: 37.50%
$201-$250: 18.75%
$251+: 6.25%

Other Hourly Service Rate
$75-$125: 28.57%
$126-$200: 42.86%
$201-$250: 28.57%
$251+: 0.00%

Buying Vehicles Lead Time (months)
0-6: 30.23%
7-12: 38.37%
More than 12: 31.40%

Repairing Vehicles Lead Time (months)
0-6: 86.25%
7-12: 13.75%
More than 12: 0.00%

* Indicates data supplied by Angus Energy, Inc.

Business Management
Gray, Gray & Gray
September 2023
Energy Industry Survey

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