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Notes from the President

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NOTES FROM THE PRESIDENT

Dear Customer,

Although most people are currently concerned with their air conditioning systems we are already looking ahead to the cold winter months. To help prepare you for the 2009-2010 winter season, we are outlining payment options and cost cutting tips to help alleviate many of your fears over heating your home.

Pre-Purchased Oil Plans

As you are all aware of the energy market has been extremely volatile in recent months and does not show any sign of stabilizing. Therefore we are presently offering the two purchasing plans outlined below:

Fixed Price Plan

As the name suggests, the Fixed Price Plan entails pre-purchasing oil now for the winter season at a set price. The oil will be delivered (with no additional charge) at the set price as needed between October 1, 2009 and March 31, 2010.

To calculate the estimated cost of the Fixed Price Plan multiply the cost of oil per gallon by the average amount of oil used during a season. For example: $3.10 per gallon x 800 gallons (average usage) = $2,480.00 for the 2009-2010 winter season.

CAP Price Plan

The second plan, the CAP Price Plan, is the same base price per gallon as the Fixed Price Plan but provides you with extra peace of mind. For a mere $0.50 per gallon, an insurance policy is offered to reimburse you if the Spot Market Price falls below the Fixed Price.

To calculate the estimated cost of the CAP Price Plan take the cost of oil per gallon, add $.50, and multiply by the average amount of oil used during a season. For example: $3.10 per gallon + $0.50 = $3.60 x 800 gallons (average usage) = $2,880.00 for the 2009-2010 winter season.

Choosing a Plan

Please contact us immediately at our office (617)484-7771 if you wish to choose either the Fixed Price Plan or the CAP Price Plan. Note: in order to purchase a contract and lock in a set price, we must purchase one contract at a time, which equals 42,000 gallons of oil. Therefore the price will not be finalized until the total purchase order is 42,000 gallons of oil or more. Once the price is finalized an invoice will be mailed to you, at which point a check for the total amount of oil purchased must then be received by us within ten days to secure your order.

Credit Terms & Budget Planning

Presently, the cost of the heating oil is at least twice the cost of last season. Wholesale suppliers have already notified us that credit terms this winter will be strictly enforced. Consequently, we also must strictly enforce credit terms.

Please note the following terms:

• All monthly charges must be paid in full by the tenth of the following month.

• Deliveries will be put on hold to customers that have no met the payment schedule.

• Partial payments on balances will not be acceptable - the full amount must be paid on time.

Please call our office to inquire about additional budget and payment plans that we have available.

Reducing Heating Costs

Finally, we suggest taking the following steps to ensure that you’re not throwing your hard earned money away needlessly.

Check the efficiency of you present heating system.

• Your heating system should be operating at 82% or more. If your system is over 15 years old it’s likely that it’s operating at less than 82% efficiency. Upgrading your aging system can save you hundreds of dollars yearly! Many times the yearly savings will allow you to fully pay for an efficient system upgrade in three or four years. We have low cost “Energy” financing available for updating your heating and cooling system.

Check your attic insulation.

• New Massachusetts building codes require that your roof insulation be at least 9” thick. New insulation can be installed in your home by yourself or by a contractor. Please call us for a list of contractors that we suggest working with.

Inspect your home for drafts and seal them.

• Many loose fitting doors and windows allow the cold air into your home and the warm air out.

Install programmable thermostats.

• Honeywell engineers estimate that there is a 10% savings on yearly heating costs by programming the heating to go down twice during the day.

Although the winter may seem far away, it is important to prepare ourselves now. Calculating possible heating costs, pre-buying oil at a fixed price, and making your home more energy efficient are all ways to plan for the upcoming winter months. Please do not hesitate to contact us in our office at (617) 484-7771 or by email at info@prendergastoil.com for further information. We look forward to working with you on all of your heating and budgetary needs.

Sincerely,

Tom Prendergast

President