OVER a number of years, industry veterans Kinson Craft and Rob Stenger watched as the home heating market changed in central New Hampshire—and not for the better.
Intense market consolidation brought domination by out-of-state and international companies. As a result, customer satisfaction fell to an all-time low.
In an effort to counter the trend, Kraft and Stenger founded Simple Energy in 2006 in. They capitalized on an opportunity to launch a home heating provider that differentiates itself from the competition by catering to customers who sought the intimate knowledge, accessibility and reliability that smaller, locally owned companies typically provide.
“Customers universally want to do business with someone who is knowledgeable, who is friendly, and who understands that the consumer on the other end of the line has a fundamental need,” Stenger says. “Our company philosophy is that if we have the means to meet a customer’s need, we do so in the most simple way possible.”
Based in West Lebanon, New Hampshire, Simple Energy provides two home heating services essential to New Hampshire residents: fuel delivery and HVAC maintenance, design, and installation. As Simple Energy has grown, it has expanded its presence in the commercial/industrial sector. The company relies on a fleet of 18 light-duty vehicles to facilitate HVAC service requests, while 12 tankwagons deliver over 7 million gallons of liquid fuel products annually.
Operating efficiently and keeping things simple for customers is at the core of Simple Energy’s day-to-day operations. Maintaining this customer-centric level of service, however, was becoming increasingly challenging as delays in the fuel supply chain were jeopardizing the fuel oil and propane provider’s ability to efficiently service their 8,500 customers’ needs.
Prior to 2014, Simple Energy was leasing space at bulk-storage facilities where third-party contractors facilitated the inventory management for resupplying its fuel transport trucks and refueling its fleet. Unfortunately, delays in the supply stream were making it difficult for Simple Energy to effectively manage the market volatility. For Simple Energy, passing these delays on to customers was unilaterally unacceptable.
“Speed counts in our business, particularly in the four coldest months of the year,” Stenger says. “Our customers cannot afford to wait. So we cannot afford to wait at a terminal to reload or resupply our trucks.”
It became evident to Craft and Stenger that in order to eliminate these supply vulnerabilities, Simple Energy would have to take control of its own destiny. So in 2012, a new business plan emerged: Simple Energy would build its own bulk- and terminal fleet-fueling operation.
To ensure the process went smoothly, the home heating oil provider turned to longtime colleague and friend Brian Devereaux at John W Kennedy Company for consulting, planning and equipment sourcing. As a wholesale petroleum equipment supplier, John W Kennedy Company has been providing customer-focused equipment solutions to commercial and retail fueling applications since 1930. The company’s extensive experience with coordinating fuel site equipment needs was a key contributor to the success of the project.
While Craft and Stenger had more than 20 years of experience in the petroleum marketing business and were familiar with building and operating bulk plants, it was the first time they would be building one as their own general contractors. Devereaux proved to be an invaluable partner in the design and execution of the fuel site.
Together, the teams at Simple Energy and John W Kennedy Co collaborated to construct—entirely with in-house resources—a bulk storage area and a fleet-fueling terminal over the course of two years. Taking a page from Simple Energy’s own playbook, Devereaux guided Craft and Stenger towards fueling equipment that would be simple for the heating company to use. So when it came time to select the fuel management and loading equipment that would play a major role in the new operation, Devereaux recommended installing integrated fuel management and loading equipment from OPW.
“Part of the reason we went with OPW equipment was to ensure maximum compatibility and seamless integration,” Devereaux says. “I wanted to present Simple Energy with systems that were not only easy to install, but easy to use, day in and day out. With these integrated systems from OPW, Simple Energy would be able to control its fuel inventory in real time and streamline fueling operations overall.”
Simple Energy’s first priority with the new fuel site was to make the bulk storage facility operational in order to eliminate the company’s dependence on third-party bulk storage and inventory monitoring services. As such, the company designed the bulk fueling operation’s bottom-loading system to ensure that the transfer of fuel was quick and safe.
Devereaux recommended rack-monitoring equipment from Civacon, an OPW Engineered Systems brand dedicated to providing safe and efficient loading equipment for the demanding requirements of terminal loading applications across the world. Simple Energy chose Civacon’s Thermistor Only Rack Monitor, which ensures delivery trucks are properly grounded and monitored for overfilling.
“Because we manage a sizeable portfolio in not only real-time, but just in time, our ability to operate safely and to do so quickly, is really, really important,” Stenger says. The bottom-loading equipment we have from Civacon allows us to optimize our loading while ensuring the truck is safely grounded. It is also is very user-friendly and dependable.”
In fact, the rack monitor’s durability was put to the test within its first months of service. With one of the coldest winters on record in the area in 2014-2015, Simple Energy was prepared for the equipment to experience some service interruptions. But to Stenger’s delight, the Civacon rack monitoring system performed flawlessly.
“I cannot tell you how pleased we are with the performance of the equipment,” he says. “It did not fail a day, a second, a moment. It kept us in business, with product flowing, all winter long.”
In addition to an efficient and reliable on-loading operation, Simple Energy needed to be able to manage their fuel inventory with extraordinary agility to remain competitive. To ensure the system attained maximum efficiency, Devereaux recommended several integrated fuel control and monitoring solutions from OPW Fuel Management Systems, a subsidiary of OPW based in Hodgkins, Illinois.
The ability to monitor storage tanks—24 hours a day and seven days a week—was critical for Simple Energy. To achieve true 24-7 monitoring, the heating oil business selected a tank gauge that could be accessed remotely: the OPW SiteSentinel Integra 500 Console.
“I am probably the world’s biggest fan of the SiteSentinel Integra 500 because it gives us the ability to see our inventory levels at all times, in all tanks, in real time, 24-7,” Stenger says. “It is absolutely beautiful.”
In addition to its precision inventory data, the SiteSentinel Integra 500 Console provides Simple Energy with automatic, instant email notifications for potential environmental compliance issues, not only in the tanks but in dispenser pans, tank sumps, and intermediate sumps. The email alerts enable Simple Energy staff to quickly initiate corrective actions.
“We have all of the systems’ fail-safes and alarms programmed to be emailed out to our safety and compliance officer in addition to other key staff members,” Stenger says. “If something is wrong, we are notified and we can take immediate action.”
On the opposite side of the bulk storage area, Simple Energy constructed a fueling terminal that includes two dispensers. To optimize these dispensers, the company needed a way to control and monitor the fueling of its own fleet vehicles, 24 hours a day, seven days a week.
To make this happen, Simple Energy installed OPW Fuel Management Systems’ C/OPT Fuel Control System in conjunction with its FSC3000 Fuel Site Controller and Phoenix SQL Fuel Management Software. This setup allows Simple Energy to authorize transactions and automatically capture extensive fleet fueling data for maximum accountability.
Prior to the installation of the OPW tank gauge and fuel site controller, Simple Energy was relying on manual inventory forecasting and reconciliation procedures, which was another source of vulnerability for the heating company.
“We were relying on this archaic system of manually sticking a skid tank,” Stenger says. “You depend on somebody to remember to do it, and inevitably someone forgets, usually when you are busiest, and the error creates havoc when you need it the least. And after we’d stick the tank we’d go through a laborious process every day to figure out how much we were going to burn.”
Simple Energy is just beginning to explore the suite of automated reporting capabilities available in the OPW fuel management software, but looks forward to streamlining its reconciliation, inventory and compliance documentation.
“The first time the team at our corporate office polled the system for retail transactions and inventory data, they were delighted with how easy it is to do,” Stenger says.
The fuel management software has simplified Simple Energy’s compliance reporting, which previously required significant oversight.
“There’s a lengthy list of federal, state and local record-keeping requirements that we need to meet,” Stenger says. “With very little human intervention, all of those items are done for us automatically and as frequently as we want them to be.”
Fueling its own tankers and fleet vehicles in order to eliminate supply line problems was always Simple Energy’s primary objective. However, once the heating company got its new bulk storage and terminal up and running, a new revenue opportunity presented itself: marketing Simple Energy’s petroleum inventory to neighboring fleets through the C/OPT unattended cardlock system.
The fuel control system helped position Simple Energy to confidently manage the increased throughput that a petroleum reseller experiences. According to Stenger the new resale operation simply would not be possible without the C/OPT, which authorizes and accepts a wide variety of commercial fueling network cards. He estimates that Simple Energy will be re-selling one million gallons of diesel a year to fleets located in the same industrial complex as Simple Energy.
“A million gallons—even at a thin margin—makes a sizeable contribution to the carrying cost of the bulk fuel site,” he says.
Simple Energy’s new bulk storage facility and fueling terminal is just the beginning for the New England heating company. The monitoring and fueling equipment now in place will enable the company to integrate future fuel sites.
“John W. Kennedy Company helped us to build a fueling operation that not only resolved our immediate supply issues, but positioned Simple Energy for future growth,” Stenger says. “We are laying conduit now to add two additional dispensers and are in the process of acquiring additional property to build new facilities just like the one we just completed.”
About The Author: Jim Desautels is a Commercial District Manager for OPW Fuel Management Systems. He can be reached at (860) 402-9906 or [email protected]