Gulf Oil Planning Electric Marketing Via Cumberland Farms

Gulf Oil Limited Partnership, "plans to conduct solicitation for Connecticut customers by distributing information through retail locations of its affiliate Cumberland Farms, Inc.," it said in updating with PURA certain materials associated with its electric supplier license.

Cumberland Farms operates a network of 585 convenience stores across 11 states in the Northeast and Florida. Cumberland Farms describes itself as, "the largest convenience store and petroleum marketer in the Northeast."

As first reported by Matters (5/11), Gulf Oil has been conducting a Connecticut pilot as an electricity supplier, serving affiliated Cumberland Farms retail locations, a company oil terminal, and one residential customer (a Gulf employee) for about 10 months. Gulf Oil is also a licensed electric supplier in Massachusetts.

Gulf Oil had previously informed PURA that it would develop, "certain information and processes" concerning its business plan during the pilot programs and business development activity. "Gulf is hereby notifying DPUC of the completion of such activities and the updated information prepared by Gulf," Gulf Oil said in its filing with PURA.

"Currently, Gulf plans to conduct solicitation for Connecticut customers by distributing information through retail locations of its affiliate Cumberland Farms, Inc. ('Cumberland'), retail locations of licensed Gulf dealers, and by distribution of information by mail only through heating oil wholesalers. Additional channels will be developed in the course of business and will be subject to Gulf's standard policies, procedures, and oversight," Gulf Oil said in updating a prior interrogatory response concerning customer solicitation.

As noted in Gulf Oil's response, the statement reflects Gulf's current planning, and does not indicate that Gulf has commenced with this strategy, or that it will not be modified before being finalized and implemented.

"Gulf will not engage in door-to-door sales. Potential customers will be directed to GulfElectricity.com or to Gulf's toll-free number for signup directly with Gulf. No third party shall complete any sign-up transaction without involvement or confirmation directly with Gulf," Gulf added.

Gulf Oil also raised the amount of security provided to PURA to the standard $250,000. Suppliers may alternatively maintain security in an amount equal to 5% of annual estimated gross receipts, but in no event are suppliers required to post security exceeding $250,000. Given that most suppliers will not wish to devote capital to security unless needed, electing to post $250,000 in security is typically indicative that the supplier expects to serve a large enough amount of load that the 5% of its expected annual gross receipts would equal or exceed $250,000.