WORCESTER – The Better Business Bureau has revoked the credentials of Peterson Oil and another company it runs, Cleghorn Oil, citing recent allegations of improper fuel deliveries that the company settled in court.
The Worcester-based oil company recently agreed to pay $ 450,000 to settle civil claims by Attorney General Maura T. Healey that it sold the state’s oil with levels of biodiesel above contracts.
Healey alleged – as did residential customers in a lawsuit in Worcester Superior Court – that the higher levels of biodiesel caused damage to heating equipment.
The Better Business Bureau action took place on Wednesday
In an interview Thursday, Peterson Oil chairman Howard W. Peterson Jr. denied that the fuel, called bioheat, caused the problems, and said he planned to ask the Better Business Bureau to reconsider its decision.
“We have resumed the use of renewable biodiesel. We think it’s better for the environment, ”he said, adding that his maintenance records show the same levels of service for customers using bioheat as traditional fuel oil.
Torre Mastroianni, a former Peterson customer from Worcester, told T&G he believed the oil had damaged his equipment and was not satisfied with the customer service the company provided.
“It’s not just what they do,” he said, adding that he had to pay another company to repair the damage a technician told him was caused by the bio-fuel. thermal.
Court records show that two former Peterson clients have filed a class action lawsuit against the company over similar allegations since 2019.
In the lawsuit, lawyers for the clients allege that Peterson committed fraud by failing to tell clients that they were receiving oil with much higher concentrations of biodiesel than those recommended by regulators.
The lawsuit alleges that Peterson made a profit by using more biodiesel than conventional petroleum in its product, alleging that it has a facility in which it produces its own biodiesel.
Peterson declined to comment on the ongoing lawsuit, but told T&G that profit was not the reason for his use of biodiesel.
He admitted to investing in his own biofuel manufacturing plant in New Hampshire, White Mountain Biodiesel, which he bought several years ago.
Peterson Oil’s website says the company receives biodiesel from “our local refineries,” listing White Mountain and another refinery in Rhode Island.
The White Mountain website does not mention Peterson; he said it was because it had not been updated after its purchase.
Peterson told T&G he has long been a supporter of increasing the use of biodiesel in heating oil to help save the environment.
It’s a topic he’s commented on over the years in the T&G, including in 2012 when he started using biodiesel as fuel in his trucks, and in 2015 when he told the newspaper that ‘he used blends of up to 20% biodiesel.
The lawsuit notes that federal regulators have found that 20% blends may not be suitable in very cold weather.
He alleges that both complainants had equipment down after receiving the oil from Peterson. Testing of a sample purchased by WBZ-TV, which reported on the situation in 2019, found biodiesel levels of 80%.
One of the plaintiffs, Nancy Carrigan, alleged in the lawsuit that she had to pay $ 3,000 to replace her oil tank after Peterson’s oil mixture corrupted it.
Lawyers alleged that the company that replaced the tank discovered that the tank’s top valve was coated with chicken fat.
Peterson said T&G cooking grease was used in biological heat, but denied that the fuel it delivered was harder on heating equipment than conventional oil.
Healey, in his press release, said that several state entities that purchased oil from Peterson “had encountered performance issues” due to the high biodiesel content.
“Cities and towns relied on Peterson Oil to provide heating fuel according to its contract so they could stay warm, but instead received non-compliant fuel which caused problems for many heating systems,” he said. she declared.
The legal deal Healey and Peterson reached in court contains less direct language, saying the performance problems “can” be attributed to higher amounts of biodiesel.
The deal is called an “abandonment insurance” – meaning that the attorney general agreed to end his investigation in return for payment. Peterson did not admit to any wrongdoing.
The $ 450,000 Peterson agreed to pay the state will not flow to consumers, Healey’s office confirmed, as it is intended to address the state’s contractual issues.
The bureau confirmed that it has received nine consumer complaints since March 2019, saying it has negotiated a large number of them and obtained refunds or repairs.
He also noted that separate civil lawsuits from clients will be a potential means of recovery.
The lawsuit alleges that the company’s customers’ own materials, updated after the WBZ story in 2019, note that equipment adjustments may be required if a switch between cleanheat and oil occurs.
A former Cleghorn Oil by Peterson technician filed an affidavit in Worcester Superior Court alleging he had to make frequent service calls due to problems caused by the biofuel mixture.
Technician Dana Fields said customers were not properly informed that they were receiving the mixture. He said he quit in 2018 after being “tired of lying” to customers about business practices he didn’t believe was correct.
Fields said he didn’t have the same issues when he worked for Cleghorn Oil before Peterson bought it.
Fields alleged that he was offered a 20% raise, which he rejected, before resigning.
The lawsuit alleges that several technicians told the plaintiffs that many customers had problems with the fuel equipment. The lawsuit alleges that there could be several thousand consumers who could qualify as plaintiffs if a class were certified by a judge.
One of the lawyers representing the plaintiffs, Jeffrey S. Strom, declined to comment on the lawsuit.
Peterson told T&G he pioneered the use of biodiesel with good intentions. He said he believed mandatory higher concentrations of biodiesel would arrive in the industry.
Lawmakers in other states are seeking to impose increases in the percentage of biodiesel in heating fuel, he noted, including pushing to require 50% blending by 2030 in Rhode Island.
Peterson said his use of biofuel has paid off in some years, but not in others. He said the government credits he could sell for fuel use fluctuated.
“I have decided that climate change is real and I believe there is a solution,” he said. “I would like to leave a cleaner environment.
“I would like to say that when I am dead someone will say, ‘We are better because I was here.'”
Contact Brad Petrishen at [email protected] Follow him on Twitter @BPetrishenTG