Pennsylvania Petroleum Association opens expanded training facility, launching new teaching program next year

PPA member’s tour the association’s newly expanded training facilities. PHOTO/PROVIDED

The Pennsylvania Petroleum Association (PPA) finished expansions to its Pennsylvania Petroleum Association Technical Education Center (PPATEC), which it says will help it increase the number of qualified home and business heating and cooling service professionals in the area. 

The newly expanded training facility includes new classroom space, a 1,500-square-foot hands-on training lab and over 30 live-fire HVAC systems. 

“For over 35 years, PPA has offered technical training, serving thousands of trade professionals who honed their skills under expert instruction,” said Ted Harris, executive vice president at PPA. “The expanded PPATEC facility better positions the association to offer valuable, life-changing instruction to even more Pennsylvanians in the years to come.” 

The additional space allowed the association to expand its educational outreach to include a 10-week HVAC and Energy Professional Program approved as a private licensed school by the state Department of Education along with a new scholarship offering tuition assistance for individuals enrolled in the program. 

The training is set to begin next year and will offer training in oil heat, propane, gas, air conditioning and electrical systems. Graduates will receive NORA, CETP and EPA 608 certifications. 

Individuals that complete the program will have the opportunity to be hired by PPA and PPATEC member companies. PPATEC positions the association to serve the demanding job market of HVAC technicians, said Michael DeBerdine, CEO of Lancaster-based Rhoads Energy and PPA Propane committee chairman. 

“Today, about 40% of PPA members market propane products to thousands of homes. The PPATEC expansion includes training for propane-fired HVAC equipment and appliances, which will help us serve the growing market for propane,” DeBerdine said. 

For home heating companies, diversification and acquisitions provide reliable growth

Michael DeBerdine III, president and CEO of Lancaster-based Rhoads Energy, and Jennifer Goldbach, the company’s vice president of business development, stand in front of a company truck in 2018. The Lancaster home heating company had recently purchased assets from their former competitor, Worley & Obetz. PHOTO/ IOANNIS PASHAKIS


Growth among Pennsylvania’s home heating companies has been slow in recent years, fueled by conversions away from home heating oil to natural gas and other forms of electricity generation.

For businesses in petroleum and heating oil sales, the changing energy landscape has made it more important than ever to diversify their business with some companies offering additional energy services and others moving far out of the realm of home heating.

It has also meant that acquiring a smaller company has proven to be the best way to ensure fast, intentional growth, according to Steve Abbate, president of Kent, Connecticut-based Cetane Associates, a mergers and acquisition-based consulting firm specializing in the petroleum industry.

Cetane has worked on over 200 transactions in the heating oil and propane space across the North East, including for local companies such as Rhoads Energy in Lancaster.

“More people are looking for acquisitions. Even the smaller companies are calling us,” said Abbate. “We track our offers and we previously averaged 5.2 offers per company we list and we are now up to 5.8.”

Nearly four to five percent of oil heated homes convert to other heating sources annually according to Abbate. Despite those numbers, most acquisitions he has worked on are initiated through retiring owners, many of whom have kids that may not be interested in continuing the family business.

“You have the millennial generation who should be taking over for the baby boomers but they don’t want to do this,” said Abbate. “Hydrocarbons are an unfriendly word in the green community. It’s not …looked on [highly] by the next generation.”

Len Zvorsky, executive director of the York-based South Central Pennsylvania Energy Association, sold his wife’s family business, Newcomer Oil Corp., in the early 2000’s.

The younger generation being unwilling to take up the torch of their family’s home heating company is something that Zvorsky also saw in the M&A environment when he sold his company. However, some of his member organizations are run by leaders in their 40’s and have yet to run into that problem.

The right time to sell

Today, evaluations for home heating companies are up across the board, mostly due to low interest rates. Abbate added that buyers are also hungry for businesses to acquire thanks to the 2017 Tax Cuts and Jobs Act, which temporarily increased the bonus depreciation percentage from 50 to 100 for qualified property acquired between Sept. 27, 2017 and Sept. 28, 2023.

Until 2023, businesses that acquire a company can write off 100% of the assets, such as trucks and propane tanks, in the first year of operation.

“People are really looking for acquisitions to take advantage of that,” Abbate said.

Mergers and acquisitions differ for home heating companies compared to businesses in other industries because it isn’t worth it for a buyer to value a heating business by its revenue alone, said Abbate.

Because it is selling a commodity, a heating company may have its revenue down by 40% in one year but all of that loss could be contributed to changing prices of oil. For that reason it’s more beneficial for buyers to look at gross profit, infrastructure, trucks and offices.

“I don’t know all the commodities but it’s probably one of the most volatile in regards to its ups and downs,” Abbate said.

Not just oil tankers

Rhoads Energy, a full service home heating company offering HVAC, petroleum and heating oil, has had 18 acquisitions since 2003. The 100 year old company has acquired four companies in the last year and a half.

In the past decade, Rhoads expanded its offerings to include not only home heating oil delivery but also air conditioning and propane delivery services. While it is common for heating oil businesses to expand into services such as HVAC and propane, many of the small businesses acquired by Rhoads may only have had one or two product lines, said Michael DeBerdine, CEO of Rhoads.

“Maybe a business ran fine with the one product line but the next generation decides to ramp up their HVAC services and that’s a hard push now,” said DeBerdine. “We have worked for many years to build that year -round business model.”

Diversification is something you see more than you used to in the home heating industry, according to Abbate. While moves like adding petroleum and HVAC services are the most common, Abbate has seen some companies expand into totally different service lines such as pest control and landscaping.

“These companies show up at your house three times a year– there’s this portal into your home and smart companies have leveraged that relationship and diversified into other home products,” he said. “That is something we’ve seen over the last 10 years that has really strengthened the financial position of some companies.”

Maintaining that local relationship between a home heating company and its customers is crucial for business– so much so that Rhoads prides itself on maintaining its acquisitions’ legacy names long after the deal is finished.

E.G. Smith, Inc. in Berks County, Vincent R. Boltz in Lebanon and Atlas Oil Ltd in Pottstown are all examples of companies that Rhoads has purchased. Continuing to sell under those names can greatly impact a transition, particularly in the home heating industry, said DeBerdine.

“That regional feel definitely makes a transaction go smoother,” he said. “Our retention during an acquisition is much stronger than our competitors that switch overnight.”