Nessel says energy providers must keep prices affordable

As Michiganders endure extremely cold temperatures, Michigan Attorney General Dana Nessel and the Michigan Agency for Energy on Wednesday asked resident to report propane price gouging during the state of emergency to help protect the state’s most vulnerable from those who seek to take advantage of the weather-related emergencies by increasing rates.

“Michigan energy providers should heed this warning: Those who take advantage of consumers will be held accountable,” Attorney General Nessel said. “A state of emergency does not make it open season on Michigan’s most vulnerable residents.”

An estimated 320,000 Michigan households use propane as their primary heating fuel. And although propane prices are not regulated, the state actively monitors the market to identify irregularities that may result in supply or price disruptions.

Under the Michigan Consumer Protection Act, a retailer may not charge a price that is “grossly in excess of the price at which similar property or services are sold.”

After the 2013-2014 winter season the Department of Attorney General launched two investigations into grossly excessive propane pricing after receiving hundreds of complaints during the polar vortex and subsequent state of emergency declaration. The department investigated two of the nation’s largest propane companies: Ferrellgas and AmeriGas. The Ferrellgas investigation resulted in an immediate assurance agreement that brought roughly $100,000 in reimbursements to Michigan consumers while the AmeriGas investigation resulted in a lawsuit that was ultimately settled in an agreement that brought more than $500,000 in credits or reimbursements to consumers.

Anti-trust laws also prohibit fuel providers from entering into agreements to arbitrarily fix prices in unison.

Michigan Department of Attorney General takes complaints about alleged unlawful rate fixing and grossly excessive price increases directly into its Consumer Protection Division. The office investigates any time there is evidence that state law has been violated.

“The Michigan Agency for Energy monitors supplies of propane and other fuels throughout the year and works with stakeholders to assure energy security for all Michiganders,” said Madhu Anderson, deputy director of the Michigan Agency for Energy. “We urge residents to work with their supplier so they have adequate propane to get through this arctic blast and check www.michigan.gov/propane regularly to track statewide average prices.”

Currently, the reported statewide average for propane is approximately $2.03 per gallon. Consumers who have guaranteed price contracts with propane suppliers may be subject to higher market prices once they’ve used the guaranteed amount covered by their contract.

If consumers believe they have become a victim of retailers engaging in behavior that violates the Consumer Protection Act, they are encouraged to file a complaint at Michigan.gov/agcomplaints or call 1-877-765-8388. The Michigan Agency for Energy has additional resources and energy saving tips for those who heat their homes with propane at Michigan.gov/propane.