March 4, 2008

            LANSING - Michigan Attorney General Mike Cox announced today that he is taking legal action under Michigan's Consumer Protection Act against Inergy Propane for its excessive pricing of propane gas. The action is being taken after numerous complaints from consumers alleging Inergy Propane charged excessively high prices compared to the average market price of propane in Michigan. Inergy Propane has a number of retail facilities in Michigan, which operate under "regional brand names," including Blue Flame Gas, Gaylord Gas, Lagasco Propane, McBride Oil & Propane, Northwest Propane, Northwest Energy, Petoskey Propane and Progas Propane.

            The legal action is in the form of a Notice of Intended Action (NIA), the first necessary step before a company can be sued by the Attorney General under the Consumer Protection Act. The NIA alleges Inergy Propane violated Michigan's Consumer Protection Act by charging prices grossly in excess of the market price. Inergy Propane has ten days to cease violations of the Act, or be sued. If Inergy Propane complies with Michigan law, the Attorney General will take that compliance into consideration when determining whether to take further action.

            According to the Michigan Public Service Commission, the average residential price per gallon for propane in Michigan from December 3, 2007 to February 19, 2008, ranged from $2.33 to $2.45. Some Michigan consumers reported that Inergy propane suppliers charged them as much as $4.39 per gallon for propane gas. When consumers complained to Inergy about the excessive costs, they were informed that they could either pay the excessive prices or pay an undisclosed amount to have their propane tank pumped out and removed. These removal fees were not included in many customers' contracts with Inergy.

            "Residential consumers of Inergy-supplied propane gas are having to spend more to heat their homes this winter because of these excessively high prices," Cox stated. "If a consumer has a 500-gallon propane tank, and is being charged even $1 over the market price to fill the tank, the consumer is being overcharged by $500. That is unacceptable."

            Although customers must be supplied propane from the same dealer that leases them their propane tank; many consumers are unaware that they can switch suppliers by having the supplier remove the existing propane tank. There may be a charge for this tank removal, but often it will be less than the cost of the overpriced propane.

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