Schuette Issues Second Round of Subpoenas in Probe of Propane IndustryContact: Joy Yearout 517-373-8060
May 15, 2014
LANSING – Michigan Attorney General Bill Schuette today announced that he has filed a petition for additional civil subpoenas in his ongoing investigation into excessively high prices and other questionable business practices related to record high propane costs imposed on Michigan families this winter.
"Let this send a clear message to energy suppliers that we will continue this review until we get homeowners the answers they deserve," said Schuette. "My job is to protect Michigan consumers—it's this simple: if we find that state law has been broken, we will take legal action."
AmeriGas is the nation's largest residential supplier of propane with service in all 50 states. Since early December, the Attorney General's office has received 44 individual complaints against AmeriGas from all over the state.
As noted in the Petition for Subpoenas filed on May 9, 2014 in Marquette County Circuit Court, the complaints include allegations of possible price gouging, failure to honor existing set-price contracts, and that AmeriGas quoted some customers one price on the phone and then those customers received delivery at a higher price.
Michigan Consumer Protection Act Prohibits Price Gouging
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." Evidence gathered to date suggests that while the statewide average retail price for propane went as high as $3.76 in early February, some AmeriGas customers were allegedly charged nearly $7.00 per gallon.
Additionally, the Consumer Protection Act prohibits other conduct that tends to mislead or deceive the consumer in relation to material aspects of the transaction in question. For example, the Consumer Protection Act prohibits discrepancies between verbal representations of the seller and the written agreement that covers the same transaction. In this regard, information gathered to date suggests that some AmeriGas consumers ordering propane over the phone may have been misled as to what the actual price of the propane would be once it was delivered.
The Petition for Subpoenas was filed in the Marquette County Circuit Court, which has ordered AmeriGas to provide documents and testimony in Attorney General Schuette's investigation into possible violations of Michigan's Consumer Protection Act.
Schuette's Propane Price Gouging Investigation
To date, Schuette has received more than 400 complaints against propane retailers involving incidents this past winter. Schuette's review of these consumer complaints remains ongoing.
In March 2014, Schuette issued subpoenas for Ferrellgas, Inc. regarding allegations of excessive pricing and misrepresenting the price that consumers would have to pay for propane. Schuette's investigation of Ferrellgas, including review of materials and information provided by the company in response to those subpoenas, continues.
If consumers have additional evidence suggesting that a retailer engaged in behavior that violates the Consumer Protection Act, they are encouraged to contact the Attorney General's Consumer Protection Division at 1-877-765-8388 or file an online complaint at www.michigan.gov/ag.