More Subpoenas Expected in Probe of Business Practices Fueling Record Propane Costs

Michigan Attorney General Bill Schuette is seeking additional civil subpoenas in an ongoing investigation to determine if illegal business practices fueled record-high propane costs passed onto shivering Michiganders last winter.

Schuette’s office has received 44 complaints from residents since December complaining about what they called exorbitant prices charged by AmeriGas, which operates in 50 states and is the nation’s largest residential and supplier of propane.

In a petition for subpoenas filed last week in Marquette County Circuit Court, Schuette said complaints include allegations of possible price gouging and the company’s alleged failure to honor existing set-price contracts. Some residents allege that AmeriGas quoted them one price on the the phone, then charged a higher price at delivery.

The Michigan Consumer Protection Act prohibits price gouging, providing that a retailer may not charge a price that is "grossly in excess of the price at which similar property or services are sold."  

Schuette said in a statement that evidence gathered to date suggests that though the statewide average retail price for propane stabilized around $3.76 in early February, some AmeriGas customers were still being harged nearly $7 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, Schuette said  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,,” Schuette said in the statement.

The Marquette County Circuit Court has ordered AmeriGas to provide documents and testimony in investigation into possible violations of Michigan’s Consumer Protection Act.  

In March, Schuette issued subpoenas for Ferrellgas to gather evidence after several customers said the company had misrepresented the cost of propane. His office is reviewing the information provided by the company for possible Consumer Protection Act violations, according to the statement.

>> Read the petition for the subpoena.