AG Propane Investigation Update: Schuette Secures $100k Relief for

Ferrellgas Customers, Goes to Court to Fight for AmeriGas Customers

Contact: Joy Yearout 517-373-8060


September 22, 2014
Lansing - Attorney General Bill Schuette today announced key developments in his ongoing
investigation into hundreds of consumer complaints related to propane pricing and delivery during the 2013-
2014 winter season. Under an assurance agreement secured with Ferrellgas, more than 600 propane
customers will receive a share of relief totaling more than $100,000.

In addition, today Schuette has filed a separate and independent class-action lawsuit in Berrien County
Circuit Court against another propane retailer, AmeriGas, to pursue monetary and injunctive relief on behalf
of that company's Michigan customers.

Michigans Consumer Protection Act offers important safeguards for Michigan families, and companies
doing business here have a duty to follow the law, said Schuette.

Ferrellgas Agreement

Through the agreement made public today, Ferrellgas agreed to resolve the Attorney Generals
investigation, which focused on pricing in late January and early February when rising propane costs
received widespread media attention. Examples of pricing issues and their resolution follow:
Will Call Propane Orders Some Ferrellgas Michigan residential customers who placed will call
for propane just before the spike in propane prices did not get their purchase price locked in by a
customer service representative, contrary to Ferrellgas policy at the time. After delivery, some of
these customers received a bill for an amount greater than what they should have been charged.
Resolution: The 280 affected customers will receive account credits for the difference between the price
that should have been secured for the customer at the time of the order and the final invoice price, plus
fifty percent. If the person is no longer a Ferrellgas customer, they will receive a credit to any remaining
balance on their account and receive a check in the mail from Ferrellgas for any remaining amount.
Affected Consumers:Affected customers placed telephone and Internet will-call orders with Ferrellgas
between January 12, 2014 and January 22, 2014 but did not receive deliveries until January 23, 2014 or
later.
High Propane Prices To resolve complaints related to high prices and the hardships faced by
many propane customers this past winter, Ferrellgas has agreed to give credits to 275 customers
billed above specified per-gallon price points in early 2014. Schuette notes these objective price
points are based on data compiled by the Michigan Public Service Commission as part of its
weekly survey of residential propane prices throughout the State.
Resolution: Affected consumers will receive billing credits equal to the amountabove specified per-gallon
price points, plus fifty percent. If the person is no longer a Ferrellgas customer, they will receive a credit to
any remaining balance on their account and receive a check in the mail from Ferrellgas for any remaining
amount.
Affected Consumers:Affected residential propane customers received a delivery at prices above the
specified per-gallon price points from January 24, 2014 through February 20, 2014.
Im pleased that we reached an agreement with Ferrellgas on behalf of Michigan consumers before the
upcoming heating season, said Schuette. Under this agreement, hundreds of Ferrellgas customers who
were harmed by pricing errors and the highest propane prices will receive a share of $100,000 in billing
credits by October 15th.
Additionally, 69 Ferrellgas customers with varied complaints will also each receive $100 bill credits (52 of
which did not receive any relief under other provisions of the agreement). All Ferrellgas customers
receiving relief under the agreement will be notified in writing by the Department of Attorney General.
Under the terms of the agreement, all credits and refunds must be delivered to consumers by October 15,
2014.
Schuettes Corporate Oversight Division will monitor Ferrellgas execution of the agreement to ensure
every citizen entitled to relief receives it.
AmeriGas Class-Action Lawsuit Alleges Price-Gouging, Consumer Protection Act Violations
Schuette also announced a development in his investigation of the propane retailer AmeriGas. Today
Schuette filed a class-action lawsuit against AmeriGas, alleging violations of multiple provisions of the
Michigan Consumer Protection Act. According to the complaint filed in Berrien County Circuit Court,
AmeriGas ignored systemic problems that resulted in many Michigan customers being treated unfairly,
including a statewide practice of charging grossly excessive prices last winter.
The complaint includes the following alleged violations:
Price Gouging: The complaint alleges that AmeriGas charged some of its customers grossly
excessive prices in two distinct ways. First, it charged residential customers prices that grossly
exceeded the prices being charged both by other propane retailers. Second, AmeriGas charged
certain customers grossly excessive prices compared to other similarly situated AmeriGas
customers.

Denial of Pricing Established in Advance Contracts: AmeriGas allegedly denied many
customers the benefit of guaranteed per-gallon prices that they had locked in for the winter.

Failure to honor prices quoted for telephone orders: The complaint alleges that consumers
bills did not reflect the prices that they were quoted when they placed an order by telephone.


The complaint also includes allegations that customers in Berrien County were disproportionally affected
by excessive prices. Information obtained by the Attorney General under subpoena as part of the recent
investigation revealed that there were twenty-five AmeriGas customers who were charged per-gallon
prices higher than $6.00 per gallon in January and February. Of these twenty-five, sixteen reside in
Berrien County and received deliveries from the AmeriGas location in South Bend, Indiana, where
AmeriGas says it takes a different approach to pricing. Despite this circumstance, Schuette alleges even
prices below $6.00 per gallon in late January were unlawful, citing various examples, including a
Marquette customer billed at $5.75 per gallon.
We are taking the fight to Court to get relief for AmeriGas customers, said Schuette. I am confident that
the action we are taking today will send the message to every propane retailer throughout our State that
we will not hesitate to do whatever it takes to protect propane consumers in the winter ahead.
AmeriGas is the largest provider of residential propane both in Michigan and in the United States.
According to the complaint, AmeriGas told the Attorney General during the investigation that it has more
than 200,000 residential customers in Michigan.
Background on Schuettes Propane Price Gouging Investigation
Schuettes investigation of the propane industry began after receiving multiple complaints from Michigan
consumers across the state. In March he issued subpoenas for Ferrellgas, Inc. regarding allegations of
excessive pricing and misrepresenting the price that consumers would have to pay for propane.
Schuettes second round of subpoenas came in May 2014 against AmeriGas for allegations of price
gouging. To date, Schuette has received more than 500 complaints against propane retailers involving
incidents last winter.
If consumers have additional evidence suggesting that any 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.
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[Attachments: Ferrellgas Assurance of Voluntary Compliance, AmeriGas Complaint]