LANSING, Mich. — Michigan Attorney General (AG) Bill Schuette has reached an agreement with propane supplier Ferrellgas to credit customers more than $100,000 over pricing issues from last winter.
"I’m pleased that we reached an agreement with Ferrellgas on behalf of Michigan consumers before the upcoming heating season," Schuette said in a statement dated Sept. 22. "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 15."
According to the AG’s office, some Ferrellgas residential customers who placed a will-call order for propane just before the spike in prices did not get their purchase price locked in by a customer service representative, contrary to the company’s policy at the time. After delivery, some of these customers received a bill for an amount greater than what they should have been charged.
Under the agreement, 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 50 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. The customers placed telephone and Internet will-call orders with Ferrellgas between Jan. 12-22, 2014.
With regard to complaints related to high prices and customers’ hardships last winter over fuel prices, Ferrellgas has agreed to give credits to 275 customers billed above specified per-gallon price points in early 2014, the AG’s office said. Affected customers will receive billing credits equal to the amount above specified per-gallon price points, plus 50 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 the company for any remaining amount.
Affected consumers received delivery at prices above the specified per-gallon price points from Jan. 24, 2014, through Feb. 20, 2014. An additional 69 Ferrellgas customers with various complaints will also receive $100 bill credits. 52 of these customers did not receive any relief under the other provisions of the agreement. All customers receiving credits will be notified in writing by the AG’s office. Under the agreement, all credits and refunds must be delivered to consumers by Oct. 15, 2014. The AG’s office says it will monitor the situation to make sure the terms of the agreement are honored.
Ferrellgas’ version of what happened is considerably different from the AG’s, but the company acknowledges that some mistakes were made. A company spokesman, Scott Brockelmeyer, issued a statement last week.
"Ferrellgas is pleased to announce a resolution of the Michigan Attorney General’s inquiry into the supply shortage and price increase that affected the propane industry and Michigan consumers this past winter," Brockelmeyer said. "Due to circumstances beyond our control, including increased demand, increased product exports, pipeline disruptions and severe winter temperatures, the wholesale price of propane reached historic highs in late January. In recognition of the hardships faced by propane consumers this past winter, Ferrellgas has agreed to credit a limited number of customers who were most severely impacted by the dramatic increases in wholesale prices.
"Ferrellgas employees throughout Michigan worked long hours and expended great effort to service our customers during the supply shortage and adverse winter conditions, and we join our customers in appreciating their efforts. Due to wildly fluctuating wholesale costs, a limited number of customers were incorrectly billed, and Ferrellgas managers immediately started reaching out to affected customers to resolve those issues before the Attorney General inquiry. We have provided documentation to the Attorney General’s office of those corrections. We are pleased to announce that the vast majority of credits have already been issued to affected customers.
"Due to changes in the supply infrastructure, we have brought in an independent expert at our expense to discuss with the Attorney General the causes and origins of this winter’s wholesale supply crisis and most importantly how to manage future supply disruptions. We will continue to work with the Attorney General and other state and local officials to help ensure that the state of Michigan is prepared in the event these unfortunate circumstances occur in the future."
