Your Legal Rights: Consumer tips on propane gas costs
From the Office of Minnesota Attorney General Lori Swanson
Many Minnesotans – especially those in rural Minnesota – rely on propane gas to heat their homes or for cooking. Consumers are sometimes surprised to learn that the delivery and pricing of propane gas is not regulated like other utilities in the state. With Minnesota’s cold weather season fast approaching and consumers facing one of the tightest economies since the Great Depression, many people are struggling to manage their budgets and pay for basic costs like home heating fuel. This month the Minnesota Attorney General’s Office filed a lawsuit against Ferrellgas – a large national propane energy company – alleging that it deceived its customers in the prices and fees that it charged for home heating propane. The lawsuit alleges that Ferrellgas:
+ sometimes charged customers more than double the average per gallon rate, despite telling them that it would charge “our current market price”;
+ charged customers up to $199 for “low usage” fees, if the company determined that the customer did not use enough propane during a given period;
+ charged customers up to $99 in “tank pick-up fees” when a customer who was renting a tank chose to stop doing business with Ferrellgas.
Attorney General Lori Swanson provides the following tips to Minnesotan when buying propane gas.
What is the Price Per Gallon?
Propane gas companies typically charge customers a per-gallon price for propane. Although propane gas companies may promise low prices in their advertisements to attract customers, consumers should not take the company’s word for it. Instead, consumers should request specific information about the per-gallon cost (and other fees) in writing from the company. Consumers should shop around for the best price and closely monitor the prices they are charged. Under Minnesota law, if you rent your tank from a propane company, you may only fill it with propane supplied by that company. If you can afford it, you may want to consider purchasing your own tank so that you can shop around for propane to fill the tank to obtain the best per-gallon price among a variety of companies. Suppliers may be more likely to give you a better price if they know that you are considering switching to another provider due to cost.
Research Rates in Minnesota
You may research statewide rates for propane gas by contacting the Minnesota Department of Commerce. Between the months of October and March, the department prepares weekly reports that include the statewide “average” price per gallon. Consumers may contact the department at: Department of Commerce; Market Assurance Division; 85 E. 7th Place, Ste, 500; St. Paul, MN 55101l; call 651-296-2488 or 1-800-657-3602; or visit them online at www.commerce.state.mn.us.
Beware of Hidden Fees and “Fine Print” Contracts
Some unscrupulous companies may attempt to trick customers by hiding fees in lengthy “fine print” contracts. Furthermore, some consumers who rent their tank from a company have been charged tank rental fees that were not fully disclosed to them, as well as fuel removal fees and tank pick-up fees if they want to change providers. Consumers on a fixed income who rent a tank may find it especially difficult to shop around and change providers due to prohibitive fees. Consumers should request a copy of, and thoroughly review, any written contract from the company to make sure they understand the terms and conditions of the contract, and to make sure that the company is not trying to hide hefty fees in the “fine print.”
Consumers who would like to file a complaint or request assistance may write to: Office of Minnesota Attorney General Lori Swanson; 1400 Bremer Tower, 445 Minnesota St.; St. Paul, MN 55101; or call 651-296-3353 or 1-800-657-3787 (TTY: 651-297-7206 or 800-366-4812); or visit www.ag.state.mn.us.