- Associated Press - Wednesday, October 22, 2014

DETROIT (AP) - A settlement has been reached between Michigan and a propane supplier over high prices charged to customers trying to heat their homes during the cold and snowy winter months, Attorney General Bill Schuette announced Wednesday.

The deal with AmeriGas affects about 5,600 customers and is worth more than $500,000.

Current customers will receive credits to their accounts. Former customers will get refunds.

“Last year, we had a classic Michigan winter,” Schuette told reporters during a telephone conference. “Propane is a staple. It’s how you get your heat. It’s how you stay warm. It’s how you run your appliances. When you’re getting gouged, when you’re getting ripped off, that’s not acceptable.”

Michigan declared a propane energy emergency as supplies dropped in January. The state Public Service Commission said in February that propane prices were 72 percent higher than the previous year.

Propane prices approached $5 a gallon in late January in parts of the Upper Peninsula. At that time, the statewide average was about $3.60 a gallon.

Problems that created the shortfall included heavy demand caused by the cold weather and a late harvest that required propane for drying grain. There also were transportation issues caused by icy roads, heavy snowfall, rail line problems and pipeline maintenance.

The state filed a lawsuit in September claiming violations of the Michigan Consumer Protection Act by AmeriGas.

AmeriGas has 38 locations in Michigan, serving about 85,000 people, the company said Wednesday in a statement.

“This past winter was extremely difficult for propane users as the industry experienced limited supply, high propane costs and prolonged cold weather,” the statement read. “Despite the many challenges faced last winter, AmeriGas is proud that we were able to utilize our national resources to bring supply to our Michigan customers.”

The company maintains it also complied with state law.

“In cooperation with the Attorney General, we identified a small number of customers who were incorrectly billed this past winter,” AmeriGas said. “We have reviewed our policies and made corrections as appropriate and as outlined in the settlement agreement.”

Schuette’s office said more than 5,000 AmeriGas customers will have per-gallon propane rates charged in January and February rolled back. About 830 customers also will be reimbursed the difference between prices listed when they placed orders and when the gas was delivered between Jan. 14-28. Each of the affected customers also will get an additional 50 percent of the difference they are owed.

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