- The Washington Times - Sunday, November 16, 2003

RICHMOND — L. Chester Carter recently lost a Board of Supervisors election, and he has a pretty good idea why: complaints that his convenience store charged exorbitant prices after Hurricane Isabel.

Mr. Carter admittedly bumped up the prices of ice and gas after the storm, but he says he did it because he took on the added burdens of running generators, bringing in ice and cooking up extra biscuits to help residents, emergency workers and utility crews.

“What I did was what the state and federal governments couldn’t do: Stay open and deliver services to the general public,” Mr. Carter said from his Carter’s 1 Stop in Stony Creek, about 40 miles south of Richmond.

He said boosting prices — including a 10-cent-a-gallon markup on gasoline — was an attempt to make a fair profit, not gouge storm victims.

But what Mr. Carter found out is what national retailers learned long ago: Hurricane markups infuriate customers. After the hurricane struck Virginia on Sept. 18, the complaints of excessive prices came in “fast and furious,” said Tim Murtaugh, a spokesman for Attorney General Jerry W. Kilgore.

Virginia tallied more than 40 price-gouging complaints, compared with none in North Carolina and one in Maryland.

Now Virginia officials are talking about seeking the state’s first gouging law, similar to a Florida measure that prohibits merchants from overcharging after a disaster.

Business owners say they have the right to raise prices and protect profit margins as costs rise. And confusion over the cost of rarely used services also can lead to unfair accusations.

Harold Diggs said he was stunned when Rick’s Tree Service of Kilmarnock quoted him a price of $20,000 to remove eight oak trees leaning against his Topping home.

An employee, Mr. Diggs said, told him that workers would cut down the trees but wouldn’t remove them from the property. A skeptical Mr. Diggs called his insurance company, which questioned the price. Weeks later, Mr. Diggs ended up paying $5,500 to have the trees removed.

Richard Senter, owner of Rick’s, said a $20,000 quote is reasonable, especially if trees were leaning against the home.

“Everybody says, ‘That’s expensive.’ But they don’t realize the danger involved and the equipment involved.”

Tom Little, a volunteer at an emergency site in Poquoson, grew angry after learning that a recreational-vehicle company was charging storm victims higher prices for rentals.

“Once we contacted the trailer folks and told them we were taking complaints, they did come back and tear up the contract,” Mr. Little said.

Lynne Forrest Dalheim, owner of Dixie RV Rentals of Newport News, said she is only aware of one complaint involving a three-month rental of a travel trailer for $9,890. That amount included a discounted rate, delivery fee, taxes, insurance and a refundable deposit of $1,000.

After receiving a complaint, Dixie RV refunded the family’s money and picked up the vehicle.

The flurry of price-gouging complaints in Virginia likely stems from the storm’s inland path and the extensive damage to trees and power lines. Although Isabel came ashore in North Carolina, Virginia was the most susceptible to wind damage because it was on the hurricane’s dangerous right flank.

A three-year drought also weakened tree roots while a wet summer loosened the soil.

So far, federal assistance to Virginia totals $117 million — compared with $89 million to North Carolina and $70 million to Maryland, according to the Federal Emergency Management Agency.

Mr. Kilgore and Gov. Mark Warner, Democrat, are leading the effort to pass the gouging law, but even Mr. Kilgore’s camp acknowledges that price gouging is difficult to define.

Critics are likely to argue that price controls — even temporary ones — interfere with natural market forces and could create shortages.

The outages and floods in September had people flocking to Mr. Carter’s 1 Stop, one of the few area stores that remained open. But soon, residents were raising eyebrows over Mr. Carter’s prices.

“A lot of people were talking about it,” said Tom Raines, Sussex County’s voter registrar. “I merely count the votes.”

Supervisor Charlie Caple Jr. said he didn’t make Mr. Carter’s markups an issue in their race, but he does say Mr. Carter was being opportunistic.

“People thought maybe you’d have compassion for constituents where you live,” Mr. Caple said.

Mr. Carter said he helped residents by staying in stock, remaining open and even making ice deliveries to another town. He acknowledged that he raised the price of regular unleaded gas from $1.59 per gallon to $1.69, and the price of a bag of ice from 70 cents to $1.15. But he said those increases helped him cope with extra expenses.

“The price of doing business has got to be passed on to the consumer,” Mr. Carter said.

Consumers placed their votes on Election Day. Mr. Carter got 190, and Mr. Caple got 357.


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