Indiana Attorney General Greg Zoeller reached a settlement today with Jasper County-based Ashland Propane Demotte, LLC for overcharging its customers this past winter. Affected consumers will receive nearly $20,000 in restitution as part of the settlement.
On Jan. 29, 2014, Gov. Mike Pence declared an energy emergency in Indiana based on the propane shortage caused in-part by extreme winter weather.
“During the worst of the winter, our priority was to make sure Hoosiers had access to heat,” Zoeller said. “When propane prices skyrocketed, there was concern that the hundreds of thousands of Hoosier consumers who rely on propane to heat their homes could be taken advantage of during the crisis. Ashland’s customers who were overcharged will be made whole after the company’s failure to honor its contracts.”
In the fall of 2013, Ashland Propane entered into “pre-buy” contracts with 93 Indiana consumers, agreeing to supply a stated amount of propane to each consumer through April of 2014 at a set price of approximately $1.49 per gallon.
When propane prices spiked nationally in January, Ashland Propane informed pre-buy customers it would not be honoring the locked-in prices because of supply concerns. Instead, the consumers were charged up to $4.79 per gallon for propane, more than three times the agreed-upon price in some cases. Because the consumers were in a contract with Ashland, they were unable to seek an alternate propane supplier.
During January of 2014 – the time period in which Ashland represented to contracted consumers it was experiencing a shortfall of propane – it made deliveries to more than 200 non “pre-buy” contract consumers, in addition to deliveries to “pre-buy” contract consumers. Zoeller’s complaint argues that this indicates Ashland had enough supply of propane to fulfill its contracts.
Pursuant to the Consent Judgment filed in Jasper County, the State of Indiana and Ashland agreed that the company will provide affected consumers with a credit to their account, or a direct refund if the consumer no longer wishes to purchase propane from Ashland.
Based on the attorney general’s investigation into propane, all consumers who were overcharged for propane during the winter months have been made whole according to their original contracts.
Zoeller thanked Deputy Attorney General Mark Snodgrass for his work on this case.