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Attorney General Settles Consumer Protection Claim Against Pyrofax Energy for Minimum Usage Fees

CONTACT: Robert F. McDougall, Assistant Attorney General, (802) 828-5507

January 19, 2012

Inergy Propane, doing business in Vermont as Pyrofax Energy, has agreed to pay $140,000 in civil penalties to the State of Vermont and $100,000 as a payment to the Vermont LIHEAP program to settle the Attorney General’s claims that Pyrofax violated Vermont’s consumer protection laws when it assessed “minimum usage fees” in the fall of 2010 and delayed refunds following termination or disconnection of services. An additional $75,500 will be paid to former consumers who received late refunds following disconnection of services.

“The Consumer Assistance Program was flooded with calls from consumers in the fall of 2010 after Pyrofax imposed its minimum usage fee,” said Attorney General Sorrell. “While Pyrofax took steps to quickly reverse the minimum usage fee, the effect of that move was a lot of unhappy customers and eventually a change in Vermont law, giving consumers more flexibility in choosing propane dealers and a penalty if the company is late with refunds.” In the fall of 2010, Pyrofax notified at least 3,950 Vermont consumers that they would be charged a minimum usage fee based on their propane usage since December 1, 2009. Vermont Consumer Fraud Rule 111.20 prohibits the billing or collection of any charge that is not clearly and conspicuously disclosed through contract or writing at least 60 days prior to the charge. As a result of 2011 legislative action, Vermont law now specifically prohibits the assessment of minimum usage fees.

Pyrofax has already sent refunds and penalties to consumers who received late refunds since the new law went into effect. As a result of this settlement, the company will also send checks for $250.00 to each of 302 Vermont consumers who disconnected services between January 1, 2010, and May 25, 2011, and who received late refunds for unused propane fuel. Consumers can expect to receive those checks in approximately 6 weeks and can call the Consumer Assistance Program (1-800-649-2424) with questions.

As a part of the settlement, Pyrofax has also agreed to hire or designate a “Compliance Officer” who will, among other duties, resolve consumer complaints and work as a liaison to the Consumer Assistance Program and Attorney General’s Office.

Related documents:

Assurance of Discontinuance
Consumer Fraud Rule 111

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