Attorney General and Ferrellgas reach agreement - KWWL - Eastern Iowa Breaking News, Weather, Closings

Attorney General and Ferrellgas reach agreement

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DES MOINES (KWWL) -- The Iowa Attorney General's Office and Ferrellgas, Iowa's largest liquid propane gas distributor, have reached an agreement that will change how the company markets and prices its product.

Attorney General Tom Miller says the agreement will enhance clarity and transparency for Iowa customers who rely on LP gas for winter heating.

"This agreement should minimize confusion for Ferrellgas customers across Iowa," said Miller in a written statement. "Consumers will know, up front, what they will be paying for the delivery of the propane that heats their homes."

Under the formal agreement which was signed Wednesday, Ferrellgas, based in Overland Park Kansas, agrees to provide current and future customers a clear pricing "summary sheet" with information about the company's pricing programs, including company surcharges and fees. Ferrellgas will disclose the price per gallon of propane in an easily understood, simplified format.

For current Iowa customers, Ferrellgas agrees to provide an annual pricing summary sheet, spelling out its various pricing plans and how consumers can determine the prices they will pay for deliveries. The pricing summary sheet must disclose how prices vary among its different customer plans and be posted on the company's website.

The agreement covers both non-contract LP delivery and contract delivery, including so-called "will call" customers who place incidental propane orders, and "keep full" customers who have standing orders in place for routine LP refills.

The agreement stems from several years of complaints filed with the Consumer Protection Division about complicated pricing structures. Some customers thought they were paying higher than expected prices when reviewing their Ferrellgas bills. The Attorney General's Office says that in some cases Ferrellgas would cite "our market price" to justify a retail propane price that was substantially higher than the industry market price.

The agreement takes effect on January 1, 2011, and expires on December 31, 2013.

Ferrellgas has agreed to pay the Attorney General $25,000 for costs associated with the case.

Miller expects that other LP retailers across the state will adopt the same guidelines.

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