Ohio Energy Company Fined, Ordered To Pay Restitution

Attorney General Spitzer today announced that an Ohio-based energy company will pay nearly $235,000 in penalties, restitution and account credits to 300 of its New York customers for engaging in deceptive practices and providing poor customer service.

Today's announcement marks the second punitive action against Level Propane Gases, Inc., of Westlake, Ohio, taken by Attorney General Spitzer in the last 18 months.

"Time and again this company violated state laws and betrayed the trust of hard-working New York consumers who chose to do business with it," said Attorney General Spitzer. "New York is a lucrative market for both in-state and out-of-state businesses. However, we will not tolerate fraudulent or deceptive practices in the conduct of business in this state."

Today, Attorney General Spitzer announced that Level Propane will pay $77,858 in restitution and $57,038 in account credits to 300 New York customers and pay $100,000 in penalties and costs to the state.

Level Propane repeatedly violated New York consumer protection laws by increasing its price per gallon on propane after signing contracts with customers for fixed "level" prices; by not accurately disclosing the price per gallon consumers would pay; and on occasion, by failing to deliver propane in a timely manner, causing some consumers to run out of fuel.

In addition, Level Propane charged consumers a hidden fee for using less than a set amount of propane per month; failed to give customers refunds for propane pumped out of tanks at the termination of service; and failed to honor the discounted price per gallon offered to customers who bought their propane tank from Level.

On February 29, 2000, Attorney General Spitzer announced an action that settled the complaints of 100 Level Propane customers for $17,000 in penalties and $17,180 in restitution and credits. At that time, the company entered into an agreement with the Attorney General's office in which it pledged to comply with New York consumer protection laws. Level Propane's frequent violation of its commitment led to today's enforcement action. Future violations of the law may lead to contempt of court charges and criminal sanctions, including an order barring the company from doing business in New York.

Level Propane serves its 6,000 New York customers from distribution centers in Arcade, Batavia, Herkimer, Howard, Lyons and Tulley. The company is a subsidiary of the Level Energy Group which sells propane gas to consumers in 18 states.

Following Attorney General Spitzer's February 2000 action against Level Propane, numerous other states either undertook or are considering similar actions, including Florida, Indiana, Iowa, Kentucky, Michigan, New Mexico, North Carolina, Ohio, Pennsylvania and Tennessee.

In January 2001, the National Propane Gas Association, an industry trade group representing 3,700 gas suppliers, expelled Level Propane from the organization saying that the company "has not been acting in the best interests of the public." Level Propane is the first company to be expelled from the trade association in more than 25 years.

"Level Propane provides a valuable service by selling fuel that heats homes through upstate New York's frigid winters," said Attorney General Spitzer. "I want the company to continue doing business in New York. To expand here. To succeed here. But the company must realize that while doing business in New York offers the opportunity for growth and profit, it also carries the responsibility to conduct itself in law-abiding fashion."

Customers of Level Propane who believe they have a claim against the company may file a complaint with the Attorney General's office within 180 days. This can be accomplished by calling the Attorney General's Rochester Regional Office at 716-327-3240, by calling the Attorney General's consumer helpline at 1-800-771-7755 or by visiting his website at www.ag.ny.gov.

Any consumer wishing to terminate their service with Level Propane may do so within 60 days without cancellation fees - which average $81 - by directly notifying the company in writing.

The case was handled by Assistant Attorney General Carlos Rodriguez and Consumer Frauds representative Richard Pusateri of the Attorney General's Rochester Regional Office.