Customers sue propane provider

‘Prices fluctuated like the wind’ according to plaintiffs’ lawyer, By Jennifer Nelson-Loder LAFAYETTE, N.J. — Some Sussex County homeowners say Suburban Propane charged “exorbitant prices” for propane. Thirty-two of them are suing the company. They filed a civil suit on July 9 in Superior Court in Newton accusing Suburban of charging higher fees for propane than other companies and violating the New Jersey Consumer Fraud Act. The company is not at fault, says its lawyer Dietrich Snell of the New York City firm Proskaur Rose. “Suburban Propane has complied with the law in all respects. There is no merit whatsoever to this lawsuit and the company intends to contest the claims vigorously as it defends itself in court.” According to other published accounts, several lawsuits have been filed against Suburban claiming high prices for propane and not allowing customers to obtain propane from other providers. A similar lawsuit filed in May of 2010 with the U.S. District Court in New Jersey claims some customers throughout the New Jersey, New York and Pennsylvania region were charged up to $7 per gallon for propane, several dollars above market rate. The Sussex suit began to take shape after a handful of residents in the Meadow Ridge Estates development in Lafayette, N.J., learned that Suburban Propane was allegedly charging up to $2 more per gallon, compared to the propane market price. Some of the homeowners then tried to purchase propane from another company, only to be refused as Suburban claimed exclusive ownership of the underground tanks. That barred the customers from obtaining services from a new company, they say. It is fairly standard practice, however, for propane suppliers to own the tanks they fill, according a clerk at a PA propane provider, Combined Energy. They indicated that sometimes, companies charge a fee of about $1 a month to rent the tanks. If customers want to switch suppliers, the tank is returned to the supplier and a new tank is hooked up by the newly contracted firm. Fees are charged for the transactions. Some homeowners own their own tanks, but it is not common. A change of ownership The group of homeowners suing Suburban all originally had been customers of Agway Energy, which was acquired by Suburban in 2004. Following the takeover, according to the suit, all residents were required to sign a written contract drafted by Suburban or they would not be provided with propane. The residents use propane as their primary heating source. Vernon N.J. lawyer John McDermott filed the suit on behalf of the 32 homeowners. He says that in addition to the company making it difficult for them to purchase propane elsewhere, some residents had faulty gauges. Others, despite signing up for automatic deliveries, never received propane refills and they ran out in the winter. Suing for a free market The core issue though is the high prices, which lawyer McDermott said, “fluctuated like the wind.” McDermott says he and the others want to resolve this matter without resorting to litigation. They want Suburban to relinquish their alleged rights to the tanks so the homeowners can contract elsewhere. In addition, the residents are seeking damages for the extra money they say they paid for the above-market prices Suburban was charging and for counsel fees.