MONTPELIER, Vt. (Legal Newsline) - Vermont Attorney General William Sorrell announced a $315,000 settlement on Thursday with Inergy Propane, doing business as Pyrofax Energy.

Pyrofax will pay $140,000 in civil penalties to the state of Vermont and $100,000 as a payment to Vermont's LIHEAP program to resolve allegations that the company violated Vermont's consumer protection laws. Sorrell alleges that the company broke the laws by assessing minimum usage fees in fall 2010 and delayed refunds after the termination or disconnection of services.

Pryofax will pay an additional $75,000 to former consumers who allegedly received late refunds after the 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," Sorrell said. "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 fall 2010, Pyrofax notified at least 3,950 consumers in Vermont that they would receive a minimum usage charge based on their usage of propane since Dec. 1, 2009. The billing or collection of any charge not clearly and conspicuously disclosed through writing or contract at least 60 days prior to the charge is prohibited by Vermont Consumer Fraud Rule 111.20. After legislative action in 2011, Vermont law now expressly prohibits the assessment of minimum usage fees.

The company has already sent penalties and refunds to consumers who received late refunds after the new law went into effect. Under the terms of the settlement, the company will also send $250.00 checks to 302 Vermont consumers who disconnected services between Jan. 1, 2010 and May 25, 2011, and to those who received late refunds for propane fuel that was unused.

Pyrofax will also hire or designate a compliance officer who will resolve consumer complaints and work as a liaison to Sorrell's office and the Consumer Assistance Program as part of the settlement.