A gas company with local ties has been ordered to pay back fees charged to customers who didn’t use enough propane.

In a settlement with the Minnesota Attorney General’s Office, Ferrellgas has been required to pay $450,000 to the state.

“For many people, propane is a costly necessity to heat their homes,” said Attorney General Lori Swanson in a news release. “Propane pricing should be transparent so that consumers can make informed choices about their purchases.”

According to the state’s suit, Ferrellgas, a national propane energy company with an Austin location, charged undisclosed and poorly disclosed “low usage” and “no usage” fees of up to $199 for consumers who in the company’s judgment did not use enough propane.

The suit also said the company didn’t always disclose specific per-gallon prices to consumers who called to fill their tanks.

And despite telling customers it would charge “competitive propane prices” or “our current market price,” the suit said the company charged significantly higher rate than competitors.

The settlement requires Ferrellgas to disclose the price it will charge consumers at the time of orders. The settlement also requires clear fee disclosures.

The Attorney General’s Office created a settlement fund to compensate Ferrellgas customers who make a valid claim that they paid undisclosed charges or fees. Ferrellgas must directly refund all no-use and low-use fees charged to Minnesotans.

Ferrellgas will use the settlement as a way to improve services to its 50,000 customers in Minnesota, according to spokesman Jim Saladin.

“Ferrellgas is extremely pleased with the settlement,” a company statement read. “We feel that while we have long been a propane industry leader with regard to consumer disclosures, and this process has been an opportunity to re-examine our practices and make improvements where necessary. We look forward to continuing to provide excellent service to our thousands of Customers in the state of Minnesota.”

Saladin said the company discontinued low-use and no-use charges before the settlement.

“We really are quite pleased with it,” he said. “We think it was a favorable outcome.”

If you think you qualify for a refund or have questions, contact the Attorney General’s Office at 651-296-3353 or 800-657-3787.