PA 16-69—HB 5435

General Law Committee

AN ACT CONCERNING CONSUMERS AND PROPANE FUEL PROVIDERS

SUMMARY: This act makes several changes to the requirements heating fuel dealers must include in their contracts for selling, leasing, or renting an underground or aboveground fuel tank. “Heating fuel” is any petroleum-based fuel used as the primary source of residential heating or domestic hot water (e. g. , home heating oil or propane) (CGS 16a-17).

The act requires heating fuel contracts to give consumers the option of purchasing any underground or aboveground tank at any point during the contract, not just within five years of a contract's start date, as prior law required. It also limits the sale price of these tanks and associated equipment to one that does not exceed the fair market value of a propane tank and associated equipment (i. e. , commercially reasonable price). Prior law limited the sale price only of aboveground tanks, which could not exceed a tank's fair market value. The act also makes other minor changes to the contract requirements for aboveground, underground, and propane tanks.

By law, violators of the heating fuel contract provisions are deemed to violate the Connecticut Unfair Trade Practices Act (CUTPA, see BACKGROUND) and are subject to maximum fines of (1) $500 for a first offense, (2) $750 for a second offense within three years of the prior offense, and (3) $1,500 for subsequent offenses within three years of a prior offense.

EFFECTIVE DATE: July 1, 2016

OPTION TO PURCHASE UNDERGROUND AND ABOVEGROUND TANKS

Under prior law, heating fuel dealer contracts for both underground and aboveground tanks had to contain a provision allowing a consumer to purchase the tank and associated equipment within five years after the contract began. Under the act, the provision must allow the consumer to purchase the tank at any point during the contract. For these contracts to be valid or enforceable, the act requires the (1) contract to include a clear and conspicuous statement in all capital letters and at least 12-point bold type that the consumer is aware of the purchase option and (2) consumer to initial the statement.

Under prior law, contract obligations terminated immediately after the consumer purchased the tank and any associated equipment. The act limits this termination requirement only to existing obligations, but not to guaranteed price plans. By law, “guaranteed price plans” are contracts offering heating fuel at a guaranteed future price or a maximum future price, irrespective of when payment was made (CGS 16a-23m).  

UNDERGROUND TANK SALES PRICE LIMIT

The act limits the sale price for underground tanks and associated equipment to the fair market value of a propane tank and associated equipment. There was no limit under prior law, which required only that dealers disclose the price and prohibited them from increasing it before the contract expired.

ABOVEGROUND TANKS

The act requires heating fuel dealers providing aboveground tank contracts to allow the consumer to buy a new tank, rather than any tank. It also requires them to disclose the sale price of the tank, associated equipment, and installation costs, which must be sold at a commercially reasonable price. Prior law required them to disclose only the sale price of the tank.

The act limits the sale price of these tanks and associated equipment to the commercially reasonable price of a propane tank and associated equipment. Prior law limited only the tank's sale price, which could not exceed its fair market value.

The act also eliminates a requirement that existing oral or written contracts for aboveground tanks with an undisclosed or unspecified purchase option or price include a contract addendum giving consumers the option to purchase by September 1, 2021.

PROPANE TANK DISCLOSURE

Prior law required contracts for renting or leasing propane fuel tanks to include a provision informing consumers of any restrictions on using another propane fuel provider. The consumer had to initial the provision to acknowledge this restriction. The act instead invalidates and makes unenforceable contract provisions that restrict a consumer's ability to use another propane provider, unless the consumer initials a clear and conspicuous statement in all capital letters of at least 12-point font indicating he or she is aware of the restriction.

BACKGROUND

CUTPA

The law prohibits businesses from engaging in unfair and deceptive acts or practices. CUTPA allows the consumer protection commissioner to regulate what constitutes an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $10,000, enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance. It also allows individuals to sue. Courts may issue restraining orders; award actual and punitive damages, costs, and reasonable attorney's fees; and impose civil penalties of up to $5,000 for willful violations and $25,000 for violation of a restraining order.

OLR Tracking: DC; JR; VR; tjo