Granholm Announces Legislation to Help Protect Consumers at the Pump

PRESS RELEASE

Legislation would broaden attorney general’s authority to investigate gas-gouging, price-fixing

LANSING – Governor Jennifer M. Granholm today announced that legislation will be introduced in the State House of Representatives that would give the attorney general full authority to investigate price-fixing and gas-gouging at Michigan’s gas pumps. The governor called for this legislation to protect consumers in her 2008 State of the State address.

“We are working to protect the pocketbooks of consumers who are feeling pain at the pump,” Granholm said. “While the vast majority of service station dealers are reputable business owners who deliver the proper quality and quantity of fuel, this legislation would give the attorney general the authority to make sure that consumers are treated fairly.”

The legislation would amend the Michigan Consumer Protection Act by granting the attorney general the ability to issue a civil investigative demand against companies believed to be in violation of the act without having to first obtain a court-ordered subpoena based on probable cause. And the legislation would clearly define what is considered to be a grossly excessive price for goods and services. With these amendments, the attorney general would be able to more efficiently and readily investigate a potential violation of the act, including consumer complaints against the gasoline industry for price-gouging.

The legislation would also amend the Michigan Antitrust Reform Act to expand the ability of the attorney general and local prosecutors to investigate anti-competitive conduct by the state’s retail gasoline industry by authorizing them to investigate and file actions based on possible violations of both state and federal antitrust laws.

“At a time when global markets and international speculation are causing gas prices to rise, we are going to continue to do everything we can to ensure citizens are getting every penny's worth at the pump,” Granholm said.

In 2007, the Michigan Department of Agriculture inspected 30,262 gas and diesel fuel meters at more than 3,100 locations across the state, which is the highest meter inspection since 1996, resulting in increased compliance efforts by the fuel industry.

Increased inspections have driven meter accuracy up five percent since 2004 to more than 99 percent. Overall meter compliance has increased 12 percent – from 80 percent in 2004 to approximately 92 percent.

Last year, the governor provided testimony before the U.S. House Oversight and Investigations subcommittee and asked Congress to repeal unnecessary federal tax subsidies while ensuring price competition of unbranded gasoline. Additionally, Granholm, along with 20 other state governors, called on President Bush to urge oil companies to invest profits in fixing current refinery capacity issues to help lower prices at the pump.

The legislation will be introduced by State Representatives Mary Valentine (D-Norton Shores) and Robert Dean (D-Grand Rapids).