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HB 5897

Trade: business practices; excessively increased pricing for energy products and services during a market disruption; prohibit. Creates new act.

2023-2024 Regular Session Introduced by Jason Hoskins and 1 co-sponsor

The bill prohibits excessively high energy prices during market disruptions and empowers enforcement actions to recover damages and restrain such price gouging.

REFERRED TO COMMITTEE ON GOVERNMENT OPERATIONS
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Bill Summary · HB 5897

HB 5897 — Energy Pricing Protection Act — Summary

Status: Passed House (Dec 13, 2024); referred to committee in Senate (most recently listed as REFERRED TO COMMITTEE ON GOVERNMENT OPERATIONS). Sponsor: Rep. Laurie Pohutsky. Tie‑barred with related bills addressing price gouging for other goods and lodging (HBs 5895, 5896).

Purpose

To prohibit excessive pricing (commonly called price gouging) for certain energy products and related services during a period of market disruption, and to authorize investigative, civil and equitable remedies against violators.

Key definitions

  • Market disruption: a change in the market (actual or imminently threatened) caused by weather/force of nature, failure/shortage/disruption of energy production or distribution, strike, civil disorder, military action, war or threat of war, national/local emergency, or other abnormal market condition.
  • Energy product or service: gasoline, propane, home heating oil, or a service necessary to provide those products that are vital to residents’ health, safety, and welfare.
  • Exclusions: products or services regulated by the Michigan Public Service Commission or the Federal Energy Regulatory Commission; member‑regulated electric cooperatives; certain joint‑action municipal systems; and municipally owned utilities.
  • Excessively increased price (as passed by the House): an “unjustified disparity” defined as a price increase of more than 20% relative to the price in the same market immediately before the market disruption, unless the seller shows the increase is attributable to higher costs to bring the product/service to market or to an extraordinary pre‑disruption discount.

Prohibited conduct

During or reasonably after a market disruption, any person in the chain of distribution for covered energy products or services may not:
- Charge a price that is grossly in excess of comparable products or services;
- Charge an “excessively increased price” as defined above; or
- Offer for sale at an excessively increased price.

Enforcement and remedies

  • Investigative powers: Attorney General or local prosecuting attorneys may issue written investigative demands (testimony, documents); courts may enforce demands.
  • Civil remedies: AG may bring class actions on behalf of Michigan residents to recover actual damages (or $100, whichever is greater); may seek reimbursement, equitable relief, rescission or other relief; courts may appoint receivers or sequester assets.
  • Injunctive relief and civil penalties: AG may seek injunctions and per‑violation civil fines (amounts to be set by the court/statute — bill provides for civil penalties).
  • Defenses/limits: bona fide error with reasonable procedures limits recovery to actual damages. Statute of limitations: AG actions no more than 6 years after occurrence and no more than 1 year after last payment in an implicated transaction (whichever ends later).
  • Confidentiality: investigative materials are confidential until enforcement action is filed.

Who is affected

  • Covered: retailers, wholesalers, distributors, and any business in the chain of distribution selling gasoline, propane, home heating oil or related services in Michigan during a market disruption.
  • Protected: Michigan consumers/residents.
  • Not covered: entities and products regulated by specified state/federal energy authorities and certain municipal/cooperative utilities.

Legislative history and notable changes

  • Introduced July 30, 2024 (original text used a 10% threshold).
  • Committee substitutes increased the threshold (committee versions showed 15%).
  • As passed by the House (H‑4 substitute, Dec 13, 2024) the “unjustified disparity” threshold is 20%.
  • Passed the House unanimously (56–0) with immediate effect; transmitted to the Senate and referred to relevant committees.

Potential impact

If enacted, the bill would limit price increases for key heating and fueling supplies during emergencies or abnormal market conditions, empower the AG to investigate and litigate on behalf of consumers, and expose sellers who cannot justify price hikes to restitution, injunctions and fines. Businesses that face legitimate cost increases can avoid liability by documenting those cost drivers.

Compiled from official sources — confirm details with the bill’s official record.

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