Annoying situation, definitely. I hope you are able to resolve it.
I am wondering about your statement above and hope that you vet your planned course of action with an attorney if you decide to follow through with it.
I think it would be wiser, more prudent, and far more businesslike, either simply to state the facts of your complaint again to Expedia, along with the reference # for the FTC, and then, quietly, and without notifying Expedia beforehand, follow up with AG route if the matter is not resolved--OR just go ahead and complain to the AGs (both states), and then wait for the AG office to contact Expedia.
Your order of action, sending a contemplated letter of complaint to Expedia, that you will file a letter of complaint with AG unless Expedia meets your demand for reimbursement, might in itself fall within a certain legal category, namely of (arguably) trying to obtain a settlement using the threat of making trouble for the company otherwise. If I am right, an attorney might explain to you what is wrong with that scenario--preferably before you engage in that course of action and not after.
Granted, your intentions are good, but an adversary could twist them. So either complain to the AG or not, but don't tell Expedia that you will file a complaint with the AG unless they settle. (Hope I'm wrong on the legal implications--IANAL, so it wouldn't be the first time I've been wrong.)