30 March 2022
ST. PAUL, Minn. (WCCO) – Minnesota lawmakers are mulling proposals aimed at providing relief to utility customers who are paying for surge charges incurred during a cold snap last February when a winter storm in Texas disrupted natural gas supplies.
A proposal that passed out of a Senate committee Wednesday would create a tax credit for municipal utility customers for excess costs paid over that five-day period last year.
It would also set up a program run by the Public Utilities Commission for larger, regulated utilities like CenterPoint and Xcel Energy to provide bill credits to their customers.
“The legislature recognizes that costs for natural gas, propane, and heating oil have increased to levels that have become unaffordable,” says the bill’s state purpose, adding that the legislation is “a mechanism for relief to customers of utilities and suppliers in this state.”
That polar vortex cost regulated and municipal utilities in Minnesota more than $660 million during the five-day period last year, said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota. The dramatic increase in prices ultimately shifted onto to the customers, many of whom are paying for that in additional fees over several months.
That’s on top of higher energy costs overall.
“We’ve probably heard from this one issue more than any other issue in the six years we’ve been around,” she said. “The costs are really substantial but beyond that people are just upset that Texas didn’t properly weatherize their equipment and that’s caused an enormous cost on people in Minnesota through no fault of their own.”
So far there isn’t an amount determined for the bill credit program or tax credits, which Sen. David Senjem, R-Rochester, said will be determined later, calling the proposal a “vehicle” to continue the discussion.
“It is a way to get money back to the people that we have and help defray these costs people are pretty concerned about right now,” said Senjem, co-author of the bill.
But to cover everyone is likely to be expensive.
“One of the challenges is costs are so high and the scope of the money we’re talking about is really large, even just from the price spike last February,” Levenson-Falk said. She supports efforts by the legislature to offer relief to consumers but suggested a targeted approach might be better given the funds needed to support the legislation.
There is a similar proposal in the DFL-controlled House that would create a rebate program for customers of the state’s 33 municipal gas utilities, many of which couldn’t spread out the costs of the February spike like larger, investor-utilities did and had to pass along the whole cost right away to consumers.
At Owatonna Public Utilities, which serves 12,000 customers, saw natural gas costs during that time soar to $9.4 million, director of finance and administration David Olson told a House committee last week.
That was $8 million budgeted and resulted in an average of $340 extra per residential customer.
“To put it in perspective, the added cost of this five-day event was roughly two-thirds of our customers’ average annual natural gas bill,” he said.
In that House meeting, lawmakers approved a provision to create a “polar vortex restitution account” with an undisclosed amount for customers of investor-owned utilities.
Levenson-Falk noted that there is still energy assistance available for qualifying Minnesotans, which provides grants to cover heat, power and water costs. Many eligible people, she said, don’t tap into the program.
Almost 600,000 Minnesota households are eligible for help, according to the Minnesota Department of Commerce. There’s also weatherization assistance.