Another winter storm is impacting Minnesotans’ natural gas bills

Last month, Winter Storm Fern dumped snow and ice across large swaths of the southern and northeastern United States, impacting around 220 million people and causing widespread flight delays and electric power outages. The storm also caused temporary but significant spikes in the cost of natural gas. 

At the same time, we in Minnesota experienced bitterly cold weather, with temperatures below 0°F for over a week straight. Just as the price of gas was spiking, Minnesotans were using more of it to heat their homes. 

Gas utilities pass the cost of gas on to their customers through a “purchase gas adjustment” (PGA) true-up mechanism. Fluctuations in gas prices are usually minor. However, extreme weather events like Winter Storm Fern can cause noticeable impacts.  

Keep reading to see how your bill will be impacted, and how CUB’s past advocacy has protected Minnesotans from even higher gas bills. 

What to expect on your next gas bill 

Minnesota’s largest gas utilities – CenterPoint, Xcel Energy, Minnesota Energy Resources (MERC), and Great Plains Gas – have filed PGA true-up reports that give us a better sense of how monthly bills will be impacted following Winter Storm Fern. Some consumers could see an additional charge of $30 or more. The numbers to the right can help you estimate the additional amount you’ll owe on your next gas bill. 

To calculate how this cost increase will impact your next gas bill, use the below equation to see how much more you’ll be paying in February if you used the same amount of gas as the previous bill: 

• Multiply last month’s gas usage by the cost-of-gas increase listed above
• Add that number to the total amount due on your last gas bill 

Though the numbers above seem small, they can cause a significant increase in your monthly bills. For example, per Xcel’s filing at the PUC, the typical gas customer uses 152 therms in the winter. A customer using the average 152 therms per month would see a $33.63 increase in their next gas bill. 

Any sudden bill increase will have a negative impact on Minnesota gas customers. However, changes adopted Winter Storm Uri in 2021 (due in part to CUB’s advocacy) will soften the blow of Winter Storm Fern’s impact on your gas bill. 

How lessons learned from Winter Storm Uri set us up to better protect Minnesota ratepayers 

Winter Storm Uri was a widespread weather event that brought unusually cold temperatures across much of the country over President’s Day Weekend in February 2021. Increased demand for natural gas, reduced gas supply due to frozen infrastructure in southern states, and gas markets being closed an extra day over a holiday weekend caused gas prices to spike to historic levels. 

Over just five days, CenterPoint, Xcel Gas, MERC, and Great Plains collectively incurred around $660 million in extra costs procuring gas for Minnesota customers. If that $660 million had been passed on to customers through the standard PGA true-up mechanism, many Minnesotans would have faced a huge extra charge on one or more of their natural gas bills in early 2021. 

Fortunately, the Minnesota Public Utilities Commission (PUC) intervened to ensure that sudden bill increase did not happen. After the storm, the PUC opened an investigation to assess whether the utilities acted reasonably when incurring those extra costs and how cost recovery could be adjusted to help reduce rate shock for customers. Following advocacy by the Minnesota Department of Commerce, the Minnesota Office of the Attorney General, and CUB,  the PUC required the utilities, themselves, to pay for about 10% of their Winter Storm Uri-related costs and allowed them to recover the remaining 90% through a surcharge added to customers’ gas bills over an extended time period. Many Minnesotans will continue to see a Winter Storm Uri related charge on their natural gas bill through most of 2026 until those costs are fully recovered. Extending cost recovery over this long time period helped lessen the short-term harm that would have arisen from an unexpected, significant increase to natural gas bills immediately after Uri. Importantly, the PUC prohibited utilities from collecting interest on those extended payment. 

Though 90% cost recovery sounds like (and is) a lot, Minnesota was one of the few states that disallowed utilities from recovering 100% of the higher costs incurred during Winter Storm Uri.  The PUC also took aggressive action to require Minnesota’s gas utilities to adjust their practices to be better prepared for future winter weather events and related price spikes.  Among those actions, the PUC now requires Minnesota’s largest gas utilities to engage in integrated resource planning and to submit reports following gas price spike events detailing what the utility did to try to mitigate the impact those events have on their customers. 

Though gas prices for Winter Storm Fern did not spike to the same degree as in Winter Storm Uri, lessons learned and the PUC’s swift action means that we will have a better sense of how Minnesota’s gas utilities prepared for this latest spike to best protect customers from high gas bills. To the left you’ll find CenterPoint, Xcel Energy, MERC, and Great Plains’ reports to the PUC discussing their actions prior to and during Winter Storm Fern. 

CUB is still evaluating the details of these filings, but we intend to participate in any comment period the PUC opens to assess the reasonableness of the utilities’ actions prior to and during Winter Storm Fern.  

Get Involved 

The PUC has not yet solicited public comments on the above filings. However, it is possible they will open a comment period, and any Minnesotan is welcome to participate in that process. If you would like to do so, here are some tips to make your comment as effective as possible.  In the meantime, keep an eye on CUB’s newsletter for additional updates on this issue. 

As always, if you are having trouble keeping up with winter energy bills, contact CUB at 651-300-4701 or contact@cubminnesota. You can also set up a free Energy Bill Consultation to talk about ideas to keep both your electric and gas bills low over the long-term.