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CUB calls for moratorium on CenterPoint’s wintertime disconnections

Published January 2, 2024

CUB and the Energy CENTS Coalition (ECC) recently recommended that CenterPoint Energy be prohibited from disconnecting customers during the winter. This decision was not made lightly. We reviewed numerous utility filings, compiled data on disconnection trends, and uncovered several questionable policies and practices engaged in by utilities. We detailed our concerns in comments filed with the Minnesota Public Utilities Commission (PUC). Throughout our review, we became increasingly worried that CenterPoint’s policies could harm customers during the winter months. We therefore requested that the PUC order CenterPoint to pause wintertime disconnections until it has a chance to review the company’s practices. 

Below, we summarize some of the issues we identified and our accompanying recommendations. In addition to requesting a moratorium on CenterPoint’s wintertime disconnections, we also sought to gather information on and correct other utilities’ potentially harmful practices. Utilities filed responses to our comments on December 21. The PUC will meet to determine its next steps in the coming months.

Overview

During the height of the COVID-19 pandemic, ECC and CUB worked with utilities to develop and improve residential customer status reports, which must be filed on a monthly basis. These reports include information on utility costs, average past-due balances, service disconnections and reconnections, Energy Assistance enrollment, payment arrangements, and many other variables. Recently, the PUC issued a Notice of Comment Period requesting information on data trends and asking whether action should be taken to correct negative impacts to ratepayers.

Upon reviewing this data, CUB and ECC identified multiple concerning trends. Utilities’ average residential bills are rising at alarming rates, arrearage balances are increasing, and customers are being disconnected more often and for longer periods of time. A variety of factors contributed to these affordability issues: Winter Storm Uri costs were passed onto customers, natural gas prices increased, and multiple utilities petitioned for rate increases. The events of the past few years have had a profound and lasting impact on Minnesotans.

Beyond these external factors, we are concerned that some utilities are engaging in practices that further amplify these negative effects. The comments we filed at the PUC raise awareness about these issues and seek to protect residential customers from harmful practices.

CenterPoint

A number of concerning trends and practices reported by CenterPoint cause us to question whether the company is complying with state laws and regulations designed to protect residential utility customers. Given these practices and the severity of harm households face when heating service is disconnected, we have requested that the PUC prohibit CenterPoint from disconnecting customers during Minnesota’s Cold Weather Rule period until the company demonstrates compliance with applicable consumer protections.

CUB and ECC were especially concerned with the information reported by CenterPoint related to cold weather disconnections. By law, utilities are prohibited from shutting off electric or gas service during the winter months if customers enter into and follow payment agreements based on their financial circumstances. For low-income customers, utilities cannot require these payment agreements to exceed ten percent of household income during the Cold Weather Rule period (October through April). CenterPoint has been granting cold weather protections to a declining number of customers and has carried out more wintertime disconnections since 2021 than all other utilities combined.

Moreover, CenterPoint customers are subject to disconnections as soon as an account is $75 past due. This disconnection threshold is well below customers’ average winter bills. As a result, a single missed payment could put customers on a path to getting their service cut off.

CenterPoint has also been demanding unreasonably high down payments as a prerequisite for entering into payment agreements or attempting to reconnect service. In October, the average down payment requirement was $382. In other words, an overdue customer had to pay, on average, $382 down just to enter into a payment agreement to avoid disconnection. That figure reached as high as $469 last May. These amounts far exceed average monthly residential bills and serve as a significant barrier for customers seeking to enter payment agreements.  

Together, these practices are harmful to CenterPoint’s residential customers. We have asked the PUC to establish a minimum disconnection threshold of $200 and to suspend residential disconnections during the Cold Weather Rule period unless and until the PUC is satisfied that CenterPoint’s practices comply with Minnesota law and PUC rules.

On December 21, CenterPoint filed a brief response to CUB and ECC’s comment. CenterPoint’s filing does not provide much clarity on their policies and practices, and it fails to address a number of CUB and ECC’s concerns.

Greater Minnesota Gas

Greater Minnesota Gas (GMG) has stated that its payment agreements include language informing customers they may be disconnected without notice if they fail to follow agreement terms. By law, utilities are required to notify customers of impending disconnections. We have urged the Commission to order Greater Minnesota Gas to immediately stop this practice and provide customers with appropriate notice.  

GMG did not file a response. 

Minnesota Energy Resources Corporation

Since 2015, the number of Minnesota Energy Resources Corporation (MERC) customers disconnected for 30 or more days has increased by approximately 111 percent. As of September 2023—immediately before the start of the Cold Weather Rule period—2,303 customers remained disconnected for more than 60 days. These numbers are extremely concerning. We have requested that MERC describe its disconnection practices and identify what measures it is taking to connect customers with affordability programs.

MERC further explained its practices in its December 21 response, which we are in the process of reviewing.

Dakota Electric Association

The Dakota Electric Association has reported that it requires service deposits ranging from an average of $164 in October 2023 to more than $620 in February 2023. Because utilities are not allowed to charge more than two months’ gross bill amount as a service deposit, we requested additional information to ensure customers are adequately protected.

In its December 21 response filing, Dakota Electric Association confirmed that service deposit amounts are based on two months of billing history for each affected customer.

Conclusion

CUB is committed to advocating on behalf of residential customers and will continue to push back against utility practices that cause harm. If you or someone you know is experiencing problems with energy affordability or has faced any of the issues discussed above, do not hesitate to contact us by emailing info@cubminnesota.org or by calling 651-300-4701, extension 2.

Author: Brandon Crawford

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