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CUB is leading effort to develop long-term system planning for Minnesota’s gas utilities

Published November 1, 2023

In February 2021, Winter Storm Uri caused natural gas prices to spike across the country. Over a five-day period, Minnesota’s four largest gas utilities incurred approximately $660 million in extraordinary costs serving their Minnesota customers. Most of those costs continue to be recovered today through surcharges added to Minnesotans’ bills. Thankfully, Minnesota’s Public Utilities Commission (“PUC”) took decisive action to help ensure Minnesotans are better protected from similar events in the future. 

As part of investigating Uri’s effects on Minnesota’s gas utilities, the PUC required CenterPoint, Xcel, MERC and Great Plains Natural Gas to file forward-looking plans on how they will prepare for and address future extreme weather and/or market events. In response to those plans, CUB recommended that the PUC require the gas utilities to file long-term plans transparently explaining how they plan to meet projected demand and adjust to changing circumstances over a long-term time horizon. (Such a requirement is already applicable to Minnesota’s largest electric utilities.) In our comments outlining this recommendation, we proposed a high-level framework of what such a planning process should entail. The PUC adopted our recommendation, and will now require Minnesota’s three largest gas utilities (CenterPoint, Xcel, and MERC) to file long-term plans. In early 2023, the PUC opened a docket (Docket No. 23-117) to solicit additional comments on the contents and procedural aspects of a gas long-term planning requirement, using CUB’s proposed framework as a starting point. 

Since then, CUB, the gas utilities, state agencies, environmental advocates, labor groups, and other interested parties have participated in a stakeholder group organized to further define what goes into a gas long-term system planning process. Throughout this process, the need for long-term gas system planning has become even clearer. Recent legislative and policy changes suggest gas service and usage will change significantly in the coming years. Most notably, in 2022 Governor Walz announced Minnesota’s Climate Action Framework, which established a goal of achieving net-zero greenhouse gas (“GHG”) emissions by 2050. Meanwhile, Minnesota’s Natural Gas Innovation Act and the federal Inflation Reduction Act create new opportunities and incentives for Minnesota’s gas utilities to think differently about how they operate and serve their customers. In combination, these changes (among others) will affect what gas service looks like in the future. If Minnesota’s gas utilities were to maintain business-as-usual without accounting for these developments, gas rates could rise significantly for some customers. In order to navigate these changes in the best way possible for the utilities and their customers, it is important to plan ahead–and for that planning to begin now.

On October 24, 2023, CUB filed a more detailed proposal regarding what a gas long-term system planning process should entail, including procedural aspects and timelines, plan components, and proposed Commission evaluation criteria. In terms of plan components, CUB recommended including distribution planning (e.g., how gas is delivered to end-use customers) as well as resource planning (e.g., how gas resources are used to meet the projected, future demand of gas customers). Our proposal was informed by Minnesota’s existing electric utility planning process, as well as long-term gas planning processes currently required in other states like Washington, Oregon, New York, and Colorado. We are proud of the proposal—and of playing an important role in moving this process forward.

What happens next?

Following CUB’s October 24th submission, the stakeholder process will continue and will loosely follow a timeline established here. Most immediately, stakeholders will have two opportunities to file written comments on CUB’s proposal, by November 30 and then December 29, 2023. From there, we anticipate additional stakeholder meetings, PUC-initiated comment periods, and public hearings. Notably, there will be multiple opportunities for public engagement on this docket moving forward.

Get involved

The PUC has specifically called for public comments on the following topics:

  • How do decisions about natural gas utility service influence your community in unique ways, what might others not see that we should know about (e.g. relationship to a particular power source/appliance)?  
  • What changes, if any, would you like to see in how your gas utility delivers power to your home or business?  
  • Before utilities file their completed resource plans, how should they engage with the public and community groups to include community needs and wants in resource plans? How should utilities explain why community input was or was not incorporated into final gas resource plans and decisions? 

If you have thoughts on these questions, please share them with the PUC. There are a few ways you can do this.

You can write a comment online or send an email to consumer.puc@state.mn.us, and reference Docket No. 23-117. (Please note that everything in your comment will become part of the public record.) While written comments will be considered throughout this process, comments specifically addressing the above questions should be submitted before December 29, 2023.

You can also participate in one of several public hearings that will be held in the Spring of 2024. Though the hearings have not yet been scheduled, we will share more specific information on how to participate when it becomes available. Keep an eye on our blog and social media pages for updates!

Author: Brian Edstrom

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