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Legislature considers assistance to customers to counter natural gas price spike

Published March 16, 2021

This week, the committees responsible for energy in the Minnesota House and Senate will hear identical bills aimed at addressing the severe spike in the price of natural gas that affected Minnesota gas utilities in February. 

The severe cold weather in Texas and the Midwest last month caused the price of gas to skyrocket. Many of Minnesota’s natural gas utilities estimate that an average $200-$400 cost increase will be passed on to each residential customer to recover the high gas commodity costs during the short period of the February polar vortex. CenterPoint Energy alone has approximated the additional cost at $500 million for its Minnesota business. Even if spread over an entire year, this would increase customers’ gas bills by approximately 50%. Other utilities reportedly spent the equivalent of their entire year’s gas budget in just three days. 

Representative Jamie Long and Senator David Senjem, the chairs of each body’s energy committees, are introducing legislation to provide support to low-income utility customers and a zero-interest loan to municipal utilities to help mitigate the impact of this price spike. CUB worked with the authors on crafting the bill’s language. Rep. Long’s bill is HF 2216; the Senate bill has not yet been formally introduced, but the text is available here.

CUB, together with the Energy CENTS Coalition and Minnesota Association of Community Action Partnerships, sent a letter to legislators (pdf) to highlight the urgency of this issue and ask for their support in addressing it. I will also be testifying in support of the House bill on Wednesday at 6:00 p.m. and the Senate bill on Thursday at 3:00 p.m. 

With bipartisan support from the energy chairs in both the House and Senate, this bill has a high likelihood of moving forward. We will be watching its progress and will keep you up to date.

This post was edited on April 2 to correct the referenced House File number.

Author: Annie Levenson-Falk

2 Responses to "Legislature considers assistance to customers to counter natural gas price spike"

  1. Jerry A Rosemeyer Posted on March 18, 2021 at 8:44 am

    Can’t help but wonder why cold weather in Texas should affect the price we in Minnesota should pay for gas. I’ve lived in Minnesota for over 65 years. It should come as no surprise to anyone that it gets cold here in the winter. Gas company not see this?

  2. Annie Levenson-Falk Posted on March 18, 2021 at 8:53 am

    Good point about planning. The Public Utilities Commission is beginning an investigation that will look into how utilities prepared for this type of event, among other things. However, Minnesota utilities buy gas from out-of-state suppliers, and prices spiked all over the region. It was a combination of high demand from Minnesota all the way down to Texas plus wells and equipment freezing off in the southern US, so the supply wasn’t there. It’s frustrating that we get hit with high costs because other states weren’t prepared for the weather, but that is what happened. Senator Tina Smith is asking for a federal investigation into price gouging, though.

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