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Minnesota gasps at the financial damage it faces from the Texas freeze

April 22, 2021

The Washington Post

Will Englund

When that big freeze hit Texas in February, the Lone Star State couldn’t help but share its pain.

With its ill-equipped natural gas systems clocked by the cold, Texas’s exports across the Rio Grande froze up and 4.7
million customers in northern Mexico went without electricity — more than in Texas itself. The spot price of gas jumped 30-fold as far west as Southern California. And all the way up by the Canadian border, gas utilities in Minnesota that turned to the daily spot market to meet demand say they had to pay about $800 million more than planned over the course of just five days as the Texas freeze-up pinched off supplies.

“The ineptness and disregard for common-sense utility regulation in Texas makes my blood boil and keeps me up at
night,” Katie Sieben, chairwoman of the Minnesota Public Utility Commission, said in an interview. “It is maddening
and outrageous and completely inexcusable that Texas’s lack of sound utility regulation is having this impact on the rest of the country.”

The Texas market is so large — second only to California’s — and its natural gas industry is so predominant that when
things go wrong there, the impacts can be felt across the country. And in a state that eschews regulation, driving energy producers to cut costs as deeply as they can to remain competitive, things went spectacularly wrong the week of Valentine’s Day.

Minnesota’s biggest gas companies are putting forward plans to recoup their expenses by adding a surcharge to
customers’ bills, which the state utility commission would first have to approve. Normally, such adjustments to account
for winter prices go into effect in September, but Minnesota’s biggest gas utility, Houston-based CenterPoint Energy,
says the financial pinch is so great it wants to start billing customers next month — and charging them nearly 9 percent interest until the extraordinary costs are paid off.

At the same time, the company’s CEO, David Lesar, has been assuring investors that the company has access to plenty of cash and its weather-related costs nationally are not a concern.

Read more.

Author: Hannah Hoeger

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