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Minnesota lawmakers look to help customers deal with natural gas price spike

March 18, 2021


Walker Orenstein

The severe cold in the southern U.S. last month will result in higher natural gas bills for a huge swath of Minnesotans. In response, a pair of Minnesota lawmakers have introduced a bill at the Legislature to help low-income people shoulder the extra costs.

The new measure would distribute $100 million to qualifying customers and spend another $15 million on a loan fund for municipal utility companies facing a budget crunch after the February polar vortex. Sponsored by Rep. Jamie Long, DFL-Minneapolis, and Sen. David Senjem, R-Rochester, the bill is scheduled for a Senate hearing Thursday after receiving a House hearing Wednesday. 

While the measure would slash home heating bills for many customers, it won’t offset costs for all of Minnesota’s natural gas customers, who could see bills rise hundreds of dollars. CenterPoint Energy alone expects a $500 million hit in Minnesota because of the crisis, a staggering amount of money the Legislature is unlikely to cover.

“This just dwarfs the scale of anything that we have in place to protect those (low-income) folks, so that’s a really urgent need,” Long said of his bill during an interview Wednesday.

Crisis in Texas leads to high bills in Minnesota

The new surcharge coming to Minnesota heat bills is because of cold weather elsewhere. When an arctic blast froze Texas in mid-February, natural gas supply in the region seized up as demand skyrocketed. That drove up prices.  

Utilities serving Minnesota buy plenty of gas ahead of time on fixed contracts, but they also buy some gas over the short term because it’s usually cheaper.

The Minnesota Public Utilities Commission estimated every residential CenterPoint customer could face a one-time bill of $300 to $400 over typical costs, though that charge is expected to be spread out over many months. Typically, the higher bills would start this fall and last roughly a year.

Under CenterPoint’s recent proposal filed with the Minnesota PUC, those fees would be spread out over two years, starting as early as May and phased in over time. The Houston-based natural gas utility also proposed reducing the heat bill surcharge by half for low-income customers. The remainder of the surcharge for low-income customers would be paid for by an increase on heat bills for hundreds of thousands of other natural gas users.

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Author: Hannah Hoeger

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