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Minnesota Public Utilities Commission affirms decision that utilities must share in the costs of 2021 gas price spike

Published December 14, 2022

Last week, the Public Utilities Commission (PUC) affirmed its decision that gas utilities must share in the costs of a severe natural gas price spike that occurred in February of last year. Winter Storm Uri, which occurred over Presidents’ Day weekend in February 2021, froze natural gas infrastructure in Texas and caused natural gas prices to spike to extremely high levels. Minnesota’s gas utilities—CenterPoint Energy, Xcel Energy, Minnesota Energy Resources Corporation (MERC), and Great Plains Natural Gas Co.—spent approximately $660 million over the long weekend to provide natural gas to their customers. MERC entered into a settlement agreement and agreed not to seek recovery of $3 million of its costs. In August 2022, the PUC determined that the rest of the gas utilities could have avoided spending approximately $60 million during the storm and prevented them from recovering those costs from ratepayers. 

The gas utilities continued their legal battle in November by filing petitions for reconsideration. If these petitions were granted, the PUC would have reevaluated whether to let the utilities recover the $60 million previously disallowed. Instead, the PUC affirmed its decision and denied their requests. While the gas utilities could still appeal to the Minnesota Court of Appeals, the PUC has sent a strong message that actions must be taken to balance the safety and reliability of the energy system with the need for just, reasonable, and affordable rates.

Author: Brandon Crawford

4 Responses to "Minnesota Public Utilities Commission affirms decision that utilities must share in the costs of 2021 gas price spike"

  1. Karen Johansen Posted on December 15, 2022 at 4:01 pm

    Thank you for your hard work and support for the people of Minnesota. You are appreciated.

  2. Henry John Koopmann Posted on January 12, 2023 at 2:55 pm

    This has to do with the severe winter storm in Texas, correct?
    Was bad, as I understand it, but what does that have to do with the price of natural gas here in Minnesota?
    Is that an excuse for price gouging? I don’t understand.

    Thank you in advance for your time.

    HJKoopman

  3. Brandon Crawford Posted on January 12, 2023 at 3:32 pm

    Thank you, Karen! We do our best to represent the interests of Minnesotans and will continue to advocate for affordable and reliable energy services.

  4. Brandon Crawford Posted on January 12, 2023 at 4:09 pm

    Hi Henry,

    Yes, the costs discussed here are associated with Winter Storm Uri, which occurred over the President’s Day holiday weekend in February of 2021. When the storm swept across the country, it brought with it extremely cold temperatures which increased the demand for natural gas to heat homes and businesses around the country. At the same time, the cold weather caused natural gas wells in Texas and other states to freeze, which reduced the amount of natural gas that could be produced. These factors, along with some others, caused the price of natural gas to sharply increase.

    Although Minnesota gas utilities were able to provide natural gas to their customers during the storm, they paid a lot of money to make that happen – approximately $660 million. CUB and other parties argued that the utilities shouldn’t be able to recover all of that because they did not act “prudently.” Basically, this means the utilities should have acted differently with the information they had, which would have reduced costs for customers. The Public Utilities Commission (PUC) agreed with us, and prevented the utilities from recovering approximately $60 million. As mentioned in this blog post, the PUC recently affirmed that decision. Although we are happy that utilities are not able to pass those costs onto customers, you will likely still see a surcharge on your bill. That’s because although the utilities were prevented from recovering approximately $60 million, they were still allowed to recover the rest of the costs associated with the storm.

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