Winter Storm Uri prompted meaningful changes for Minnesota gas utilities — but there's more to be done 

In February 2021, Winter Storm Uri wreaked havoc across a large portion of the United States—particularly in Texas and other southern states, where unusually cold temperatures caused gas and utility infrastructure to literally freeze up. The blackouts that ensued were devastating: hundreds of people died in Texas alone during the storm. Fortunately for Minnesotans, our utility infrastructure was better equipped for the cold; we did not experience widespread blackouts, despite temperatures being far colder in Minnesota than in Texas. However, Minnesotans still experienced significant financial consequences as a result of the storm.  

The storm caused natural gas infrastructure to freeze in southern states just as demand for gas spiked as people across the country burned more gas than usual to heat their homes. Meanwhile, this imbalance in gas supply and demand occurred over the President’s Day weekend when gas markets were closed an extra day. This combination of factors caused gas prices to spike over the long weekend, and many gas utilities purchased gas at highly inflated prices. Minnesota’s four largest gas utilities—CenterPoint, Xcel Gas, MERC, and Great Plains— collectively incurred around $660 million in extra costs procuring gas for their Minnesota customers during that period. To put that into context, CenterPoint (Minnesota’s largest natural gas utility) reported that they paid more in five days procuring gas for their Minnesota customers than they had in the entire previous year. 

After the storm, the Minnesota Public Utilities Commission (“PUC”) opened an investigation to determine whether the utilities should be permitted to pass those extra costs on to their customers. Ultimately, after a long and complex legal proceeding, the PUC disallowed recovery of about 10% of those costs. Though CUB, the Department of Commerce (“Department”) and the Office of the Attorney General (“OAG”) argued for a much higher disallowance, CUB was grateful for the PUC’s decision. Such disallowances are rare, and Minnesota’s PUC took a much stronger stance than utility regulators in other states. In Oklahoma, Texas, and Arkansas, CenterPoint was permitted to recover the full amount of its storm-related extraordinary costs, with interest. 

Despite the PUC’s actions, many Minnesotans were understandably disappointed to learn that the gas utilities were permitted to recover the vast majority of their Winter Storm Uri-related costs through rates. Indeed, many Minnesotans still see a slight surcharge added to each monthly gas bill as these utilities continue to gradually recover their Winter Storm Uri costs over an extended time period.  

What have we learned from Uri? 

By disallowing the recovery of some storm-related costs, the PUC sent a strong signal to the gas utilities: be better prepared next time. The PUC also required the gas utilities to propose forward-looking plans, wherein CUB and other parties identified key opportunities to modify and improve their policies and practices based on what was learned during Winter Storm Uri.  

Through this process, the utilities reevaluated their gas procurement practices and how they use storage and/or peak shaving resources to reduce gas purchases during price spike events. The utilities also explored calling on customers to curtail usage during extreme events to lower the need to purchase gas at inflated prices. In the years since Winter Storm Uri, the PUC has required each of the four gas utilities to submit annual compliance filings to tracking these efforts. The PUC also required utilities to make a public filing within fourteen days of gas market prices spiking above a certain dollar threshold to report on the utilities’ actions to mitigate financial harm associated with that price spike. (These and other requirements are included in an order the PUC issued on February 17, 2023.) 

A storm over the 2024 Martin Luther King Jr. triggered the PUC’s price spike filing requirement. Though that 2024 weather event (and the price spike it created) was not as severe as Winter Storm Uri, it presented a useful opportunity to assess how the gas utilities applied learnings derived from Winter Storm Uri during similar conditions. Both the Department and OAG conducted thorough analyses of the utilities’ compliance filings submitted after the 2024 storm. These analyses were shared in comments filed with the PUC earlier this month.  

We were encouraged to see both agencies observed that each of the gas utilities made some improvements that helped them avoid meaningful costs during the 2024 storm that may not have been avoided previously. This is a good sign, as these improvements benefit both the utilities and their end-use customers. On the other hand, the OAG observed that additional opportunities for improvement remain. In particular, the OAG argued that the utilities could still do more to encourage residential customers’ voluntary conservation during extreme weather and/or pricing events. The OAG also observed the utilities should more proactively call on interruptible customers to curtail usage during those events. (Interruptible customers are typically commercial or industrial customers that pay a discounted rate in exchange for limiting their gas usage on short notice when a utility calls on them to do so.) 

CUB filed brief reply comments thanking the OAG and the Department for their analysis. We supported several recommendations first introduced by the OAG: 

• The PUC should require the gas utilities to annually report on how they are (1) improving incorporation of curtailment calls into their gas supply planning for both reliability and economic purposes; and (2) improving interruptible customer compliance with curtailment orders.
• The PUC should otherwise require the gas utilities to continue reporting on their progress meeting several other requirements established in the PUC’s February 17, 2023 Order.
• The PUC should deny a request by CenterPoint to increase the price spike reporting threshold such that it would be triggered less often. 

Sometime in early 2025, the Commission will hold a hearing considering these recommendations and taking further action. We are encouraged by changes made by the utilities and hopeful the PUC will continue to hold them accountable for doing all they reasonably can to protect their customers during extreme weather and price spike events moving forward.