Lawmakers Advance Bills To Help Offset Natural Gas Costs Due To February Surge
ST. PAUL, Minn. (WCCO) -- Proposals getting bipartisan support in the Minnesota Legislature would help offset increased natural gas bills for low-income Minnesotans triggered by the February polar vortex, which caused supply disruptions and a surge in demand that led to skyrocketing prices.
The severe weather event cost utility companies hundreds of millions of dollars. For CenterPoint Energy alone, that cost was $500 million over a 10-day period in mid-February, one-and-a-half times greater than the company's entire gas costs for the previous fiscal year.
The spike translates to an estimated extra $200 to $400 on Minnesotans' gas bills this year. CenterPoint has proposed its own way, a two-year payment plan, to blunt the financial burden.
"Millions of Minnesotans will see dramatic financial impacts," said Minnesota Public Utility Commissioner Katie Sieben.
The legislature is evaluating solutions of its own. Bills in the House and Senate — sponsored by a Democrat and Republican, respectively — that advanced this week would help low-income Minnesotans shoulder the additional financial burden at a time when they are already struggling due to the pandemic.
The House proposal, sponsored by Rep. Jamie Long, DFL-Minneapolis, that advanced Wednesday would provide $100 million for low-income Minnesotans for credits toward their bills. Sen. David Senjem, R-Rochester, removed $100 million from his Senate bill on Thursday and left it blank, saying the number is a best guess and an amount will be assessed and added later in the legislative process.
Minnesota families would qualify under the following circumstances:
- Those who receive assistance from the federal Low Income Home Energy Assistance Program, known as LIHEAP
- People who make under 50% of state median income and are on payment plans to Minnesota utilities since March 2020
- People who have missed two or more bills since October 2020
"Many families have had to make the difficult choice to defer utility bill payments during this time," said Bill Grant, executive director of Minnesota Community Action Partnership. "The gas price spike surcharge will only add to this misery."
The Minnesota Department of Commerce doubled its energy assistance from $600 to $1,200 for qualifying low-income households following the February deep freeze. Last year 118,000 Minnesota households received the aid, according to the department.
The legislative proposals would allocate $15 million for zero-interest five-year loans to help municipal utilities defray costs that could hit consumers as early as this month. For state regulated utilities like CenterPoint and Xcel Energy, those surcharges will appear later.
"Municipal utilities have bills to pay. They're going to have to seek other options if in fact we can't make this happen," said Senjem. "So there is some degree of urgency to this."
Kris Manderfeld, utility director for New Ulm Public Utilities, testified to a Senate committee on Thursday that her city, population 13,500, saw a January gas bill from its supplier for $727,000. In February, those costs soared to over $7.5 million.
"That's a huge increase in the cost of natural gas for one month," she said, adding that her New Ulm Public Utilities also help out with utilities in smaller communities of 1,100 people. "Just the three small towns that New Ulm Public Utilities works with saw an increase in their gas supply cost of over $900,000."
"That's a lot of money for just a 1,100 population."
Current proposals are funded by state money, but billions flowing to Minnesota from the recent $1.9 trillion federal COVID stimulus plan could cover the expense.
Separately, the Minnesota Public Utilities Commission and the Federal Energy Regulatory Commission are investigating the spike in natural gas prices and examining its impact.
