Local senators approve plan to protect rural utility customers from price shock

Senator Julie Rosen

Senator Bill Weber

Last week, local state senators helped pass legislation to protect rural utility customers from price spikes resulting from the February polar vortex.

Last Thursday, the Minnesota Senate unanimously approved emergency legislation to protect Greater Minnesota taxpayers from increases in their utility bills related to the February polar vortex, which sparked unprecedented surges in Texas natural gas prices throughout the Midwest. The bill will provide zero-rate loans through a new Polar Vortex loan account to municipal gas utilities, nonprofit utilities owned and operated by 33 municipalities in Minnesota. The legislation provides $ 15 million from the state’s general fund for zero-interest loans to ensure consumers don’t see prices skyrocket on their next bill.

State Sens. Julie Rosen, R-Fairmont, and Bill Weber, R-Luverne, both voted in favor of the legislation.

“There are thousands and thousands of taxpayers across the state who are suddenly facing huge price increases on their utility bills due to the polar vortex,” said Rosen, who represents eastern Canada. Jackson County to the State Senate. “These interest-free loans will protect customers from massive price spikes and help municipal not-for-profit utility providers deal with an urgent economic crisis.”

“When we think of energy, I’m sure almost no Minnesotan thinks that a cold front in Texas could have a disastrous impact on Minnesota,” said Weber, who represents western Jackson County, said declared last Thursday. “Unfortunately, due to the vortex and the gas market fluctuations that come with it, this is exactly what we are seeing. Today’s bill provides much needed relief to our utilities and ensures they have the flexibility to protect consumers against bills of up to ten times their regular charges.

When the polar vortex occurred from February 12 to 17, the price of natural gas surged as demand increased and production shut down at facilities across the United States. The fluctuation in the market resulted in an unprecedented price spike, which started in Texas and spread across the Midwest. In Minnesota, all natural gas utilities fell victim to the increase, Weber said.

The results completely undermined the budgeting of some public services. During those five days, Weber said, costs increased so much that some utilities spent their entire gas purchase budget for the year.

Projections have shown that the residential impact ranges from $ 250 to $ 500 for a typical residence for those five days only. This could mean that a user who usually pays $ 40 per month could pay more than $ 400. A business that typically spends $ 12,500 per month on gas could face a bill of $ 125,000 because of the increase.

The Polar Vortex loan account would give municipal utilities the flexibility to pay their bills now while spreading consumer costs over the five-year repayment term. In turn, Rosen said, this would protect thousands of Minnesota families who have already faced financial uncertainty in the wake of the pandemic.

Minnesota’s largest natural gas supplier, Centerpoint, reported that a decatherm of natural gas fell from $ 3 to $ 263 in just over a week due to the polar vortex. Rosen said all natural gas suppliers were affected by the surge, which coincided with increased customer usage due to a cold snap in Minnesota around the same time.

Minnesota has two types of utilities: investor-owned natural gas utilities and municipal-owned gas utilities. IOUs can work with the Minnesota Public Utilities Commission by September to determine a plan that will keep their customers’ bills affordable. Munis does not have the same extended time frame, so invoices are already being sent to customers for the time of the price spike.

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