Members of the House committee on Climate and Energy and the Senate committee on Energy and Utilities met for a joint hearing late last week after it was reported natural gas prices had surged to unprecedented and astronomical levels the week prior. From February 12 to February 17, the cost of natural gas across the country rose to as much as 100 times or more than the typical purchase price, due to the arctic cold temperatures seen across much of the country. The joint meeting was called to hear directly from agencies and utilities and to brainstorm any potential actions that would need to be taken by the Legislature as a result.
The crux of the issue is twofold: nationwide increased demand due to cold weather and added difficulty in gas extraction within the supply chain due to cold weather both caused spikes in the spot market for natural gas, which is used to purchase supplemental natural gas when pre-purchased amounts are insufficient to meet the demand. As a result of these increases, some utilities were forced to spend their entire year’s budget within those five days, and the increased costs incurred will ultimately be passed along to Minnesota consumers over the coming months and year.
Minnesotans statewide will now likely be on the hook for an additional $200 to $400 – or in some cases even $500 or more – in energy surcharges in the next 12-16 months, which will be difficult for most Minnesotans to accommodate, especially low-income Minnesotans and those on fixed incomes. While there are financial assistance programs, such as the Commerce Department’s Low Income Energy Assistance Program and Weatherization Assistance Program, state and federal lawmakers are going to have to consider providing additional funding assistance to those who need it most.
Investigations into the matter are still ongoing at the state and federal levels, but House and Senate DFL members on the respective Energy Committees have begun to explore legislative solutions such as providing low- to zero-interest emergency relief loans for municipal utilities, providing direct consumer relief, and long-term solutions such as prohibitions on price gouging during emergencies.