Legislature hears bill for relief after natural gas cost spikes

A bill heard this week in the Energy and Utilities Committee would provide relief to Minnesota consumers and the state’s municipal utilities after unprecedented spikes to the cost of natural gas caused energy bills to skyrocket during the February 2021 polar vortex. 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.

As a result, municipal utilities in the state are struggling with cash flow issues to pay their bills to gas suppliers, and Minnesotans statewide will now be on the hook for an additional $200 – 600 or more in energy surcharges for the next 12 – 16 months. This comes amidst a pandemic when many Minnesotans are already facing financial hardships and economic uncertainty, meaning many households will struggle to accommodate the extra costs, but especially low-income Minnesotans and Minnesotans on fixed incomes.

The bill heard this week would establish an emergency loan account for municipal utilities that had to purchase extra gas for demand during the polar vortex; these loans would be issued with zero interest for up to five years. Another provision in the bill would establish a low-income assistance program to provide bill credits for low-income households to defray a portion of the elevated costs incurred during the arctic front. Eligible households include those who have received assistance from the federal Low-Income Heating and Energy Assistance Program (LIHEAP) between October 2019 and September 2021, any household that has participated in a payment agreement under the state’s cold weather rule or a budget billing plan, and any household that has either missed two or more utility payments or submitted two or more partial payments since October 2020.

The proposal has broad bipartisan support and was passed out of committee without opposition. It was sent to the Finance Committee, where it will be heard next. (SF 2132)