St. Paul Minnesota – In response to the historic natural gas price spike caused by the 2021 polar vortex, the Commission approved a plan to reduce the overall costs, mitigate the ratepayer impacts, and continue its investigation into the costs incurred during this winter event. After considering recommendations from consumer advocates as well as from the regulated utilities, the Commission decided to spread cost recovery incrementally over a period of time while conducting an examination of the reasonableness of these costs.
“Without our action today, customers would have paid hundreds of millions in additional costs over the next year. Considering the ongoing pandemic, this decision is deeply consequential for ratepayers. Further examination of the costs incurred during the polar vortex is necessary to ensure utilities acted in a reasonable manner, said Chair Katie Sieben.
The plan includes a measure exempting low-income residential customers who received Energy Assistance, or who are 60 to 120 days behind on natural gas bills from the extra charges resulting from the natural gas price spike. The commission Commission urges consumers to continue applying to the Energy Assistance program, or to enter a payment plan to avoid disconnection. More information on how to apply can be found
here. The Commission’s Consumer Affairs Office (CAO) is available to answer questions and to provide consumer mediation services at 651-296-0406, 1-800-657-3782, or at
consumer.puc@state.mn.us.
Natural gas utilities normally recover the cost of fuel through an Annual Automatic Adjustment (AAA) that is established on September 1 each year. The Commission’s action today allows normal costs to be collected through the automatic adjustment, but limits recovery of extraordinary costs through a different mechanism. The Commission ordered a contested case hearing to evaluate whether the utilities acted reasonably during the price spike event, and whether the extraordinary costs are reasonable. To ensure that Minnesota is prepared for future weather events, the Commission also directed the creation of a public stakeholder group to evaluate policy and rule changes that could protect Minnesota ratepayers from future potential weather-related price spikes and market disruption.
“Today, we came together to develop a plan balancing utility recovery of regular expenses as required by Minnesota law, while addressing the economic burden caused by the gas price spike. We will continue working to ensure that the extraordinary expenses incurred by the regulated gas utilities during the polar vortex are reasonable,” said Commissioner John Tuma.
About the PUC:
The Minnesota Public Utilities Commission regulates three cornerstone service industries in Minnesota's economy: electricity, natural gas, and telephone service. The Commission’s mission is to create and maintain a regulatory environment that ensures safe, adequate, and efficient utility services at fair, reasonable rates consistent with State telecommunications and energy policies. It does so by providing independent, consistent, professional, and comprehensive oversight and regulation of utility service providers. Learn more at:
mn.gov/puc.
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