Why Are My Utility Bills Higher This Year?

Many factors affect what you pay for energy to heat and cool your home, and power the lights, appliances and electricity for your home.

The biggest change on your natural gas bill right now is the dramatic increase in market prices for natural gas. Minnesota imports 100% of its natural gas and state government does not control the price of the fuel. The fuel market is international, and many factors affect the natural gas market.

Why Has My Gas Bill Gone Up So Much Recently?

The United States, and Minnesota, have enjoyed relatively low natural gas rates for much of the past decade. However, over the last year the price of natural gas has increased significantly. This fuel cost increase is having sizable impacts on energy bills in Minnesota, and across the country. While the Minnesota Public Utilities Commission (PUC) regulates utility service, it does not control the price of natural gas.

In addition to the increased cost of natural gas, other costs have changed too. Many natural gas utilities have requested that the PUC allow them to increase their rates and interim (temporary) rates have gone into effect while the PUC reviews the utilities’ rate increase proposals. Additionally, the extraordinary fuel costs associated with Winter Storm Uri that hit the US in February 2021 appears as an additional charge on utility bills. Lastly, during the winter households generally use more natural gas to heat their homes.

Quick Links To Topics That May Be Important To You

Understand your utility bills

Make your voice heard about proposed increases to your utility bills

Find options to help pay your utility bills

Understanding Your Natural Gas Bill

The chart below shows a SAMPLE winter natural gas bill for an average residential home.

55% - Cost for Natural Gas

The actual cost for natural gas accounts for more than half your natural gas bill. By state law, utilities can only charge the actual market cost of the gas, including costs to transport the gas. Utilities cannot mark up the cost of natural gas.

5% - Winter Storm Uri

Between February 12 to 17, 2021 Winter Storm Uri hit the US. During this time, wholesale prices of natural gas increased dramatically. Minnesotans were able to keep their lights on and their homes warm during the storm, but utilities spent over $650 million on natural gas during the storm. The PUC has limited how quickly those costs can be recovered and is currently investigating whether the amount spent by utilities was reasonable.

25% - Delivery and Transportation Charges

Transportation and delivery costs of getting natural gas to your home. This charge also includes administrative costs and utility investments.

5% - Interim Rate Increase

When a utility asks to increase rates, state law allows the utility to charge customers an interim rate, or temporary rate, while the Commission evaluates that rate increase request. In 2021, many of the state’s regulated natural gas and electric utilities asked the PUC to increase the energy rates charged to customers, but not all utility companies asked for rate increases. If the PUC ‘s final decision results in a rate increase that is lower than interim rates, the difference with interest is refunded to customers. If the PUC approves final rates that are higher than interim rates, the utility cannot charge customers the difference.

10% - Fixed Charges

These charges are about $9 to $15 per month and cover costs for things such as metering, billing, customer service and other administrative items.

What Is the PUC Doing About This?

During Winter Storm Uri, the price of natural gas went up significantly between February 12 and February 17, 2021. Immediately following the storm, the PUC held a special planning meeting on February 23, 2021 and ordered an investigation into whether the decisions utilities made about gas prices were reasonable. The State’s on-going investigation focuses on four natural gas utilities regulated by the PUC: CenterPoint Energy, Great Plains Natural Gas Co., Minnesota Energy Resources Corporation (MERC), and Xcel Energy. The PUC will use its regulatory authority to determine if the decisions made by utilities during the storm were reasonable and what money the utilities spent can be recovered, meaning added on to utility ratepayers’ bills.

The PUC is also reviewing rate increase proposals from CenterPoint Energy and Xcel Energy. As allowed under law, the interim (temporary) rates have been gone into effect while the PUC reviews these rate increase proposals. The PUC will make its final decisions about the proposals later in 2022.

What Is the Department of Commerce's Role?

Under state law, the Minnesota Department of Commerce (Department) represents the best interests of Minnesota utility ratepayers in matters that come before the PUC. The Department is participating in the legal investigation on behalf of Consumers. Other agencies also advocate for consumers in these matters.

Make Your Voice Heard

Learn more about the PUC process and how you can get involved on the PUC website: mn.gov/puc/get-involved/

If you are concerned about increases to your natural gas bill, you can make your voice heard by filing a comment with the PUC or attending a public hearing.

Here is a video on how to get involved on Minnesota Public Utilities Commission YouTube channel: HOW TO GET INVOLVED

To follow the PUC’s actions, you will need to know the PUC docket number for your natural gas utility

Winter Storm Uri - Natural Gas Prices Docket Number 21-135
CenterPoint Energy Winter Storm Uri Price Spike – Docket Number 21-138
Great Plains Winter Storm Uri Price Spike – Docket Number 21-235
MERC Winter Storm Uri Price Spike – Docket Number 21-611
Xcel Energy Winter Storm Uri Price Spike – Docket Number 21-610

Find Options To Help Pay Your Utility Bills

Need help to pay your utility bill? You shouldn’t have to choose between paying your energy bill and buying groceries or paying for prescription drugs. There are several programs that can help with your electric or natural gas bills:

Energy Assistance

Minnesota’s Energy Assistance Program, based at the Minnesota Department of Commerce, offers up to $2,000 to cover your costs for heat, power and water, and is free to households with eligible incomes. Both renters and homeowners can qualify.

Go to mn.gov/home to:

Get an application
Find your local Energy Service Provider to help you apply
Check if your income would qualify

Weatherization Assistance

With one application to Minnesota’s Energy Assistance Program, you could qualify for the Weatherization Assistance Program for free home energy upgrades that will permanently reduce your energy costs.

The program is for income-eligible homeowners and renters. It will help you save energy and will help make sure your home is a healthy and safe place to live.

Nonprofit Programs

Learn about Salvation Army HeatShare to help you stay warm.

United Way 2-1-1 is a free service that can help you find agencies and resources to help you if you are in crisis or have emergency needs for food, shelter, utilities, or mental health.

Utility Company Programs

Get help paying your gas bill with your utility’s Gas Affordability Program and other assistance programs:

Set up budget billing with your utility, where you pay the same amount each month based on your average monthly natural gas bill.

Minnesota Public Utilities Commission

Visit the PUC website or contact the Commission’s Consumer Affairs Office at consumer.puc@state.mn.us or 651-296-0406 / 1-800-657-3782.

While this information is generally applicable to utility customers throughout Minnesota, not all utilities are regulated by the PUC, and there is variation across utilities. For specific questions, you should contact your utility provider.

Ask for Help

The PUC might be able to help if you are having problems with your utility service. If you are having a problem, need help, or want to make a complaint against your utility provider, you can contact our consumer affairs office and they will try to help. Your information will be kept private, and our team of professional mediators will work with you and your utility to try and resolve the problem.