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Regulators cut $60M from Minnesota utility customers' bills for 2021 storm

Severe cold weather across the southern U.S. in February 2021 sent energy prices soaring across the U.S. due to gas supply disruptions and a spike in demand. While the weather had a particularly severe effect on Texas’ power grid, customers in Minnesota ended up seeing significant increases in prices. Customers of the state's gas utilities ended up getting charged around $660 million more than they normally would in February.

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ST. PAUL — State regulators will require four Minnesota natural gas utilities to pay around $58.7 million in costs they incurred during severe winter weather in 2021, reducing the amount customers will have to bear.

Severe cold weather across the southern U.S. in February 2021 sent energy prices soaring across the U.S. due to gas supply disruptions and a spike in demand. While the weather had a particularly severe effect on Texas’ power grid, customers in Minnesota ended up seeing significant increases in prices. Customers of the state's gas utilities ended up getting charged around $660 million more than they normally would in February.

Attorney General Keith Ellison, the Citizens Utility Board and the state commerce department brought the matter before the Minnesota Public Utilities Commission one year ago, arguing the utility companies had not done enough to manage the price spike and overcharged customers. An administrative court earlier this year ruled the utilities could charge the full $660 million, but the utility commission voted Thursday, Aug. 11, for four gas utilities to eat nearly $60 million of that bill.

“Though Minnesotans were fortunate to receive reliable gas service during the February 2021 storm, the utilities spent millions more than they needed to on expensive gas, thinking that customers would foot the bill,” said Brian Edstrom, Senior Regulatory Advocate at the Citizens Utility Board, a customer advocacy group. “The PUC (Thursday) told them that this is unacceptable in Minnesota.”

Advocates argued the utilities failed to use backup gas reserves effectively, poorly forecast demand and did not cut off interruptible customers.

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Under the commission's decision, Xcel Energy must pay $19 million, CenterPoint Energy must pay $35.7 million, and Great Plains Energy must pay $845,000. The commission also approved a settlement where Minnesota Energy Resources Corp. must save its ratepayers $3 million that consumer advocates previously argued had been imprudently charged by the utility.

Ellison’s office said it is rare for state regulators to stop utilities from passing the full cost of gas to customers. One of the Minnesota attorney general’s duties is to advocate for residential and small business ratepayers.

“While this decision is a win for consumers, still too much of the utilities’ gas costs will get passed onto Minnesotans to pay,” Ellison said in a statement. “The utilities need to know my office will keep watching them and using our power under state law to fight to keep Minnesotans’ costs down.”

This fall, the commission will hold another hearing where it will consider methods to protect customers from future price spikes due to weather.

Alex Derosier covers Minnesota breaking news and state government for Forum News Service.
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