AG Ellison asks PUC to block utilities from charging Minnesota consumers some winter-storm gas costs

(FOX 9) - Minnesota Attorney General Keith Ellison is recommending the Public Utilities Commission block gas companies from charging consumers the increased gas costs they paid during February’s winter storm after an investigation found the companies could have reduced gas purchases during the price spike, but failed to do so.

Ellison is recommending the PUC disallow gas companies from charging $380 million to utility ratepayers in Minnesota, which represents nearly half of the approximately $800 million in higher costs utilities paid when the price of natural gas went up during Winter Storm Uri, according to a news release. The storm, which hit across the middle of the United States in mid-February, was responsible for increasing demand for natural gas and freezing natural gas wells.

Nationwide natural gas price surge could show up on your gas bill

State leaders are hearing from Minnesota utility and energy companies who were hit with millions of dollars in unexpected costs after natural gas prices soared due to bitter cold temperatures throughout much of the country.

Utilities typically recover their fuel costs directly from ratepayers, the AG’s office said. Following the storm, the PUC opened an investigation to review utilities’ actions during the pricing emergency.

The PUC requested comments from utilities and other stakeholders on the amount utilities should be allowed to recover as well as the mechanism for recovery.

Deadline for first round of comments about natural gas price spike is Friday

Winter storms that hit Texas and much of the south in February created a natural gas price spike, driving up the price of natural gas ten times more than normal in some parts of the state. Those costs will soon be passed to customers and the Minnesota Public Utilities Commission is collecting public comment to better understand the impact.

The investigation uncovered and documented the following ways Minnesota’s natural gas utilities failed to reduce the cost of natural gas they purchased during the price spike, according to the AG’s office:

Failing to reduce gas purchases by "interrupting" customers who have contractually agreed to a lower rate in exchange for the ability of the utility to require them to stop buying
Failing to fully utilize "peaker" plants, which can reduce the need for natural gas for short periods with liquid natural gas and propane
Failing to fully deploy natural gas held in storage to reduce the amount utilities needed to purchase during the price spike
Failing to notify the public of the price spike so that homeowners and businesses could voluntarily reduce their consumption
Failing to maintain a diverse mix of suppliers and pricing arrangements for natural gas that could have limited their dependence on high-cost sales.

The AG’s office has also asked that any amount the PUC does allow utilities to recover from the price spike be recovered over an extended period in order to keep bills low, and that the companies shield low-income customers from high bills.