MINNEAPOLIS (WCCO) – Dangerously cold temperatures in mid-February had a chilling effect on natural gas prices, costing CenterPoint Energy, the state’s largest natural gas company, $500 million in just 10 days and nearly doubling customer bills as a result.
CenterPoint said supply disruptions plus a surge in demand due to the bitter cold triggered “extraordinary” costs from February 12 through February 22, according to a filing to the Minnesota Public Utilities Commission.READ MORE: BCA En Route To Scene Of Officer-Involved Shooting In Brooklyn Center
For context, the $500 million incurred during that small window of time is a 56% increase from the previous reporting year July 2019 to June 30, 2020, which cost CenterPoint $320.7 million.
The natural gas price surge translates to an estimated extra $354 annually for Minnesota CenterPoint customers. Average bills for residential customers each year are about $672, the company said.
Annie Levenson-Falk is the executive director of the Citizens Utility Board, a watchdog group for consumers.
“The increases we’re looking at are astronomical,” said Levenson-Falk.
To offset the costs, CenterPoint pitched to the Minnesota Public Utilities Commission spreading out payments over two years to make it more affordable to customers. The extra charges would accrue interest for a total cost of $394 over 24 months.
“We want to ease the impact on customers by recovering the cost over two years rather than the one year that would otherwise occur,” a spokesman for CenterPoint said in an email.
According to the filing, CenterPoint serves 890,000 Minnesotans, 92% of whom are residential customers.
Levenson-Falk said the impact will be felt far and wide as the surge comes on top of a pandemic year that’s resulted in people owing between 66 and 277% more in unpaid bills than a typical year.READ MORE: 6 Hospitalized For CO Poisoning In St. Paul
“The effect of this gas price spike now is just going to mean more people are going to have trouble affording their natural gas bills and people that are already struggling are likely to fall further behind,” she said.
The CenterPoint plan would spread out the costs to customers over two years with smaller payments in 2021 because of the pandemic. Starting in May through October, customers would see an extra $15.62 per month. That extra charge will decrease to $6.25 from November to April 2022, since bills are typically higher during the cold months.
The highest rate would come at an additional $31.25 from May to October 2022, and then from November 2022 to April 2023, the charge would be $12.50.
Those monthly amounts would cut in half for lower-income customers.
Under the current framework for recouping costs, which would be paid monthly over a year, the extra payment would vary most months starting in September and climb as high as $68.05 in January 2022.
The Minnesota Public Utilities Commission is conducting an investigation to examine the impact of the national spike in prices on customers and the state’s gas utilities and look for ways to mitigate the costs. Separately, a federal commission is launching a probe into the surge, which Minnesota Sen. Tina Smith supported.
Meanwhile, the Minnesota legislature is weighing proposals that would create a loan program to offset costs for municipal utilities, which could increase consumers’ bills as early as this month.
Levenson-Falk said it’s a “time sensitive” matter that has the support of her organization and others. The bill would also establish a relief program for low-income Minnesotans in the form of credits that would help with monthly charges.
“Action by the legislature is appropriate to relieve some of the enormous burden that will be felt by Minnesotans, particularly low-income families,” Levenson-Falk and two other groups said in a letter to lawmakers.MORE NEWS: For Derek Chauvin's Defense Attorney Eric Nelson, It's All About Raising Doubt
The first hearing on the bill in the House is Wednesday evening.