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AG Ellison says Minnesota gas companies mismanaged rates in winter storm

(The Center Square) – Attorney General Keith Ellison is recommending the Minnesota Public Utilities Commission (PUC) reverse billing actions taken ty the state’s natural gas utilities last February when the companies passed on $380 million in increased costs to ratepayers. 

 2021 President’s Day weekend.

Citing comments filed with the PUC, his office said natural gas utilities could have lowered wholesale natural gas sales during the price spike but failed to do so. Instead, utilities acted as if there were no emergency while consumers bore the extra cost.

Ellison recommended the PUC disallow $380 million of costs — nearly half of the $800 million in higher costs Minnesotans paid when natural gas prices spiked during Winter Storm Uri on February 13, 2021.

“While Minnesota utilities did not cause Winter Storm Uri or the run-up in natural gas prices, they should have reacted forcefully to the pricing emergency and used every tool at their disposal to reduce costs,” Ellison said in a statement. “Instead, our investigation shows they did not take these steps and continued to purchase natural gas as if the emergency did not exist. Minnesota’s residential and small-business consumers should not have to pay for this mismanagement.”

Uri caused electricity blackouts in Texas due to freezing gas pipelines and coal supplies that fueled power plants while increasing demand for heat.

Utilities typically recover fuel costs directly from ratepayers. Ellison recommended denying some of the utilities’ costs after a PUC investigation.

The Residential Utilities Division of the Attorney General’s Office’s investigation uncovered several ways Minnesota’s natural gas utilities failed to reduce the cost of natural gas they purchased during the price spike, including:

  • 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; and
  • Failing to maintain a diverse mix of suppliers and pricing arrangements for natural gas that could have limited their dependence on high-cost sales.

Ellison’s office asked that any amount the PUC does allow utilities to recover from the price spike be recovered to keep bills low and that utilities shield low-income customers from high bills.


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