SAINT PAUL, Minn. – Today, the Minnesota House Climate and Energy Committee approved legislation authored by Rep. Julie Sandstede (DFL – Hibbing) to offer rebates to municipal utilities that faced extreme increases in the wholesale price of natural gas during last year’s Polar Vortex. The bill also offers tax credits for ratepayers who faced excessive energy costs during that five-day period. One such municipality the extreme weather event impacted was Hibbing, with power supplied by Hibbing Public Utilities.
“Over just five days last February, residents and businesses saw their energy costs spike 5,000 percent. One business saw a $40,000 increase in their monthly gas bill. Many constituents had to go on payment plans. With businesses and families already struggling due to COVID, this price hike couldn’t have come at a worse time,” Rep. Sandstede said. “With a $9.25 billion surplus, and with fuel prices still high, it makes perfect sense to use a portion of these dollars to help municipal energy consumers who were unfairly socked with sky-high energy bills. I’m fully committed to delivering the relief our community, and others with municipal utilities, deserve.”
With shorter contracts and purchase agreements than investor-owned utilities, HPU lacks the capacity or the cash flow to budget for such a sudden price hike. Moreover, as a municipal utility, HPU also doesn’t have the protections the Public Utilities Commission offers. HPU was left with no other option but to pass along the costs to ratepayers, the same people who serve as ownership of the utility.
The bill includes $35 million worth of municipal utility rebates. Municipal utilities will be able to apply to the Department of Commerce for a rebate equal to the utility’s natural gas incremental costs minus any payments of its incremental costs paid by natural gas customers. Further, the bill offers a refundable tax credit for Minnesotans impacted by the weather event and were forced to pay the increased cost for natural gas during February 12-17, 2021
The bill next goes to the House Taxes Committee. Video of the hearing is available on House Public Information Services’ YouTube channel. Documents from the hearing and other information is available on the committee webpage.