SAINT PAUL, Minn. – Today, the House approved a package of new tax credits and rebates to help Minnesotans who are struggling with rising costs. The legislation included a provision 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.
“Families and businesses in our region felt a harsh impact during last year’s polar vortex. Despite the weather event occurring over a thousand miles away, a sudden spike in natural gas prices left municipal utility customers holding the bag,” Rep. Sandstede said. “The massive price increase couldn’t have come at a worse time considering all the COVID-related difficulties our businesses and families were already navigating. I’m grateful our House Tax bill includes this significant relief to help people in Hibbing and other municipal utility customers. As the bill now goes into conference committee with Senate Republicans – who I hope will remain fully engaged in the session’s remaining weeks – I urge them to support this critical assistance to ratepayers.”
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 $20 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.
Video of today’s floor session will be available on House Public Information Services’ YouTube channel.