Minnesota Senate adopts loan program for municipal utilities
Senators pushed for approval of the bill as utilities begin to tackle the effects of soaring natural gas prices resulting from the February nationwide cold snap. His immediate future in the House is unclear.
Speaking to fellow Senate colleagues on Thursday afternoon, Senator David Senjem, the author of the bill, described the legislation as the first step towards solving the problems presented by the wave.
“This is the beginning of the story, but it is an important start because our municipal utilities are almost desperately in need of our help right now,” he said.
In Minnesota as in other states, demand for natural gas soared last month amid the extreme weather episode that affected most of the United States. and cold struck gas processing plants and offline distribution systems.
Although they managed to avoid the multi-day power outages that cities in Texas and the South endured, Minnesota utilities still have high bills from their gas suppliers to contend with due to weather conditions. They are likely to pass the costs on to their customers in the form of hundreds of dollars in fees, spread over several months.
Faced with $ 500 million in costs associated with the surge, CenterPoint Energy, Minnesota’s largest natural gas utility, could begin to assess those costs over a two-year period starting in May, according to recent documents filed with state regulators. Other state-owned investor-owned utilities, which along with CenterPoint serve around 1.6 million customers, will likely start collecting them in September.
Some of the state’s smaller municipal utilities, which are regulated at the local level, have already started raising fees as their suppliers prepare to recover at least some of what they owe. Minnesota Municipal Utilities Association government relations director Kent Sulem said the loan program included in the bill passed Thursday could help them assess lower fees over a longer period.
“The more certainty we can provide, the more likely we are to get better terms with our suppliers,” Sulem said at a virtual committee hearing on Thursday.
Senators unanimously approved the $ 15million loan program by detaching it from the Senjem, R-Rochester Bill, originally drafted and grafting it as an amendment to a separate statute, which gives regulated utilities continued flexibility on how to recover infrastructure repair costs. Borrowers should apply for the loans, which would be taken out using money from the state’s general fund, through the Minnesota Department of Commerce.
The loans would bear no interest and would have to be repaid within five years.
But citing the urgent need for municipal utilities to meet their obligations, the Senate set aside a related aid program targeting low-income Minnesota households that Senjem included in the original bill, at least for now. . Lawmakers have yet to agree on the source and amount of funding for this program, which aims to help poorer Minnesotans pay the bills linked to February’s price spike.
Through a spokesperson, Representative Jamie Long, author of the Minnesota House Companion for Bill Senjem and chairman of the chamber’s finance and climate and energy policy committee, suggested that the deletion this program of the bill passed Thursday could hamper its progress. In a statement, he said the Senate “has only solved half of the problem by passing the No Taxpayer Relief Loan Program.”
“I hope we can continue conversations with the Senate to meet both of these needs, but today’s vote takes what could have been an easy victory with a bill that had passed overwhelmingly. by the two energy commissions and makes the way forward more difficult, “Long said DFL-Minneapolis.