Minnesota's largest natural-gas providers — CenterPoint Energy and Xcel Energy — Monday asked regulators for a rate increase of about 6.5 %, in standard requests that this year would add to costs that are already soaring for other reasons.
Sharp increases in the commodity cost of gas are expected to boost bills during the heating seasons. And Minnesota gas consumers are being pummeled by monthly surcharges stemming from a huge gas cost run-up courtesy of a February storm.
"It's difficult for people to see their energy costs go up any more then they already are," said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota, an advocacy group for residential ratepayers.
With those energy burdens in mind — as well as a crowded docket before state utility regulators — Xcel offered a plan that would essentially postpone a rate hike for a year. CenterPoint has proposed a modified rate plan that would still raise costs but soften the hit.
CenterPoint, which has 884,000 Minnesota customers, filed for a rate increase with the Minnesota Public Utilities Commission (PUC) that would raise its revenue from ratepayers by $67.1 million, a 6.5% increase. The proposal would add $4.05 to a typical customer's monthly bill, CenterPoint said.
As rate cases take 18 months to adjudicate, CenterPoint has asked for interim rate increase of $51.8 million that would go into effect January 2022. The PUC typically grants interim rate hikes; if the final increase is lower than the interim increase, customers get refunds.
Xcel, which has 480,000 gas customers in Minnesota, filed for a rate increase of $35.6 million, or 6.6 %. That would increase the typical Xcel residential customer's bill by $5.12 per month, the company said. Xcel's interim rate request would raise bills by $3.95 in January 2022.
Also on Monday, Xcel filed with the PUC a so-called "stay-out" proposal, which would essentially postpone the rate case for a year and leave rates the same. In the stay-out, Xcel would defer depreciation, property tax and maintenance costs for later payment.
"This would give customers the ability to digest the extra costs on their gas bills and for us to focus on the electricity case," said Chris Clark, Xcel's president for Minnesota and the Dakotas.
Xcel — the state's largest electricity provider — last week filed for a three-year electricity rate case that would raise its revenues by $677.4 million. With the rate hike, Xcel's average residential customers would see a 19% increase in their electricity bills from 2022 through 2024, with the biggest expense hitting next year.
CenterPoint also proffered an alternative gas rate plan to the PUC. It would raise rates by $39.7 million, or 3.9%, resulting in a monthly bill impact of $2.83 per month for typical residential customers, not $4.05.
Customers of CenterPoint, Xcel and two other investor-owned Minnesota gas utilities are already paying down a $660 million gas tab stemming from a colossal February storm. A typical Xcel customer is paying an extra surcharge of about $10 per month; at CenterPoint, it's about $11 per month.
Those surcharges are far more than customers would pay for a typical rate increase.
To make matters worse, the U.S. Department of Energy expects U.S. household heating bills to soar by as much as 54% compared to last winter. Natural gas prices are about 70% higher than a year ago.
About half of Minnesotans' gas bills are determined by those commodity gas prices, which utilities don't mark up. The other half is underpinned by changes in utilities' rates, which must be approved by the PUC.
Both CenterPoint's and Xcel's new gas rate cases would pay for meat-and-potatoes pipeline and infrastructure improvements.
Xcel last filed a gas rate case in 2009. This January, Minnesota utility regulators granted CenterPoint a $38.5 million, or 4.7%, rate increase, nearly $24 million less than what the utility had sought.