With another Minnesota winter quickly approaching, memories of the harsh, cold weather and high heating costs experienced last season are still vivid. The good news this winter is heating costs should be significantly lower and a new state law will help consumers avoid the possibility of having their heat disconnected due to financial difficulties during the coldest months.
Natural gas prices in particular have fallen dramatically over the past few months. Late last year, wholesale natural gas prices hit a peak of $10 per unit, which was due largely to limited storage reserves and the high demand of a growing number of drilling program, and storage reserves have been substantially increased. As a result, wholesale natural gas prices have now fallen below $2 per unit for the first time since March, 1999.
This means Minnesota residents could see a 40 percent reduction in home heating costs this winter. If we have a normal winter, the heating bill for an average residential customer using natural gas is estimated to be about $550 for the five month heating season.
Although the price of gas always varies from month to month, and prices may never be as favorable as during the 1990s, the outlook this year is certainly more positive than last winter.
Additionally, as part of a comprehensive state Energy Security and Reliability bill passed earlier this year, the Legislature strengthened existing consumer protection provisions regarding possible disconnection of utility services.
Under the new law, all public utilities, municipal utilities and electric cooperative associations must offer their customers the opportunity to enter into a budget billing plan for payment of service charges.
Only municipal utilities having 3,000 or fewer customers are exempt from this requirement. In addition, utilities must also notify customers sufficiently in advance prior to making any changes in budget payment amounts. Utilities must also now offer a payment agreement to customers who have been incorrectly undercharged for services. The agreement payment period must cover a length of time at least equal to the time period the undercharge occurred. No interest or delinquency fee may be assessed as part of the agreement.
Minnesota’s existing cold weather disconnection law provides some protection to consumers from losing service during the winter heating season (Oct. 15 through April 15).
If you are a customer of a public utility such as Xcel Energy or Minnegasco and have a household income less than 50 percent of the state median income (which equals less than $33,339 for a family of four), and you pay the utility at least 10 percent of your income or the full amount of the utility bill, whichever is less, in a cold weather month, then you cannot be disconnected during that month.
Also, public utility customers who have demonstrated a valid inability to pay, and who make reasonably timely payments to a utility under a payment plan that considers the available financial resources of the customer’s household, cannot be disconnected from service between Oct. 15 and April 15.
If you are a customer of an electric cooperative association or a municipal utility and have a household income less than 50 percent of the state median income, you cannot lose service between Oct. 15 and April 15 if you have declared a valid inability to pay, are current for the billing period immediately prior to Oct. 15, or enter into a payment schedule that considers the financial resources of the household and is reasonably current with scheduled payments.
For more information on cold weather disconnection provisions, please contact your local utility or the Minnesota Public Utilities Commission. The commission can be reached by phone at 651-296-0406, or by e-mail at consumer.puc@state.mn.us. You can also visit the commission’s web site at www.puc.state.mn.us.
Mark Ourada (R-Buffalo) serves Senate District 19 which includes Annandale and Corinna Township as well as some other area townships.
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