CenterPoint, Xcel challenge decision forcing them to pay more of historic winter storm's costs

Minnesota's two largest gas utilities are challenging a state ruling prohibiting them from together charging consumers $55 million for costs incurred during a 2021 winter storm.

CenterPoint Energy and Xcel Energy on Tuesday asked the Minnesota Public Utilities Commission (PUC) to "reconsider" its August decision, which faulted the two utilities for their response to the storm.

Given that the PUC rarely rescinds its decisions, the move is likely a precursor to a challenge before the Minnesota Court of Appeals.

Great Plains Natural Gas, a small utility in western Minnesota, also filed a reconsideration petition with the PUC on Tuesday.

Wholesale gas prices in Minnesota and many other states soared in February 2021 when a historic storm hit Texas and other natural gas-producing states. Temperatures plunged, gas field equipment froze up and supply cratered just as demand climbed.

The state's four investor-owned gas utilities piled up $660 million in extra costs from the storm. Minnesota, like many states, allows utilities to directly pass down such wholesale price swings to ratepayers.

After the PUC's investigation, the utilities were prohibited from collecting about 9 % of that $660 million.

"These companies are challenging a decision that requires them to share a small portion of the burden with their customers," said Annie Levenson-Falk, head of the Citizens Utility Board of Minnesota (CUB), an advocacy group for residential ratepayers.

"We're not surprised that the utilities are asking for reconsideration," she said in a statement. "However, the evidence is clear that the utilities could and should have avoided those costs."

CUB, the Minnesota Department of Commerce and the Minnesota Attorney General's Office argued that the utilities mismanaged gas supplies during the storm and therefore should not be able to collect the full $660 million.

In August, the PUC rejected $35.7 million of the $409 million CenterPoint Energy incurred during the storm, $19 million of Xcel Energy's $179 million tab and $845,000 of $8.8 million in costs for Great Plains.

MERC, an arm of Milwaukee-based WEC Energy Group, signed a settlement agreement that disallowed $3 million of its $65 million in extraordinary gas costs from the storm.

The Commerce Department, the Attorney General's Office and the CUB had argued for even greater disallowances. However, two administrative law judges found the utilities were justified in collecting the full $660 million bill from ratepayers.

CenterPoint and Xcel noted the judges' decision in their reconsideration filings with the PUC. Both utilities, along with Great Plains, argued that their storm-related management decisions were "prudent" and that the PUC was inappropriately relying on "hindsight."

CenterPoint, the state's largest gas utility with about 900,000 customers, said in a filing that the PUC changed "the rules of service" simply because gas costs were abnormally high.

"The record demonstrates that CenterPoint Energy acted in good faith to balance reliability and cost objectives based on the information available at the time," the filing said.

Many Minnesotans will pony up 50% more than they pay annually for their heating bills just to cover the storm's gas costs, though the payments will be spread out over several years for CenterPoint's customers and Xcel's residential customers.