Duluth residents should be spared natural gas bill spike

City-owned utility locked in price before cold wave.

February 24, 2021 at 8:54PM
Natural gas prices are heading up. burner in natural gas water heater
Duluth residents should not expect the increase in their natural gas bills that other Minnesota utilities are anticipating. (Star Tribune file/The Minnesota Star Tribune)

DULUTH – Thanks to ample supplies of natural gas locked in at a favorable rate, Duluth residents should not expect the increase in their gas bills that other Minnesota utilities are anticipating.

ComfortSystems, the city's natural gas provider, was protected from the recent spike in prices caused by winter storms in Texas, Duluth officials said Wednesday. If bills are higher than expected for February, it will more likely be due to the long stretch of subzero temps earlier this month.

Other city-owned gas providers, including those on the Iron Range, may not be so lucky.

"Most of the gas utilities in Minnesota — both municipal and investor-owned — were significantly impacted by the price spike," said Jack Kegel, chief executive of the Minnesota Municipal Utilities Association, which includes 33 gas utilities that have a combined 80,000 customers. "Virtually everyone I have spoken with is planning to pass the costs through over time. Nobody is going to run all the costs through next month's bill."

That's similar to what investor-owned utilities such as Xcel Energy and CenterPoint Energy said they would do after telling regulators that customers could see $200 to $400 in increased charges due to a steep increase in the market price of natural gas earlier this month.

The Minnesota Department of Commerce said prices increased 60-fold on Feb. 15 at the Ventura hub in Iowa, the primary delivery and pricing point of gas entering Minnesota.

Customers of Xcel and other investor-owned utilities won't see those charges until September, though municipal customers could see it sooner, Kegel said. Municipal customers could see similar "but not greater" increases in their bills, he added.

Brooks Johnson • 218-491-6496

Mike Hughlett • 612-673-7003

about the writers

Brooks Johnson

Food and Manufacturing Reporter

Brooks Johnson is a business reporter covering Minnesota’s food industry, 3M and manufacturing trends.

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Mike Hughlett

Reporter

Mike Hughlett covers energy and other topics for the Star Tribune, where he has worked since 2010. Before that he was a reporter at newspapers in Chicago, St. Paul, New Orleans and Duluth.

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