On Thursday, the Minnesota Senate passed Senate File 1018 on the Senate floor. The bipartisan legislation establishes a 2021 Polar Vortex Loan Account for municipal utilities that purchased natural gas during the extreme weather that occurred across the U.S. this February. The bill provides $15 million from the General Fund for zero-interest loans for utility providers to ensure that consumers don’t see skyrocketing prices on their next bill.
“The Polar Vortex has had an unprecedented impact on Minnesota as the deep freeze’s effects have rippled out of Texas and spread across the Midwest,” Majority Leader Gazelka (R-Gull Lake) said. “Over the past few weeks, we’ve been having conversations with Minnesota utility providers to gauge its effect and see what the legislature can do to help. We know this is going to have a tremendous impact on consumers’ bills and the budgets of our utilities. Rather than let struggling Minnesota families get hit by an enormous bill, we’re ensuring Minnesota providers have the resources to provide flexibility, disperse the increases over time while also giving the legislature a larger window to craft further solutions to protect our residents.”
When the polar vortex occurred from February 12-17, the price of natural gas multiplied as demand went up and production halted at facilities across the U.S. The market fluctuation delivered an unprecedented price surge which began in Texas and has rippled across the Midwest. In Minnesota, all natural gas utilities were victims of this surge.
The results completely undermined the budgeting of some utilities. During these five days, costs ballooned so high that some utilities spent their entire gas purchasing budget for the year. Projections have shown that the residential impact ranges from $250-$500 for a typical residence for those five days alone. This could mean a user who usually pays $40 a month could be paying upwards of $400. For businesses, one example showed that their typical $12,500 gas bill had risen to $125,000 because of the spike.
The Polar Vortex Loan Account would grant municipal utilities the flexibility to pay their bills now while spreading consumers’ costs out over the five-year repayment term. In turn, this would protect thousands of Minnesotan families who have already faced financial uncertainty as a result of the pandemic.