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.
“As a result of the Polar Vortex, we’re hearing from Minnesotans and seeing bills showing gas prices jump from five to ten times consumers’ usual fee,” Senator Bill Ingebrigtsen (R-Alexandria) said. “That type of change is unprecedented and crushing when you take the time to think of how that eats into a family’s or business’s budget. To protect consumers, the Senate today passed emergency relief ensuring that our utilities have the much-needed flexibility to dilute these costs over time.”
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.