Minnesota gasps at the financial damage it faces from the Texas freeze
Source: Washington Post
Minnesota gasps at the financial damage it faces from the Texas freeze
When Texas’ natural gas supplies froze up, prices soared, and now Minnesota’s customers are looking at an $800 million bill. One utility, headquartered in Houston, is taking an especially aggressive tack.
By Will Englund
April 22, 2021 at 6:00 a.m. EDT
When that big freeze hit Texas in February, the Lone Star State couldn’t help but share its pain.
With its ill-equipped natural gas systems clocked by the cold, Texas’s exports across the Rio Grande froze up and 4.7 million customers in northern Mexico went without electricity — more than in Texas itself. The spot price of gas jumped 30-fold as far west as Southern California. And all the way up by the Canadian border, gas utilities in Minnesota that turned to the daily spot market to meet demand say they had to pay about $800 million more than planned over the course of just five days as the Texas freeze-up pinched off supplies.
“The ineptness and disregard for common-sense utility regulation in Texas makes my blood boil and keeps me up at night,” Katie Sieben, chairwoman of the Minnesota Public Utility Commission, said in an interview. “It is maddening and outrageous and completely inexcusable that Texas’s lack of sound utility regulation is having this impact on the rest of the country.”
The Texas market is so large — second only to California’s — and its natural gas industry is so predominant that when things go wrong there, the impacts can be felt across the country. And in a state that eschews regulation, driving energy producers to cut costs as deeply as they can to remain competitive, things went spectacularly wrong the week of Valentine’s Day.
Minnesota’s biggest gas companies are putting forward plans to recoup their expenses by adding a surcharge to customers’ bills, which the state utility commission would first have to approve. Normally, such adjustments to account for winter prices go into effect in September, but Minnesota’s biggest gas utility, Houston-based CenterPoint Energy, says the financial pinch is so great it wants to start billing customers next month — and charging them nearly 9 percent interest until the extraordinary costs are paid off.
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Read more: https://www.washingtonpost.com/business/2021/04/22/minnesota-texas-freeze-centerpoint-energy/
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