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Story from Platts Gas Daily
Gas service cut to thousands of Minnesota homes
A weakening Minnesota economy has caused a surge in the number of CenterPoint Energy's residential gas customers who can't pay their utility bills and prompted an unprecedented number of service shut-offs, CenterPoint officials said last week.
"The reality is that utilities fall behind other priorities," company spokesman Rolf Lund said, noting that more residents are struggling to make rising home mortgage payments and buy expensive gasoline.
Records on file with the Minnesota Public Service Commission show that at the end of March, 25% of CenterPoint's customers, or 184,000, were behind in their payments. Of those, about 19,000 have been sent disconnection notices â 20% higher than a year ago.
Lund said the typical residential customer who received such a notice owes the company $1,500.
According to Lund, low- and middle-income customers in CenterPoint's Minnesota service territory are facing a double-whammy: record-high gasoline and lofty gas and electric bills. The Energy Information Administration said the price of Midwest regular gasoline has increased 21% since May 2006 to $3.313/gallon, while retail natural gas prices in the region, while down more than 30% from a year earlier, are still hovering at a historically high $8.80/Mcf.
Meanwhile, it has become more difficult for low-income customers to obtain federal financial assistance to pay their utility bills. Figures from the US Department of Health and Human Services show that the Low Income Home Energy Assistance Program funds allocated to Minnesota decreased from $110.848 million in fiscal year 2006 to $77.469 million in FY 2007.
Statistics on the number of Minnesota residents applying for aid this year were not available, but the National Energy Assistance Directors Association reported earlier this year that the state expected to serve 30,000 fewer households than last year.
Patrick Boland, supervisor of CenterPoint's personal accounts department, pointed out that the data filed with the PSC on customer arrearages was affected in part by changes in the company's record-keeping practices. Following the installation of a new billing system three years ago, CenterPoint was less assertive in taking action against people who had fallen behind in their payments, he explained.
Shut-off moratorium period extended a month
Boland also noted that the PSC amended its cold-weather rule, which prohibits utility shut-offs during the winter heating season, by extending the end date from April 15 to May 15. That change contributed to the increase in the number of people with past-due accounts, he said.
Another large Minnesota gas utility, Xcel Energy, is not releasing its data regarding customer arrearages because it is against company policy, spokeswoman Patti Nystuen said. She did note that there has been a 20% increase in the number of disconnections among its 321,000 customers in the state.
The state's other large gas utility, Minnesota Energy Resources, said that as of April, 4,374 of its 187,000 customers had been issued disconnection notices. Since March, the company has been urging customers with past-due bills to make arrangements quickly to true-up their accounts.
Burl Haar, the PSC's executive secretary, said regulators are aware of the increases in arrearages and shut-offs but are not now planning to open a docket to investigate the matter.
Meanwhile, representatives of the American Gas Association said the number of people who nationally have fallen behind in paying their gas bills is believed to have increased, although no recent statistics have been compiled.
They noted that utilities are reluctant to shut off service to customers because of the cost involved in reconnecting them. Utilities would much prefer to work out a payment plan, AGA spokeswoman Tracey Lynn Shifflett said.
Story from Platts Gas Daily
Gas service cut to thousands of Minnesota homes
A weakening Minnesota economy has caused a surge in the number of CenterPoint Energy's residential gas customers who can't pay their utility bills and prompted an unprecedented number of service shut-offs, CenterPoint officials said last week.
"The reality is that utilities fall behind other priorities," company spokesman Rolf Lund said, noting that more residents are struggling to make rising home mortgage payments and buy expensive gasoline.
Records on file with the Minnesota Public Service Commission show that at the end of March, 25% of CenterPoint's customers, or 184,000, were behind in their payments. Of those, about 19,000 have been sent disconnection notices â 20% higher than a year ago.
Lund said the typical residential customer who received such a notice owes the company $1,500.
According to Lund, low- and middle-income customers in CenterPoint's Minnesota service territory are facing a double-whammy: record-high gasoline and lofty gas and electric bills. The Energy Information Administration said the price of Midwest regular gasoline has increased 21% since May 2006 to $3.313/gallon, while retail natural gas prices in the region, while down more than 30% from a year earlier, are still hovering at a historically high $8.80/Mcf.
Meanwhile, it has become more difficult for low-income customers to obtain federal financial assistance to pay their utility bills. Figures from the US Department of Health and Human Services show that the Low Income Home Energy Assistance Program funds allocated to Minnesota decreased from $110.848 million in fiscal year 2006 to $77.469 million in FY 2007.
Statistics on the number of Minnesota residents applying for aid this year were not available, but the National Energy Assistance Directors Association reported earlier this year that the state expected to serve 30,000 fewer households than last year.
Patrick Boland, supervisor of CenterPoint's personal accounts department, pointed out that the data filed with the PSC on customer arrearages was affected in part by changes in the company's record-keeping practices. Following the installation of a new billing system three years ago, CenterPoint was less assertive in taking action against people who had fallen behind in their payments, he explained.
Shut-off moratorium period extended a month
Boland also noted that the PSC amended its cold-weather rule, which prohibits utility shut-offs during the winter heating season, by extending the end date from April 15 to May 15. That change contributed to the increase in the number of people with past-due accounts, he said.
Another large Minnesota gas utility, Xcel Energy, is not releasing its data regarding customer arrearages because it is against company policy, spokeswoman Patti Nystuen said. She did note that there has been a 20% increase in the number of disconnections among its 321,000 customers in the state.
The state's other large gas utility, Minnesota Energy Resources, said that as of April, 4,374 of its 187,000 customers had been issued disconnection notices. Since March, the company has been urging customers with past-due bills to make arrangements quickly to true-up their accounts.
Burl Haar, the PSC's executive secretary, said regulators are aware of the increases in arrearages and shut-offs but are not now planning to open a docket to investigate the matter.
Meanwhile, representatives of the American Gas Association said the number of people who nationally have fallen behind in paying their gas bills is believed to have increased, although no recent statistics have been compiled.
They noted that utilities are reluctant to shut off service to customers because of the cost involved in reconnecting them. Utilities would much prefer to work out a payment plan, AGA spokeswoman Tracey Lynn Shifflett said.
