New Minnesota Natural Gas Rates

CenterPoint Energy filed a request to adjust rates in Minnesota

On November 1, 2021, CenterPoint Energy filed a request with the Minnesota Public Utilities Commission (PUC) to adjust the rates for natural gas distribution service to our customers in Minnesota. This proposal is known as a “rate case.”

The rate adjustment was requested in order to provide us with adequate revenue to comply with more stringent federal regulations and invest in the continued safety and reliability of our 14,000-mile pipeline system that serves the energy needs of more than 900,000 residential and business customers in Minnesota.

As part of the PUC rate case proceeding, an administrative law judge held two in-person public hearings and two virtual public hearings in February-March 2022 to provide customers with opportunities to comment on the rate request or related issues.

Minnesota Public Utilities Commission approved new rates

A settlement agreement between all parties in the rate case was filed with the PUC in March 2022. The PUC approved the settlement at a hearing on Sept. 23, 2022, resulting in an annual rate increase of 4.2 percent or about $48.5 million in annual revenues.

Under the final PUC order, the monthly Basic Charge for residential customers remains at $9.50 and the per therm Delivery Charge increases from $0.25357 to $0.28998.

The rate adjustment is not related to the Feb. 2021 natural gas price spike or current natural gas market prices.

Rates vary by customer

The approved rate adjustment affects individual monthly bills differently depending on natural gas use and customer class. For the average residential customer (using about 890 therms per year), the bill impact is an increase of about $2.70 per month, or $32.40 per year.

To see the impact of the rate adjustment on different customer classes, please see the tables included in the Final Rate Bill Insert.

One-time interim rate surcharge

Under state law, CenterPoint Energy was allowed to collect an interim (temporary) rate increase while the PUC considered our 2021 rate request. The interim increase of $42.4 million annually took effect on January 1, 2022. However, the PUC’s final decision in this rate case resulted in a total retail rate increase of $48.5 million annually.

Because the final approved rate increase is more than the amount collected during the interim rate period, the difference (without interest) extending back to the Sept. 23, 2022, PUC Order, is being added as a one-time surcharge on a customer’s bill in early 2023. This interim rate surcharge amount is applied across-the-board to all customer classes and results in a one-time cost of about $1.60 for a typical residential customer (based on average monthly use of 70 therms).

Your natural gas bill

Your bill contains three basic parts: Basic Charge, Delivery Charge and Cost of Gas. The Basic Charge and Delivery Charge recover the cost of providing utility distribution service to our customers. These two charges, along with other costs, make up about 40 percent of the typical residential customer’s bill on an annualized basis.

The Cost of Gas makes up about 60 percent of the typical residential customer’s bill on an annualized basis. The wholesale price of natural gas changes monthly, depending on market conditions. This price is passed on directly to customers with no mark-up, and CenterPoint Energy does not profit from the cost of the natural gas.