SF 2132

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 04/07/2021 09:20am

A bill for an act
relating to energy; establishing a loan program for municipal utilities paying
unusually high prices for natural gas in February 2021; establishing a program to
defray high natural gas bills from the February 2021 price spike for low-income
households; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin MUNICIPAL NATURAL GAS UTILITIES; 2021 POLAR VORTEX
LOAN ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of commerce.
new text end

new text begin (c) "Critical period" means the period beginning February 12, 2021, and ending February
17, 2021.
new text end

new text begin (d) "Incremental cost" means the average unit price a utility paid for natural gas purchased
for immediate delivery during the critical period, minus the average natural gas unit price
for wholesale natural gas the utility paid during the period between February 5, 2021, and
February 10, 2021.
new text end

new text begin (e) "Incremental volume" means the difference between the volume of gas a utility
purchased for immediate delivery in Minnesota during the critical period and the volume
of gas a utility distributed in Minnesota between February 5, 2021, and February 10, 2021.
new text end

new text begin (f) "Spot price" means the price paid per unit for an immediate delivery of natural gas.
new text end

new text begin (g) "Utility" means a nonprofit municipal utility established under Minnesota Statutes,
chapter 412, that (1) is owned by the city to which it provides service, and (2) sells natural
gas to retail customers in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Establishment of account; expenditures. new text end

new text begin The 2021 polar vortex loan account
is established in a special revenue fund. The commissioner must manage the account. Money
in the account may be used to make loans under this section and to pay the reasonable costs
incurred to administer this section.
new text end

new text begin Subd. 3. new text end

new text begin Purpose. new text end

new text begin The 2021 polar vortex loan account is established to alleviate cash
flow problems experienced by Minnesota municipal gas utilities that purchased natural gas
supplies for immediate delivery at unusually high prices during the extreme cold weather
in February 2021.
new text end

new text begin Subd. 4. new text end

new text begin Eligible applicants. new text end

new text begin A utility that purchased natural gas for immediate delivery
during the critical period to distribute the natural gas to Minnesota retail natural gas customers
is eligible to receive a loan under this section.
new text end

new text begin Subd. 5. new text end

new text begin Applications. new text end

new text begin (a) An applicant for a loan under this section must file an
application with the commissioner on a form developed by the commissioner. The application
must require an applicant to supply:
new text end

new text begin (1) the utility's incremental cost and incremental volume;
new text end

new text begin (2) evidence indicating the prices and volumes of natural gas purchased by the utility
during the critical period that the utility used to calculate the utility's incremental cost and
incremental volume; and
new text end

new text begin (3) any additional information required by the commissioner.
new text end

new text begin (b) The commissioner must develop procedures governing the filing of applications,
review of applications, and awarding of loans under this section.
new text end

new text begin Subd. 6. new text end

new text begin Loan terms; limits; repayment. new text end

new text begin (a) A loan made under this section must be
a zero-interest loan with a term not exceeding five years.
new text end

new text begin (b) The commissioner must determine the amount of a loan based on the information
provided in an application filed under this section. A utility's loan must not exceed the
utility's incremental cost multiplied by its incremental volume. The commissioner may
reduce the amount of loans proportionately if the demand for loan assistance exceeds the
funds available for loans.
new text end

new text begin (c) Loan principal repayments must be made to the commissioner. The commissioner
must deposit money received from loan principal repayments in the general fund.
new text end

new text begin Subd. 7. new text end

new text begin Use of loan funds. new text end

new text begin (a) A utility awarded a loan under this section must use the
loan funds to pay for natural gas purchased during the critical period for immediate delivery.
The utility must submit to the commissioner evidence that the full loan amount was used
to pay for natural gas as provided in this section. The evidence must be submitted to the
commissioner within ten days of the date the payment was made.
new text end

new text begin (b) A utility that is issued a loan under this section and that also receives funding from
another source that is meant to be used for the purpose described in subdivision 3 must
remit an amount equal to the additional funding received to the commissioner within ten
days of the date the utility received the additional funding or received a loan under this
section, whichever is later.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2. new text begin LOW-INCOME NATURAL GAS HEATING ASSISTANCE; 2021 POLAR
VORTEX.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Commission" means the Public Utilities Commission.
new text end

new text begin (c) "Commissioner" means the commissioner of commerce.
new text end

new text begin (d) "Cooperative association" means a cooperative association organized under Minnesota
Statutes, chapter 308A, that sells natural gas to retail customers in Minnesota.
new text end

new text begin (e) "Critical period" means the period beginning February 12, 2021, and ending February
17, 2021.
new text end

new text begin (f) "District heating system" means a nonprofit district heating system organized under
Minnesota Statutes, chapter 317A, that provides thermal energy in the form of steam or hot
water generated from natural gas to residential retail customers.
new text end

new text begin (g) "Eligible low-income household" means a Minnesota residential household that
consumed natural gas for space heating during the critical period and, as determined by the
utility providing natural gas service to the household:
new text end

new text begin (1) received federal heating assistance under LIHEAP between October 1, 2019, and
September 30, 2021;
new text end

new text begin (2) participated in a payment agreement with the utility under Minnesota Statutes, section
216B.096, 216B.097, or 216B.098, at any time since March 2020; or
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new text begin (3) has missed two or more utility bill payments or submitted two or more partial utility
bill payments since October 2020.
new text end

new text begin (h) "LIHEAP" means the low-income home energy assistance program under United
States Code, title 42, sections 8621 to 8630, and Minnesota Statutes, section 216C.02,
subdivision 1.
new text end

new text begin (i) "Municipal utility" means a nonprofit utility established under Minnesota Statutes,
chapter 412, that (1) is owned by the city to which it provides service, and (2) sells natural
gas to retail customers in Minnesota.
new text end

new text begin (j) "Public utility" means a public utility, as defined in Minnesota Statutes, section
216B.02, subdivision 4, that sells natural gas to retail customers in Minnesota.
new text end

new text begin (k) "Utility" means:
new text end

new text begin (1) a municipal utility;
new text end

new text begin (2) a public utility, including a public utility that is exempt from the provisions of
Minnesota Statutes, chapter 216B;
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new text begin (3) a cooperative association organized under Minnesota Statutes, chapter 308A; or
new text end

new text begin (4) a district heating system.
new text end

new text begin Subd. 2. new text end

new text begin Assistance program. new text end

new text begin (a) The commissioner of commerce must, in consultation
with utilities:
new text end

new text begin (1) develop and implement a program in which each public utility, upon approval by
the commission of a true-up mechanism for the cost of natural gas purchased by the public
utility during the critical period, and each municipal utility, cooperative association, and
district heating system, provides bill credits to eligible low-income households to defray a
portion of the elevated costs the household paid for natural gas the household consumed
during the critical period; and
new text end

new text begin (2) develop a methodology, based on utility purchasing data, utility consumption data,
and natural gas pricing information, to estimate the increase in natural gas bills of eligible
low-income households during the critical period.
new text end

new text begin (b) Each utility requesting assistance under this section must use the methodology
developed under paragraph (a), clause (2), to calculate the bill credit amount for each eligible
low-income household.
new text end

new text begin (c) The commissioner must, utilizing data presented in Public Utilities Commission
Docket No. 21-135 and data collected from utilities estimating the number of eligible
low-income households the utility serves:
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new text begin (1) allocate the appropriation in section 4 among public and municipal utilities,
cooperative associations, and district heating systems;
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new text begin (2) allocate assistance to individual municipal utilities, cooperative associations, and
district heating systems; and
new text end

new text begin (3) determine the amount of bill credits that eligible low-income households served by
municipal utilities, cooperative associations, and district heating systems receive under this
section and the timing, process, notice, and mechanisms utilities must use to issue the credits.
new text end

new text begin (d) The commission must, by order, utilizing the data presented in Public Utilities
Commission Docket No. 21-135, the commissioner's allocation of the appropriation in
section 4 to public utilities, criteria the commission deems necessary to target relief, and
filings the commission requests from individual public utilities, determine the amount of
bill credits eligible low-income households served by public utilities receive under this
section.
new text end

new text begin (e) A utility must comply with a request from the commissioner or the commission for
any additional data necessary to carry out the duties of this section.
new text end

new text begin (f) A bill credit issued under this section must not exceed a reasonable estimate made
using a methodology approved by the commissioner or as determined by the commission,
as applicable, and may be apportioned to an eligible low-income household over a period
of up to 12 months, or longer if deemed appropriate by the commission or the commissioner.
new text end

new text begin (g) The commissioner and the commission may proportionately reduce the amount of
a bill credit a utility provides to a customer under this section if the aggregated calculated
amount for bill credits exceeds available funds.
new text end

new text begin (h) The commission must, by order, determine the aggregate amount of bill credits each
public utility must provide to eligible low-income households and must provide a copy of
the order to the commissioner. Upon receipt of the order, the commissioner shall transfer
from the appropriation made in section 4, paragraph (b), the aggregate amount of funds
available for bill credits, as determined by the commission, to the applicable public utility.
new text end

new text begin Subd. 3. new text end

new text begin Eligible expenditure. new text end

new text begin The commissioner may make expenditures under this
section to:
new text end

new text begin (1) provide funds to utilities to issue bill credits to eligible low-income households;
new text end

new text begin (2) reimburse the Department of Commerce for the reasonable costs incurred to administer
this section; and
new text end

new text begin (3) reimburse the commission for the reasonable costs incurred to administer this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3. new text begin ADDITIONAL FUNDS.
new text end

new text begin (a) Any federal funds received by the state that are intended to provide relief from the
natural gas price spike experienced during the critical period must be deposited in the general
fund. To the extent that the appropriation in section 4, paragraph (b), meets the relevant
spending requirements of these federal funds, the appropriation is reduced by the amount
of the federal funds.
new text end

new text begin (b) Any funds awarded to the state as a result of a settlement or legal judgment regarding
price gouging or other malfeasance relating to overpayment for natural gas consumed during
the critical period must be deposited in the general fund and must be used to reduce the
amount of the appropriation made in section 4, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin APPROPRIATIONS.
new text end

new text begin (a) $15,000,000 in fiscal year 2021 is appropriated from the general fund to the
commissioner of commerce to make loans to eligible municipal utilities under section 1 and
to reimburse the commissioner for the reasonable costs incurred to administer section 1.
Any unexpended funds remaining at the end of the biennium cancel to the general fund.
new text end

new text begin (b) $....... in fiscal year 2021 is appropriated from the general fund to the commissioner
of commerce for transfer to utilities to fund bill credits to low-income households in
Minnesota that consumed natural gas during the spike in natural gas prices between February
12, 2021, and February 17, 2021, as described in section 2. This is a onetime appropriation.
Any unexpended funds at the end of the biennium cancel to the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end