Utilities give more leeway on heat bills

11/12/2005

BY BILL SALISBURY
Pioneer Press

Minnesota’s two largest utilities will not shut off heat this winter to low-income individuals and families who contact them and ask for help.

At a time when energy prices are expected to increase significantly, officials from CenterPoint Energy and Xcel Energy, which serve 85 percent of the state’s residential heating customers, announced Thursday their utilities would give 9,000 to 10,000 low-income households more leeway in paying their heating bills this winter under a new agreement with the state of Minnesota.

Gov. Tim Pawlenty and the utilities unveiled the agreement during a news conference at Battle Creek Environmental Magnet School in St. Paul. Pawlenty said he would ask other, smaller utilities to agree to similar terms.

“We need to make sure that no Minnesotans are left in the lurch, that people do not have their heat cut off this winter, and this agreement will certainly help achieve that goal,” Pawlenty said.

The arrangement relaxes the state’s current cold-weather rule, which allows low-income customers to set up payment plans that limit their monthly heating bills to no more than one-tenth of their income. The agreement would let them arrange to pay less than 10 percent of their earnings during the winter months.

Those consumers also are eligible for federal heating-assistance grants. Gary Cerny, CenterPoint president and chief operating officer, said low-income customers could arrange to pay as little as $5 or $10 a month, in addition to the amount paid by the government, to keep their heat on. But he and Xcel Vice President David Sparby stressed that customers must contact the utilities in advance to avoid a shut-off.

“There is not one reason why a low-income family should be left out in the cold this winter,” Cerny said.

To be eligible for the help, a family cannot earn more than half the state’s median income, or $38,000 for a family of four.

In addition to the utility agreement, Pawlenty announced the state will spend an additional $13 million in federal welfare money on low-income heating aid this winter. That funding is on top of a $70 million federal Low Income Home Energy Assistance Program grant that the state received in September. The extra $13 million comes from a welfare bonus the state received for placing low-income people in jobs and providing food stamps to more needy families.

Last year, the heating-assistance program served 118,000 Minnesota households with an average grant of $400 for the year. Pawlenty said the additional money would enable the state to serve 126,000 households (a 7 percent increase) at an average of $500 (a 25 percent boost) for the heating season.

Last week, Sen. Ellen Anderson, a St. Paul DFLer who chairs an energy committee, urged Pawlenty to call a special legislative session this fall to provide more assistance to low-income families and schools facing soaring heating costs. After announcing the new agreement with the utilities, Pawlenty said he doesn’t see a need for a special session.

Anderson said the agreement is a “good starting point.” She commended CenterPoint and Xcel for “living up to the spirit of the cold-weather rule,” and she welcomed Pawlenty to the effort to avert a winter heating crisis.

But she expressed concern that the extra $13 million in heating aid will come from a fund that otherwise would be used to provide food and shelter to low-income families. And she said that after a cut in federal heating grants, “this will just get us to where we were last year.”

Pawlenty said he expects the federal government to provide more low-income heating aid this season.

The new agreement appears to reinforce one that Attorney General Mike Hatch reached with CenterPoint in September, said Hatch spokeswoman Leslie Sandberg. As part of his effort to get the utility to restore natural-gas service to customers who were disconnected after falling behind on their bills, CenterPoint also agreed not to disconnect low-income households during the coming heating season. In addition, Sandberg said, most other utilities had voluntarily made similar agreements.

“It’s a win,” she said of the agreement that Pawlenty announced. “Imitation is the sincerest form of flattery.”

Hatch, a DFLer, will run for governor against Pawlenty, a Republican, next year.