As costs rise, number of Minnesotans losing heat, electricity spikes

The number of Minnesotans who lost their heat or electricity this year because they didn’t pay their bills hit a 10-year high this year, as more people struggle with inflation and rising energy costs.

Minnesota’s investor-owned utilities are required to report to the state Public Utilities Commission how many people they disconnected due to unpaid bills. The Citizens Utility Board of Minnesota, a nonprofit that advocates for utility customers, tracks the data.

It found utilities disconnected more than 85,000 residential households from either gas or electric services this year. That’s more than any full year going back to at least 2015. And the numbers are only for January through October, so they could be higher by the year’s end.

The numbers do not include people who get their gas or electric service from their local city or a rural cooperative, which aren’t required to report their disconnections to state regulators.

One factor driving the increase is inflation. Families are already burdened with the higher cost of groceries, rent and other necessities. In many places, the cost of electricity, natural gas and propane is also higher. Several large utilities recently sought rate increases.

Utility customers are behind on their bills by about $100 million in total, about twice as much as before the COVID-19 pandemic, said Annie Levenson-Falk, executive director of the Citizens Utility Board.

“What I think this shows is that a lot of people are feeling squeezed, not just by the cost of energy, but that in combination with the cost of housing and other expenses,” she said.

During the pandemic, utilities suspended disconnections while people were confined to their homes. But since they’ve resumed, there’s been a steady increase in the number of people disconnected, Levenson-Falk said.

Minnesota’s rural electric cooperatives aren’t seeing big increases in disconnections, said Darrick Moe, CEO of the Minnesota Rural Electric Association. However, he said co-ops are sensitive to the energy burdens people face, which tend to be higher in rural areas where incomes are lower.

Preventing shutoffs

Consumer protection groups have been putting pressure on utilities to provide customers with reasonable opportunities to avoid involuntary shutoffs.

A University of Minnesota study released earlier this year that found racial disparities in disconnections by the state’s largest utility, Xcel Energy.

Consumer groups had raised concerns about Xcel's policy requiring customers to pay half their balance to reconnect service. They said that was too high of a burden. Xcel has been working with the study’s authors to better understand the causes of those disparities, said spokesperson Kevin Coss.

“Those disparities are rooted in many societal factors — such as long-standing and well-documented inequities in income, wealth, education, employment, housing and other factors across Minnesota — and we are doing our part to address them,” he said.

Xcel also agreed to provide more outreach to customers to help them avoid disconnection, reduce required down payments and Increase the time between when a notice is sent and actual disconnection, Coss said.

Also, consumer groups and utilities are teaming up to urge state lawmakers to expand the energy assistance program. It helps families below a certain income level pay their energy bills. There’s generally more need than there is money available.

“We think it’s important to try to fund those programs as adequately as possible to provide resources to people that are in the lower income scale to keep their keep their bills paid,” Moe said.

Consumer protections

Minnesota’s Cold Weather Rule prevents disconnections from October through April, if it would affect the household’s primary heating source.

But there’s a misconception that this is an automatic protection. The customer has to contact the utility and set up a payment plan. Otherwise, they can lose their service.

If someone is struggling to pay their bill, they should take steps to avoid a shutoff, including contacting their utility right away and talking to them about setting up an affordable monthly payment plan, Levenson-Falk said.

If they can’t come to an agreement with their utility, people can contact the Minnesota Public Utilities Commission to mediate on their behalf, she said.

“People do have to make sure that they’re on a payment plan, and they’re making timely payments on that to avoid shut off,” Levenson-Falk said.

Some utilities also will perform home energy audits to see if there are ways to reduce energy costs.

People can apply for energy assistance at mn.gov/energyassistance. Payments for energy bills are sent directly to the energy company or fuel provider. Benefits average $550 per household and can be up to $1,400, depending on household income and fuel costs.

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