CenterPoint Energy reached a settlement with several consumer advocate groups and government agencies that will keep residential bills around current levels and halve the amount of membership dues for a controversial gas association the company can pass on to customers.
The proposed settlement, filed with the Minnesota Public Utilities Commission (PUC) on December 4, will raise CenterPoint residential gas rates by 5.2% — or about $50 per year for most customers compared to 2023 levels. That’s around half of the 10.3% increase initially proposed by the company. But CenterPoint customers will see a small bill decrease from what they pay today because the PUC approved a 5.3% interim rate for 2024.
The settlement will slash the amount in membership dues CenterPoint can pass onto customers for belonging to organizations that lobby on behalf of the natural gas industry, a goal of consumer advocates and climate conscious groups who say those dues go against the public interest and state greenhouse gas reduction goals.
The PUC, a governor-appointed board that regulates utilities, still needs to approve the settlement, and is likely to vote on it in early 2025. CenterPoint is the largest gas company in the state, serving about 900,000 Minnesota households.
Clean Heat Minnesota, a coalition of energy justice and consumer advocacy groups, joined the Minnesota Attorney General’s Office to lobby against CenterPoint’s proposed rate increase. The group focused on reducing the amount customers will pay for CenterPoint’s annual membership in the American Gas Association (AGA), a national gas industry group. CenterPoint had asked for customers to pay the full cost of AGA membership.
“Customers shouldn’t have to pay for dues to organizations like the AGA, particularly when it goes against the state’s climate goals,” said Carolina Ortiz, associate executive director at Comunidades Organizando el Poder y la Acción Latina (COPAL), a member of the Clean Heat Coalition.
Dubious dues
Under the settlement, only half the dues for the AGA can come from customers and membership fees to smaller gas organizations, like the Minnesota Blue Flame Association, will be fully borne by the company.
Karlee Weinmann, a research and communications manager with the Energy and Policy Institute, served as an expert commentator in the rate case on behalf of the Citizens Utility Board (CUB), a consumer advocacy group. The AGA is a national trade association that functions as a political association, Weinmann said. The group frequently fights against proposals to boost energy efficiency and disputes the health risks posed by gas stoves, her research found.
“They’re really trying in these insidious ways to convince people that fossil gas is this irrevocable thing,” Weinmann said.
There is a growing momentum in Minnesota to end the practice of customers paying for association dues, Weinmann said. This year, Xcel Energy agreed to not pass along AGA membership costs to customers after public pushback.
But eliminating the payments would likely require a change in state law, Weinmann said. State Representative Emma Greenman, DFL-Minneapolis, introduced a bill last session that would have banned companies from charging ratepayers for membership dues, but it did not make it out of committee. Colorado, Connecticut, New York and Maine have laws prohibiting utilities from collecting organizational dues.
“It is inappropriate for a monopoly utility corporation to be charging its consumers who have no other choice, to serve the corporation’s political interests,” Weinmann said.
For groups like CUB and the Clean Heat Coalition, eliminating membership dues is a matter of principle and of ensuring that Minnesota pursues its greenhouse gas reduction goals to mitigate the damage of climate change. Emissions from buildings, largely driven by natural gas heat and cooking fuel, are on the rise, according to a 2023 state report.
Limiting the overall rate increase and slashing membership dues passed on to customers is a partial win, Ortiz said. She’s hosted community meetings with COPAL to talk with people about their power bills. Dues to organizations like the AGA can cost hundreds of thousands of dollars a year, Weinmann said. While the charge on an individual bill can be small, it all adds up.
“There is that moment of realization of, ‘Hold on, wait a minute, what are we actually paying for?’” Ortiz said.
CenterPoint said it maintains memberships in trade organizations to help advance its safety and reliability goals.
“These relationships connect us with the latest industry technology innovations and research that help us continue to deliver the safe, reliable and increasingly cleaner energy Minnesotans count on each day,” the company said in a statement.
Protecting against increases
CenterPoint said the settlement will allow the company to make investments to continue reliably serving Minnesota customers.
When utility companies propose a rate increase, they are required to demonstrate the need by laying out future costs of supplying power, according to Brian Edstrom, an attorney with CUB who participated in the negotiations. The goal for organizations like CUB is to keep gas and electric service as affordable and reliable as possible. This settlement will allow the company to bring in more money from ratepayers, but will protect customers from a larger price increase.
“We understand that all rate increases are challenging and that rising energy costs are something that all Minnesotans are grappling with, and this settlement agreement we hope protects ratepayers from the larger increase that was requested,” Edstrom said.
