Retail Unbundling - Minnesota

Status: The state has no unbundled services for residential customers but is considering action.

Overview: The Minnesota Public Utilities Commission (PUC) has been studying the issue of restructuring and unbundling of retail natural gas sales for several years. In April 1995, Minnegasco, the largest local distribution company (LDC) in the state with 52 percent of the residential business, filed a proposal that included a plan to aggregate small customers who could then choose their natural gas supplier. That proposal was rejected by the PUC because of unaddressed concerns such as who, if anyone, would be the supplier of last resort, whether system reliability would be affected, and the amount and recovery method for stranded costs. In October 1997, a docket was issued convening a study group, followed by an August 1998 order asking the group to develop a statewide natural gas unbundling plan within a year. In May 1999, the PUC closed the natural gas unbundling investigation (docket number G-999/CI-99-687) to free the regulatory and energy participants to develop a comprehensive gas and electric utility restructuring/unbundling plan in time for consideration by the 2001 legislature. In September 2000, the Minnesota Department of Commerce noted that it was not in the public interest to restructure gas or electric utility regulation substantially at this time, but rather to place emphasis on energy reliability. New energy legislation passed in 2001 did not address natural gas unbundling, but instead focused on energy conservation and efficiency measures and reliability.

EIA State Data: In 2001, Minnesota had 1,249,748 residential and 118,992 commercial customers. They consumed 125 and 94 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from LDCs by residential and commercial customers were $8.74 and $7.50 per thousand cubic feet, respectively. The average city gate price in the state was $5.84 per thousand cubic feet.

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File Last modified: 01/31/2003