Loans would help municipal utilities address the natural gas price spikes that occurred during the February cold snap.
The full Senate amended and passed legislation on March 25 that establishes a 2021 Polar Vortex Loan Account for municipal utilities that purchased natural gas during the extremely cold weather that occurred across the country in February.
The bill, SF 1018 (Sen. Dave Senjem, R-Rochester), creates a $15 million fund to provide 0% interest loans to municipal utilities to ensure that their consumers don’t experience immediate skyrocketing prices in their utility bills.
The bill was approved by the Senate on a vote of 66-0 and was sent to the House.
Reason for the bill
When the record cold weather hit a large area of the country in mid-February, the price of natural gas spiked as demand soared, and production facilities were forced to limit or halt operation.
This imbalance in the supply and demand resulted in an unprecedented price surge, which impacted many Minnesota utilities and their customers.
How loans would work
The Polar Vortex Loan Account would be administered by the Department of Commerce and would provide no-interest loans to municipal utilities that purchased natural gas for immediate delivery between Feb. 12 and Feb. 17 to distribute the natural gas to Minnesota retail customers.
The loan would allow the municipal utility to pay their suppliers while allowing the costs associated with the price spike to be to be spread out over five years.