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Minnesota To Launch State's First Affordability Program

The Minnesota State Legislature, at the urging of the largest utility company in the state and two low-income advocacy groups, enacted legislation during the 2004 legislative session establishing the state's first affordability program. Xcel Energy joined forces with the Energy CENTS Coalition and the Legal Services Advocacy Project to convince legislators to transform the company's existing discount program into a more flexible program, allowing deeper subsidies for customers with the highest energy burdens.

A statute enacted in 1994 required that Xcel Energy provide a 50 percent discount on the first 300 kWh to customers receiving federal energy assistance. The typical customer received a $9 reduction on his or her monthly electric bill.

The company and advocates found that at least 60 percent of the 41,000 customers currently receiving the required discount were current on their bills. However, about 9,000 customers (or 20 percent) were still either disconnected or subject to disconnection. These data confirmed the belief that program changes could target the resources (approximately $5.3 million annually) more effectively.

The new program, effective July 1, 2004 and scheduled to begin this fall, will identify low-income customers with the highest energy burdens and provide benefits to ensure that households do not devote more than two or three percent of their income to electric costs. Customers will be required to pay an affordable budget amount and the program will make up the difference between the customer's payments and the full bill. The company may also provide other services, which could include energy efficiency and conservation investments. Those customers who are elderly or who have a disability will either move to the affordability program or continue to receive the current discount.

Source: Legal Services Advocacy Project

Page Last Updated: January 27, 2010