Minnesota Rate Case Decision Protects Consumers and the Environment (12/3/09)
Bill Grant, Izaak Walton League, 651-649-1446 x15
Pam Marshall, Energy CENTS Coalition, 651-774-9010
St. Paul, MN - Conservation groups and low-income consumer advocates applaud a decision Tuesday by the Minnesota Public Utilities Commission that provides incentives for CenterPoint Energy and its customers to conserve energy. The Public Utilities Commission adopted an agreement reached by CenterPoint Energy, the Izaak Walton League of America, the Energy CENTS Coalition, and Minnesota Center for Environmental Advocacy to remove disincentives in CenterPoint’s rates that prevent the company from aggressively pursuing energy efficiency.
Under traditional utility rate structures, companies earn more revenue if they increase energy sales. Tuesday’s decision “decouples” CenterPoint’s revenue from sales, removing the disincentive to pursue energy conservation programs for utility customers. The second part of the agreement, known as “inverted block rates,” will charge customers higher rates as their usage increases, sending a clear price signal to conserve energy. Customers who use an average amount of gas will see little or no change on their utility bill; those who use above average amounts will face higher gas prices. Prices for customers using less than the average amount of gas, the majority of whom are low- or fixed-income customers, will be discounted.
“Today’s decision is a win-win for customers and the environment,” says Bill Grant, Associate Executive Director of the Izaak Walton League, “and a model for utilities across the country. Separating profits from energy consumption is critical to corporate and consumer support for saving energy.” Grant also points out that the decoupling decision implements a provision of Minnesota’s Next Generation Act, passed in 2007, focused on new policies to promote energy efficiency, lower greenhouse gases, and reduce Minnesota’s dependence on imported fossil fuels.
Pam Marshall, Executive Director of the Energy CENTS Coalition, says, “This decision rewards customers who conserve energy with lower gas rates and charges higher rates for customers who use more energy. Because lower energy usage correlates to lower income households, the new rate structure is also consistent with state law to promote more affordable utility services.”
Founded in 1922, the Izaak Walton League of America (http://www.iwla.org/) protects America’s outdoors through education, community-based conservation, and promoting outdoor recreation. The Energy CENTS Coalition (http://www.energycents.org/) promotes affordable utility service for low- and fixed-income people to ensure the basic necessity of energy to all citizens.