Over the last year, the Minnesota Public Utilities Commission (PUC) has been wrestling with a natural gas issue that has implications for economic growth and housing development in Greater Minnesota. The fundamental question the PUC has been deliberating on is who should pay when an investor-owned utility’s natural gas line is extended to new housing developments or new businesses—only the new customers, or all users on the natural gas system. For decades, utilities have been able to spread the cost of extensions (up to a certain length) across all users because adding new users benefits everyone with Line Extension Allowances (LEA).

This policy has come under fire in a PUC docket focused on natural gas and the state’s greenhouse gas goals. Some clean power advocates and the Department of Commerce have been pushing the PUC to bar the use of LEA. Last August, the CGMC submitted comments on this issue, expressing our concern that eliminating these allowances would negatively impact Greater Minnesota by making the construction of new housing even more expensive.

Last week, the PUC finally held a hearing on this issue. Prior to the hearing, the CGMC signed on to a letter with multiple advocates, including several unions, the Minnesota Corn Growers, the Minnesota Multi Housing Association, Housing First, and several utilities. The letter stated our preferred decision options, including continuing to allow LEA.

During the hearing, several of the commissioners specifically mentioned that they were concerned about the negative impact that discontinuing LEA could have on rural Minnesota. They also pointed out that if the PUC made it more expensive to hook up to natural gas, homeowners were just as likely to switch to propane, which could have worse impacts on the environment.

Recognizing these concerns, the PUC decided that utilities could continue to offer the allowances, but the maximum length would be slightly shorter. A utility could petition for longer allowances if the circumstances demand it. We are pleased that the PUC recognized Greater Minnesota’s concerns in its decision.

For questions on this issue or the CGMC’s advocacy, please contact CGMC Lobbyist Elizabeth Wefel at eawefel@flaherty-hood.com.