No natural gas line for Scandia residents

Too few neighbors sign up to meet Xcel Energy minimum

Mary Bailey
Community Editor

Instead of 80 commitments from Scandia residents wanting to hook up to a natural gas supply line, Xcel Energy received 52. As a result, the company will not extend a natural gas main to the rural community in time for the fall 2014 heating season.

“We needed 80 interested property owners in order to meet our Minnesota Public Utilities Commission gas operating tariff economic criteria for the extension,” Xcel’s Patti Nystuen said.

A total of 110 properties were identified by Xcel as potential customers in the area of Olinda Trail, Oren Road, Oldfield and Ogilvie avenues, 236th, 237th and 240th streets, Pilar Road, and Paris and Perkins avenues.

Last winter, faced with rapidly rising propane prices, Scandia resident Bob Bernard approached city officials for help in getting a natural gas line in the street.

The city’s Economic Development Authority organized meetings between residents and Xcel representative Michael Mayerchak.

Residents were given until May 9 to decide whether they’d like to hook up to a natural gas line. If enough said yes, Xcel promised to have gas lines in by Nov. 1.

The initial hookup fee for each customer was to be $4,550, plus the cost to extend the line from the road to the home. Each customer would pay a surcharge of $300 per year for the next 15 years.

“We will continue to work with city staff in the hopes that additional property owners express a conversion interest,” Nystuen said. “For now, the gas main project will be pursued as a potential project for the summer of 2015, pending efforts to add more residential customers.”

In the meantime, on May 16, Gov. Mark Dayton signed into law new consumer protections to help Minnesotans who rely on propane to heat their homes.

During last winter’s propane shortage, Minnesota consumers complained to the Minnesota Department of Commerce about service fees, price gouging and other unfair market practices.

The new consumer protections call for transparent pricing. Propane distributors must tell customers the current per-gallon price of propane, including all additional charges, fees and discounts for residential heating service.

For consumers who enter into a contract with their distributor in the summer before the heating season, propane distributors are prohibited from adding any service, distribution, transportation or other fees to the bill unless they cannot get supply.

In cold months, when the propane bill can be very high, propane distributors must now offer all customers a payment plan option.

And instead of refusing to sell to certain customers, propane distributors who have available supply are prohibited from refusing to sell to a customer who pays by cash or receives energy assistance for home heating.

The Commerce Department will receive additional tools to more effectively monitor the supply of propane in Minnesota, investigate complaints and enforce the law.

Terminals where propane is loaded into trucks must now notify the Commissioner of Commerce within 24 hours when propane is not physically available for sale to distributors.

The new legislation also includes a requirement for the Legislative Energy Commission to study what can be done to convert propane heat customers to natural gas or other energy sources.

Recommendations for legislative solutions will be due by Jan. 15, 2015, in time for the next legislative session.