Gas-bill programs on hold: PUC suspends fixed-price plans as attorney general investigates

The Minnesota Public Utilities Commission voted Tuesday to suspend the "fixed price" billing programs that the state attorney general said overcharged thousands of CenterPoint Energy and Xcel Energy customers.

The fixed-price plans allowed customers to lock in a set price on their natural gas bills, but Minnesota Attorney General Lori Swanson said they confused many customers, who thought they were signing up for a budget plan that would even out their bills. Others thought the plans would save them money, but in some cases, the attorney general said, customers were charged up to 40 percent more than they would have paid under a standard billing plan.

Both CenterPoint and Xcel had said during PUC public hearings that their programs were not designed to save customers money. Instead, they were designed to offer predictability even if bad weather caused natural gas wholesale prices to spike, as they did after hurricanes Katrina and Rita or during winter cold snaps.

But the PUC voted unanimously to suspend the programs for the 2007-08 heating season until the attorney general's office can complete its investigation for the PUC.

However, most customers currently enrolled in the fixed-price programs will probably have to stick with the program until it runs out this fall, or pay a fee to get out of it.

The commission voted to let low-income customers who receive heating aid opt out of the fixed-rate programs before their 12- month contracts expire in November without paying a $30 exit fee.

Xcel Energy, which serves St. Paul and the east metro suburbs, had already agreed in May to end its Fixed Bill heating program, which had 14,000 subscribers. It has been trying to negotiate an agreement to settle the allegations of overcharging with the attorney general's office. The utility said it expects to possibly file an agreement with the PUC by Friday, an Xcel spokeswoman said Tuesday. PUC approval would be required before the settlement became final.

Xcel's program included 590 low-income households who received federal aid through the Low Income Housing Energy Assistance Program, or LIHEAP.

CenterPoint, the state's largest natural gas provider, said Tuesday it agreed to discontinue its No Surprise Bill program for the coming season. CenterPoint, which serves Minneapolis and the western Twin Cities suburbs, has not made a decision about offering its program beyond the 2007-08 program year, the utility added.

CenterPoint had 38,000 households enrolled in its No Surprise Bill program, which it began in 2001. About 800 families in the program received federal energy assistance through LIHEAP.