Gas utility wants to make it easier to include greener energy sources in rates

The state's largest natural gas utility, CenterPoint Energy, is proposing state legislation allowing it to more easily launch clean-energy initiatives that would be partly funded by ratepayers.

Under the legislation unveiled Thursday, a natural gas utility could submit an "alternative resource plan" to the Minnesota Public Utilities Commission (PUC). Such plans would include renewable natural gas — gas created from landfills, sewage and livestock manure — as well as new technologies like carbon capture and hydrogen gas production.

"We see many great opportunities for clean energy innovation with natural gas," Brad Tutunjian, CenterPoint's division vice president for Minnesota operations, said in a news statement.

The bipartisan legislation would allow natural gas utilities to ask the PUC to roll some costs of renewable programs into their rate base.

The costs of any renewable gas plan would be limited to 5% of a utility's "annual revenue requirement," which is regulated by the PUC.

For typical CenterPoint residential customers, that translates into a maximum hike of $1 on their monthly gas bills based on current rates, the company said.

A utility's annual revenue requirement is essentially ratepayer money needed to fund operations and maintenance (though not fuel costs).

Under the current regulatory process, it is more difficult for natural gas utilities to get some of the costs of clean-energy programs included in their rate bases.

Houston-based CenterPoint serves 860,000 customers in Minnesota. The Minnesota legislative session kicks off Tuesday.

CenterPoint in 2018 proposed a first-of-its-kind renewable natural gas pilot program in Minnesota, though it was rejected in July by the PUC.

The program would have allowed customers to voluntarily buy a portion of their natural gas from renewable resources.

It would not have affected general gas rates for all customers.

The PUC rejected the pilot program amid concerns of costs, transparency and out-of-state gas sourcing. However, the PUC's chairwoman, Katie Sieben, also asked CenterPoint to refine its proposal and bring it back.

Renewable natural gas is produced by the breakdown of organic waste through anaerobic digestion. CenterPoint would buy it and mix it with fossil fuel gas as the two are not separated in pipelines.

Mike Hughlett • 612-673-7003