Lawmakers weigh bill to make customer ability to pay a factor in utility rate decisions

Representative Lou introduced House File 3777, a proposal that would explicitly require regulators to consider customers' ability to pay when setting utility rates and returns.

An 11 some fall, identified as executive director of the Citizens Utility Board of Minnesota, told the committee the statutory language fills a gap and would help ensure rate-making considers affordability impacts on households. "Considering a reasonable return includes considering the impact of the cost that return would have on customers," she said.

Jim Pearson of Xcel Energy and Zack Martin of Minnesota Power said they support the goal of affordability but cautioned that the proposed language could create additional complexity in longstanding regulatory processes. Pearson said Minnesota's cost-of-service model already provides regulators extensive tools and that inserting new statutory standards could raise questions about measurement and implementation.

Members asked how the customer's ability to pay would be operationalized and whether the change would require additional dockets or new customer classes. The bill sponsor and witnesses said the intention is to provide guidance to the commission rather than prescribe a specific mathematical formula.

Committee members thanked witnesses for testimony and laid the bill over for continued discussion and stakeholder work.