Thank you Chair Sieben and Commissioners. I’m pleased to be able to address the body that’s responsible for ensuring Minnesotans have access to safe, reliable, sustainable, and affordable utility services in our state.

The Commission makes important decisions through a robust process, and my office plays a role in that process. As you know but some people may not, the Legislature has tasked the Attorney General with representing the interests of small business and residential customers of investor-owned gas and electric utilities.

Our Legislature has recognized that even these classes are the majority of utility customers, individuals and small businesses need a dedicated advocate. Unlike corporate or big business ratepayers, these folks don’t usually have lobbyists speaking up for their interests. They don’t have the resources to hire lawyers to advocate for them in complex utility rate and service quality proceedings. These folks are busy working, living their lives, and running their small businesses. They probably didn’t think they needed an MBA or a PhD in economics to keep their electric and gas bills down.

They need an advocate in their corner. That’s where the Attorney General’s Office comes in.

Advocating for residential and small business utility consumers is a role I take very seriously. My mission is to help Minnesotans afford their lives and live with dignity, safety, and respect. But it’s hard to afford your life or live with dignity, safety, and respect if you can’t afford your electric bill.

Balancing the interests of ratepayers and shareholders

In setting rates, the Commission is often balancing a utility customer’s interests versus the interests of the utility’s shareholders.

You already know that investor-owned utilities will be at the table telling you about their shareholders’ interest. That’s their basic corporate duty. But understanding the interests of the customers my office represents can be a little more complex. Residential and small business owners have some different but related interests.

For a small business owner, an increase to their utility bill could mean putting off hiring another part-time worker or investing in newer equipment. Some of these small businesses may be able to absorb a utility rate increase by passing on costs to their customers — but that could lead to their customers taking their business elsewhere if they can.

Many small business owners operate on very thin margins — many orders of magnitude thinner than the margins of investor-owned utilities. And these margins are getting even tighter as small businesses see so many of their operating costs increase — whether from increasing costs for providing health insurance to their employees, or increasing costs from imported materials, or increasing gas and diesel costs for transporting goods. Add increasing utility costs into the mix, and for some small businesses these pressures may mean closing their doors for good.

On the residential side, an increased utility bill could be minor for some customers. But for many others it means foregoing other essentials. Residential customers are facing many of the same pressures small businesses are, with rising costs everywhere from the gas station to the grocery store.

But unlike businesses of any size, residential customers can’t pass on these cost increases to anyone. They have to find the savings elsewhere to pay for a utility bill increase. And if they can’t, they may have their service disconnected — and renters may lose their home.

These are the stakes my Office grapples with every day.

Meaning of affordability

Right now, we know that many utility customers are having trouble affording their utility bills. But what does “affordability” really mean? 

It means more than just looking at the per kilowatt hour rate or an average electric bill or gas bill.

A recent report by RMI, a trusted voice in the industry, defines affordability as “whether households can pay for essential energy services without sacrificing health or safety.”

That’s a helpful framing, for a couple of reasons.

First, it looks at energy services, not just electricity or gas bills in isolation, particularly for most Minnesotans who get both a gas bill and an electric bill year-round. While a Minnesotan’s electric bill may not be as high as someone in Arizona who runs has to run their air conditioning nine months out of the year, their gas bill from November to March is certainly much higher.

Second, it focuses not just on whether customers are making their payments, but whether they are sacrificing their health or safety to do so. That is paramount. No one should have to freeze through the winter or sweat through the summer just so they can pay their bills on time. If you’re rationing energy in a way that endangers your health, you might not be behind on your utility bill, but you certainly can’t afford it. 

To this definition of affordability as “whether households can pay for essential energy services without sacrificing health or safety,” I want to add without sacrificing dignity.

Sure, it’s not dangerous to turn out all but one light in your house in the evening. It’s not unsafe to hang your clothes out to dry in the living room instead of running the dryer. It’s not unhealthy to skip the turkey on Thanksgiving because you don’t want to run the oven for 5 hours. But those are the choices Minnesotans are making every day so they can pay their bills — and foregoing basic purchases just so you can pay your utility bill isn’t living with the dignity everyone deserves. That’s why my Office is fully committed to advocating for everyday Minnesotans — because as I said, our mission is to help all Minnesotans afford their lives and live with dignity, safety, and respect.

Thank you, Chair Sieben, for asking me to speak today. I appreciate the Commission taking a closer look at what energy affordability means for Minnesotans. One thing all Minnesotans have in common — no matter how old we are or what communities we hail from — is we all have to make a living and survive in this economy. In many ways, the Public Utilities Commission is a great leveler in that struggle.

As you seek to balance competing pressures, I hope this ongoing dialogue helps you always keep in mind the folks trying to make ends meet or keep their small business afloat. Right now, Minnesotans are telling anyone who will listen that they want a better chance to afford their lives — and more than that, to prosper. My office is listening. I know you all are, too.

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