Thousands of Minnesotans have their natural gas cut off
Minneapolis, Minn. — (AP) - A record number of Minnesotans are delinquent on their natural gas bills, which economists said could be another troubling sign for the state's economy.
CenterPoint Energy, the state's largest provider of natural gas, reported that about a third of its customers - about 208,000 businesses and households - owe money after the heating season.
More than half of those delinquent customers are at least two months behind on payments, and owe an average of $1,500.
Xcel Energy has also noted increased delinquencies, as has Minnesota Energy Resources, which serves 51 counties around the state.
"I'm not too surprised by this," said Scott Anderson, an analyst with Wells Fargo & Co. "We've seen stark declines in job growth, and income growth has lagged. Combined with higher food and gas prices, something has to give."
Thousands of people have already had natural gas cut off. While a lack of furnace heat isn't a frightening prospect at the moment, it could also affect water heaters, stoves and dryers.
CenterPoint's outstanding bills total $100 million, double what the company has seen in recent years.
The company has beefed up staff at its phone center to contact customers, and its credit department isn't waiting until fall, as it normally would, to contact past-due customers to talk about payment plans or refer them to social-service agencies.
"We're going to try to negotiate an acceptable payment plan," said Greg Schirmers, manager of credit and collections at CenterPoint. "But we're finding people that have substantial balances, and they aren't able to commit to payments. That feels very different."
As natural gas prices have risen the past six or seven years, write-offs and past-due payments have increased - but never to this level, CenterPoint officials said.
"I spoke with a 20-year veteran of the credit and collections department, and she's never seen anything in her experience that comes close to the delinquency figure we have today," said Rolf Lund, a spokesman with CenterPoint.
Ramifications for the utility companies - and their paying companies - is unclear. CenterPoint customers currently pay an average of $21 a year to help cover $16 million a year in uncollected debt, according to the company.
Social service agencies are concerned that a rash of disconnections, which bring reconnection fees of $22 to $770, could drain federal grant funds intended to help low-income families pay utility bills.
Utility companies and consumer credit counselors are urging those who owe money to contact the utilities now and head off costly reconnection fees this fall.
"There are a lot of families who let gas go for the summer and do without cooking gas and hot water," said Fenton Hyacinthe of Community Action Minneapolis, which coordinates the federal grant program. "More than likely, we'll have a lot of people coming in here early September or early October with their utilities still shut off.
"We try to educate people and tell them that if your payment is $200 and all you can pay is $50, CenterPoint and Xcel will take the $50."
(Copyright 2007 by The Associated Press. All Rights Reserved.)