How liberal energy policies increase your heating bill: Xcel Energy warns about rising natural gas prices during cold snap

Xcel Energy is warning Minnesotans that wholesale natural gas prices are rising, which could cause sticker shock for heating bills this month. Fox 9 reports:

In a message on Wednesday, Xcel says wholesale natural gas prices have been on the rise over recent days, caused by the increase in demand across the United States.

With increased prices, Xcel officials say customers may want to consider taking steps to lower natural gas consumption.

“With the increased cost of natural gas, customers may want to consider conserving natural gas for the next few days because the wholesale cost is passed on directly to customers,’ Xcel’s message reads. “For additional context, while wholesale natural gas prices have increased as a result of supply and demand in this cold weather, at this time, the increase in price is significantly smaller than the increase experienced two years ago during Winter Storm Uri.”

In a news release, Xcel offered suggestions to keep bills as low as possible, such as setting your thermostat to 58 degrees when you leave your house, using ceiling fans, replacing your furnace filters, and lowering the temperature on your water heater.

While these reductions in electricity demand can help offset some of the cost of natural gas for home heating, they miss the bigger picture: natural gas consumption is rising because we are burning more of it for electricity generation, and this rising demand is driving up natural gas costs for home heating.

This isn’t rocket science. As I wrote in August of 2021:

Natural gas is the primary heating fuel used in Minnesota,but it is also being used more frequently to generate electricity. This is OK in the summer when demand for natural gas for home heating is virtually nonexistent, but it is a massive problem in the winter when demand for home heating is high.

Demand for natural gas is even higher during events like the Polar Vortex because wind turbines have a bad habit of generating little power when it is needed most. 

Data from the U.S. Energy Information Administration shows that natural gas use for electricity generation in Minnesota has increased substantially over the last 15 years as generation from coal has declined. This rising dependence on natural gas makes us more vulnerable to price spikes when demand for home heating is high and wind generation is low.

As the grid becomes more dependent on unreliable wind and solar generation, it will also become more dependent upon natural gas to supply electricity when the wind isn’t blowing or the sun isn’t shining.

As more coal plants are (unwisely) retired in the near future, the amount of natural gas we will need for electricity generation will surge during peak times like the Polar Vortex of 2021, when wind generation was low, as shown in the graph below.

This increase in natural gas use for electricity generation will compete with the natural gas that we need for heating our homes, which will inevitably cause prices to spike. This is basic economics. Supply, meet demand.

Unfortunately, Minnesota Public Utilities Commission (PUC), liberal lawmakers, and the electric companies themselves are actively working to shut down Minnesota’s low-cost, reliable coal plants years before the end of their useful lifetimes, which will put even more strain on natural gas supplies during future cold snaps.

Rising prices will become more common and more severe if we continue to implement liberal energy policies that make us more reliant upon natural gas. This is an obvious, foreseeable, and inevitable consequence of the decisions that are being made on our behalf today by elected officials.

As families find it harder to pay their heating bills, these policymakers should get the blame they deserve.