Bill would go after late fees charged by utilities

Many state residents are having a much harder time keeping the lights on.

“Minnesotans together owe more than $129 million past due on utility bills,” Rep. Athena Hollins (DFL-St. Paul) told the House Energy Finance and Policy Committee Tuesday. “And more than 90,000 households were disconnected from electric or gas service for non-payment in 2025.

“These numbers show us that Minnesotans are struggling to pay their utility bills. Which means they need help, not punitive measures and additional fees.”

Hollins is seeking to throw those residents a lifeline with HF3912 that, as amended, was laid over for possible omnibus bill inclusion.

The bill has three aims:

• extend the state’s cold weather rule on utility shutoffs to include customers who have agreed to payment plans with a utility who earn above 50% of the state’s median income;
• prohibit utilities from charging reconnection fees when someone’s energy utility is turned off due to non-payment; and
• create a regulatory framework to address energy utility late fees that requires utilities regulated by the Public Utilities Commission to demonstrate the fees are just, reasonable and in the public interest.

Hollins said late fees are typically 1.5% per month or higher, and that the interest compounds each month.

Rep. Athena Hollins

“This results in hundreds and sometimes thousands of dollars being added to customers’ balances,” she said. “The charges disproportionately punish low-income households, often forcing difficult choices between paying for essential power and necessities like food or medicine.”

Nick Martin, director of strategic outreach and advocacy for Xcel Energy, took issue with the bill.

“We understand the goal of this bill is affordability, and we support that,” he said. “But we don’t think this is the best way to go about it. The bill would eliminate most reconnection fees for non-payment. … That shifts a cost from customers who haven’t paid their bill onto customers who have, which includes most low-income customers.”

Martin said the late payment provisions would have a similar effect.