Proposals to eliminate or phase out line extension allowances were deferred back to rate cases.
On June 4, 2026, the Minnesota Public Utilities Commission (Commission) issued a decision in the Future of Gas docket (Docket No. G999/CI-21-565) largely maintaining utilities’ existing natural gas line extension policies while introducing slightly modified maximum distances for free footage allowances, new guidelines and reporting requirements for rate cases, and new gas usage monitoring requirements.
The decision establishes a new uniform distance for free footage allowances of up to 75 feet for service lines and 80 feet for mains within utilities’ line extension policies. Utilities retain the ability to propose alternative approaches in general rate cases.
The decision also requires utilities to monitor declining gas usage. Beginning with 2026 data, utilities must file a compliance report if they experience three consecutive years of declining total throughput or declining average residential gas sales per customer. The Commission will also require more robust justification and reporting for utilities seeking to maintain line extension allowances in future rate cases, specifically addressing stranded asset risks and electrification trends.
“I’m proud of the thorough, data-driven analysis that Fresh Energy and MCEA provided in this docket, even though we were hoping the Commission would take stronger action on this issue,” said Caitlin Eichten, director, building energy transition at Fresh Energy. “Gas utilities are already experiencing declining gas usage from residential customers. At a time when Minnesotans stand to benefit from a cost-effective energy transition to clean heating, it’s more important than ever to scrutinize policies that incentivize gas system growth.”
Throughout the proceeding, Fresh Energy and MCEA built a substantial record advocating for the elimination — or at minimum, a phased reduction — of gas line extension allowances, arguing the policy is out of step with Minnesota’s climate goals and increasingly at odds with the economics of the gas system itself. The organizations provided several rounds of comments and alternative decision options and commissioned an independent expert to examine the economic analyses of utilities’ line extension policies, which found utilities underestimate the cost of adding new customers and overestimate future revenues.
“MCEA appreciates some of the reporting requirements ordered today but still believes this was the right time to end a policy that facilitates the expansion of the gas system,” said Amelia Vohs, climate program director at MCEA. “Ending this policy is a critical first step to address the climate impact of heating our homes and buildings, and we hope the policy is revisited as soon as possible.”
Fresh Energy and MCEA provided analysis demonstrating that gas usage has been declining for five years, and documented eight other states that have taken steps to eliminate or phase out line extension allowances, citing stranded asset risks, availability of cost-effective electric alternatives, and tension between subsidizing fossil fuel infrastructure and meeting state climate targets. We are also concerned the Commission’s decision to return consideration of line extension policies to rate cases will not be holistic and instead address the policy on a utility-by-utility basis.
Fresh Energy and MCEA provided initial, reply, and supplemental comments in this docket, as well as an expert report, and submitted alternative decision options and joint preferred decision options. We will continue to engage in the ongoing Future of Gas proceeding, rate cases, and related proceedings as the Commission moves forward with implementing today’s decision.