Andy's Blog

At the Duluth Area Chamber of Commerce’s FORVM, held on Tuesday, January 6th, Mayor Ness talked about the potential of selling the City’s natural gas division of Comfort Systems. This may be a good move on the city’s part; they would gain a large infusion of cash, lessen its legacy costs and potentially lower costs to end users.

We have been following this issue for some time. In the interest of educating our members, we compared and contrasted end user costs for similar cities in Minnesota (Rochester, St. Cloud, Bloomington and Duluth). The price Comfort Systems currently charges to its customers is $1.43 per thermal unit. St. Cloud, on the other hand, charges it users $.68 per thermal unit – the lowest charge of the communities we compared. Residential and business customers in Duluth, then, pay two times as much to heat their homes and businesses as they do in St. Cloud.

In an interview with the Northland’s NewsCenter, Sharla Gardner, Third District City Councilwoman, stated that she is against selling the gas portion of Comfort System, reasoning that eliminating local control of Comfort Systems would mean an increase in costs. Unfortunately, Gardner is misinformed about this point. Duluth’s prices are set by Comfort Systems and approved by a vote of the city council. We have local control. Other systems – privately held companies which essentially operate a monopoly – have to ask permission from the State of Minnesota Public Utilities Commission to raise their rates. This process is often grueling and involves justifying their rate increases. Essentially, the commission works to make sure that the gas monopoly does not unfairly profit from its status as a monopoly.
As it stands, Comfort Systems’ rates are not subject to the same scrutiny because the system is wholly owned by the city and a simple majority vote of the city council is all it takes to raise rates. As a result, our gas utility is quick to raise rates. Local control and oversight of the utility has resulted in the opposite of Councilor Gardner’s proposition: we pay more for gas than other comparable cities.

It is unfair to condemn any potential sale of the gas company before our community is able to fully explore the possibility. Mayor Ness, in the most fiscally challenging times since the Great Depression, should proceed with his plan to investigate selling the utility, using an independent expert to make recommendations. If the city could benefit and residential and business customers could pay much less for service, we all win.

You have an opportunity to weigh in too. Email the council at council@duluthmn.gov and let them know your thoughts. Remember, Comfort Systems is owned by those of us who pay for it. We should have a voice in what happens to it.