Minnesota’s Public Utilities Commission (PUC) is currently reviewing natural gas line extension policies in the Future of Gas docket (G-999/CI-21-565). These rules determine how far utilities extend gas service to new developments and how costs are shared.
Housing First Minnesota has submitted three formal letters in this proceeding, warning regulators that eliminating line-extension allowances would add thousands of dollars to the cost of a new home and worsen the state’s affordability crisis.
What Housing First Told Regulators
Across our filings, the message is clear: don’t upend long-standing practice and don’t erode affordability.
“Any regulatory changes that raise costs, limit energy choices, or introduce uncertainty for developers will exacerbate these challenges and further restrict access to attainable housing—especially for first-time and moderate-income buyers,” said Mark Foster, vice president of legislative & political affairs.
Adding potentially thousands of dollars per unit in infrastructure costs through the removal of line extension allowances directly impacts the feasibility of new projects. For buyers already most at risk, every cost increment matters.
The assertion by the PUC that line extension policy is “not housing policy” disregards the clear connection between infrastructure costs and project feasibility. Removing these allowances will raise per-unit housing costs, undermine project viability, and exacerbate the existing shortage of attainable homes.
Long-standing policies—such as gas line extension allowances and cost-sharing frameworks—have supported stable and affordable housing development for decades. Undermining these policies could disrupt planning and escalate costs across the market.
Problematic Commentary from State Agencies
Department of Commerce
In its filings, the Department of Commerce claimed that eliminating the free-footage allowance would have only a “minor” effect on housing affordability.
Housing First responded:
“This conclusion ignores the cumulative weight of layered mandates on new construction. Builders are already grappling with significant affordability challenges. Adding potentially thousands of dollars per unit directly impacts the feasibility of new projects.”
Minnesota Housing Finance Agency (MHFA)
MHFA’s September 9, 2025 comments openly supported ending line-extension allowances:
“Minnesota Housing supports ending current gas line extension policies to subsidize new customers’ connection to the natural gas system as a first step in helping the state meet our Greenhouse Gas emission reduction goals.”
This stance prioritizes climate goals while overlooking the immediate and substantial affordability impacts for families buying new homes.
Additional Voices
Housing First Minnesota is not alone. A range of stakeholders share our concern:
- CenterPoint Energy: In its reply comments, CenterPoint opposed elimination of allowances, joining other major gas utilities. They warned that allowances are critical for a dual-fuel future and provide necessary affordability protections for new customers.
- Xcel Energy: Xcel emphasized that line-extension allowances provide many customer benefits without burdening existing customers.
- Builders & Developers: Across the state, developers stress that losing allowances will delay or even cancel projects, especially in rural and suburban communities where extensions are longer and more costly.
Together, these allies reinforce what Housing First has said from the start: eliminating line extension allowances will drive up housing costs and reduce supply.
The Bottom Line
Eliminating line extension allowances would mark a radical departure from decades of stable policy. Instead of spreading infrastructure costs fairly, it would pile new expenses directly onto homebuyers — in the middle of a housing affordability crisis.
As Housing First put it in our final comments:
“Minnesota cannot afford to solve one crisis by worsening another.”
Our Commitment
Housing First Minnesota will continue to stand up for builders, developers, and families. We will fight to preserve policies that protect affordability, consumer choice, and reliable energy access for every Minnesotan. We’re committed to working to find solutions that meet Minnesota’s climate goals without making housing less attainable.
