Michigan’s Statewide Energy Assessment

Fact Sheet
July 1, 2019

What happened? energy assessment from the MPSC was delivered July 1,
A combination of extreme weather and energy emergency with a final report to follow in September.
events during January 30-31, 2019 challenged the natural
The MPSC goal is to ensure safe, reliable energy for
gas and electric systems in Michigan. While service was
Michigan residents and businesses and to be prepared to
maintained, Michigan’s energy supply and delivery systems
alleviate impacts during future events. The Commission
were strained due to the extreme weather dubbed Polar
took this opportunity to assess the potential vulnerabilities
Vortex 19 or PV19 where temperatures dropped below
of the natural gas, electricity, and propane systems, and to
-25° F. The abnormal weather caused unplanned electric
review the cyber and physical security of our energy
generation outages and historically high natural gas
systems and our emergency operations protocols.
demand, at the same time as an unexpected failure of
critical natural gas infrastructure. Statewide energy assessment process
The MPSC formed the following specific teams:
The regional electric grid operator, Midcontinent
Independent System Operator (MISO) declared a system- Electric
wide (15 states) electric emergency requiring energy Natural Gas
conservation and all generation to operate at maximum
Propane
output.
Cyber and Physical Security
On the morning of January 30, a fire ignited at the Ray
Compressor Station, Consumers Energy’s largest natural Energy Emergency Management
gas storage facility
Over several months, each team collected data from rate-
(supplying over 50%
regulated and non-rate regulated energy providers and
of customer needs at
reviewed existing studies addressing system planning, risks,
peak times), leading
and best practices. The Commission hosted over 40
to a severe
internal and external meetings and conference calls with a
disruption of natural
variety of stakeholders to help inform the development of
gas supply and
the report.
Photo Credit: Todd McInturf/The Detroit News deliverability.
Michigan’s energy position
The impact of these overlapping emergencies led
Michigan has an extensive system for supplying electricity,
Michigan’s two largest utilities to request conservation
natural gas, and propane that is tied to regional markets.
measures and the State Emergency Operations Center to
make a broad public appeal to all residents to conserve Natural Gas:
natural gas. The statewide appeal included a text message Consumption of
alert from the Michigan State Police. natural gas in
Michigan is
Charge from Governor
greatest in the
Governor Gretchen Whitmer called upon the Michigan
residential sector,
Public Service Commission (MPSC) to evaluate whether the
where it is used as
design of the electric, natural gas, and propane delivery
the primary
systems are adequate to account for changing conditions
heating fuel in
and extreme weather events. The Governor asked the
more than 75% of
Commission to provide recommendations on how to
Michigan
mitigate risk on the energy system. An initial statewide
households.

800-292-9555 | www.michigan.gov/mpsc P.O. Box 30221, Lansing, MI 48909

 Michigan ranks first in natural gas storage capacity with Michigan’s electric transmission and distribution system
over 50 natural gas storage fields, allowing the state to are expansive. Wind and ice are the leading cause of power
meet demand year-round with more stable supply and outages due to broken poles and trees contacting
pricing. distribution wires. Many distribution poles, wires,
 There are 9,215 miles of natural gas transmission substations and other equipment are beyond their design
pipeline with access to diverse supplies (Canada, Gulf life and utilities are making major investments in
Coast, Rockies, and Marcellus/Utica).
infrastructure and maintenance to improve safety and
 Almost 115,000 miles of distribution pipelines support
reliability.
the delivery of natural gas to businesses and residents.
 Over 11,000 miles of natural gas pipeline is considered
2000's - current
“high risk” due to corrosive materials (e.g., cast iron, Coal - 1950s - 1980s coal plants replaced by
Natural gas - 1990s;
unprotected steel). Since 2011, utilities have Nuclear - 1970's renewable energy and
natural gas
accelerated the removal of these pipelines, decreased
pipeline leaks, and made other investments to improve
the safety of the natural gas system. Propane: Propane is not regulated by the MPSC and
supplies 8% of Michigan households for home heating (8%
Corrosion-Related Leaks Repaired 2010-2018
for the Lower Peninsula and 18% for the Upper Peninsula).
Michigan ranks first in residential propane consumption
among
states. In
addition to
the propane
produced at
Michigan’s
two
fractionators
and one
refinery,
propane is
Electricity: Michigan has a diverse mix of electricity supplies also delivered by truck, rail and pipeline.
(nuclear, natural gas, coal, renewable energy) and is home Aside from aging infrastructure, Michigan’s energy
to a large (2,000 megawatt) pumped hydroelectric storage infrastructure could be impacted by various threats.
facility in Ludington that helps meet peak demand. Extreme weather events such as the December 2013 ice
Aging coal plants are retiring and Michigan’s energy mix is storm or the March 2017 windstorm (70 mph wind gusts)
rapidly evolving to cleaner sources such as natural gas, are increasing, causing extended power outages. With
renewable energy, and other programs that shift or cut increased use of natural gas to generate electricity, our
energy demand. energy systems become increasingly connected, and
physical or cyber security threats require vigilance to
Michigan’s Evolving Net Generation Mix from 2007-2017
protect our energy security.
The electric system has a cushion of supplies to handle
equipment failure and high demand. The chart below
depicts how that cushion can be depleted, leading to the
declaration of “maximum generation events” and other
operational steps to avoid power shortages and blackouts.
These have occurred in all seasons.

800-292-9555 | www.michigan.gov/mpsc P.O. Box 30221, Lansing, MI 48909

 Gas-electric interdependencies and
prioritization
•Identify revisions to natural gas utility curtailment
procedures to prioritize home heating over electric
generation.
Demand response program improvement and
development
•Improve customer demand response programs since some
customers did not respond as expected during PV19 and
utility tariffs were inconsistent.

Cyber security standards for natural gas

distribution utilities
Source: MISO 2019 PY=Planning Year (June 1 – May 31) •Enact rules for cyber security and incident reporting for
Statewide energy assessment initial report findings and natural gas utilities.
recommendations
The initial assessment determined that Michigan has
Expansion of emergency drills
sufficient and unique assets that help ensure reliable •Expand emergency drills to provide a wide range of
supply and delivery of energy to help meet peak demand. scenarios besides outage management restoration.
Communication during PV19 was confusing, inconsistent,
Although Michigan’s energy infrastructure is designed and and erratic.
operated to maintain and deliver energy supplies during
emergency conditions, there is an inherent risk of Propane contingency planning
disruption. Such emergency events could have a high
•Develop a formal contingency plan for the continued supply
impact on the economy and well-being of Michigan
and delivery of propane or other energy alternatives in the
residents. event of supply disruptions, including a temporary or
permanent shutdown of Line 5.
To ensure reliable, resilient supplies in the future, the
MPSC recommends a number of actions to be taken by the
Commission, regulated utilities, policymakers, and others. What’s next?
Several highlights include: After receiving public input on the initial assessment
submitted on July 1, the MPSC will issue a final report on or
before September 13, 2019.
Risk based, integrated natural gas planning
•Undertake long-term, risk-based, integrated natural gas The public is encouraged to provide comments on the
maintenance and infrastructure planning that includes initial report. Comments may be mailed or emailed to the
storage, transmission, and distribution assets as well as long- Executive Secretary with the caption “Case No. U-20464” in
term risk mitigation plans.
the subject line.
Integrated electricity system planning
•Better integrate five-year distribution and transmission Michigan Public Service Commission
plans as part of utility integrated resource plans to ensure PO Box 30221, Lansing MI 48909
truly integrated electricity system planning. This should -OR-
include examining options to expand Michigan's electrical [email protected]
connections between its peninsulas and with neighboring
states.
After a final report is delivered to the Governor in
Valuing resource diversity and resiliency
September, the MPSC will direct utilities and take other
•Work with stakeholders to understand the value of resource
supply diversity to better inform decisions related to power
steps to address any areas for improvement identified
plant development, retrofitting, and retirement beyond through the overall assessment.
traditional planning and financial analyses.

800-292-9555 | www.michigan.gov/mpsc P.O. Box 30221, Lansing, MI 48909