Events of September 11, 2001, have highlighted the national need for increased security measures. This includes measures to reduce risks and vulnerabilities associated with key energy supply and distribution facilities. The energy infrastructure of the United States is a potential target for terrorist attacks, and efforts have been underway to provide for added reliability and security. The Michigan Public Service Commission (MPSC) is working with Michigan's energy industries, the Emergency Management Division of the State Police, and the U.S. Department of Energy (DOE) on the protection of our critical energy infrastructure. The following is a summary of the State of Michigan's plans to prepare for and respond to energy disruptions.

Energy emergencies can occur for a number of reasons. The cause and degree of the disruption, in turn, affects the actions taken in response and the rate of recovery. There are three types of energy emergencies. The first, and most frequent type of energy emergency, is physical destruction to energy production or distribution facilities and equipment caused by storms, tornadoes, floods, earthquakes, sabotage, equipment failure, or fire.

The second type of emergency is a sharp, sudden escalation in the price of oil, usually resulting from a curtailment of oil supplies. World oil demand totaled 75.8 million barrels per day in the year 2001. This translates to daily expenditures of $1.7 billion, based on crude oil at an average price of $22 per barrel. A shortage, together with the volatility of the oil futures market, could cause a dramatic and very rapid price increase, as seen following Iraq's invasion of Kuwait in 1991.

The third type of crisis is a sudden surge in energy demand caused by a national security emergency involving mobilization of defense resources. The possibilities of an energy disruption from sabotage have potentially increased in the United States following the events of September 11, 2001. National defense, in a time of crisis, will demand an increase in energy, even if this demand occurred in the midst of a general shortage. Although the regulated natural gas and electric utilities have approved state and federal priority allocation systems, they tend to curtail industrial use to a greater extent than residential use.

Faced with these three types of potential energy emergencies, the challenge is to: (1) develop prudent state energy policies and strategies to minimize future energy emergencies, while (2) develop programs and measures to respond to a variety of energy crises, should they occur.

The focal point for energy emergency planning and response for the State of Michigan is the MPSC, an agency within the Department of Consumer & Industry Services. The energy emergency responsibilities can be grouped into four broad categories:

• Monitoring Michigan's energy supply system for the purpose of detecting unusual imbalances that may indicate the potential for an energy emergency, and advising the appropriate state officials in such events.
• Developing, administering, and/or coordinating energy emergency contingency plans.
• Acting as the communication focal point for federal, state and local activities related to energy emergency planning and management.
• Maintaining ongoing contacts with the petroleum, natural gas, and electric industries concerning Michigan's energy situation.

If an energy emergency requires mandatory state action, the Governor, upon recommendation of an interdepartmental Energy Advisory Committee, or at his own initiative, may declare a State of Energy Emergency under 1982 PA 191. The Governor may begin ordering mandatory actions following such a declaration.

If the situation worsens, the Governor can declare a State of Disaster. In this case, the primary responsibility of response efforts shifts to the Emergency Management Division (EMD) of the Michigan Department of State Police, although MPSC staff continues to be involved with monitoring, communication, and other support activities. The EMD remains in charge of disaster-related activities until the disaster has passed.

If a Michigan emergency or disaster is part of a national emergency, coordination with federal and other state authorities will become important. The DOE is the primary energy agency in the federal government. The DOE is responsible for national contingency planning and response in the event of a nationwide energy shortage.

Energy Advisory Committee

Section 10.82 of the Michigan Compiled Laws (MCL), 1982 PA 191, as amended, provides for an Energy Advisory Committee (EAC), which is responsible for notifying the Governor of an impending energy emergency. When the EAC determines that an energy emergency is imminent based on information from the MPSC and other sources, the Governor is informed and may respond by declaring a State of Energy Emergency. The Governor may also declare an energy emergency on his own initiative. The EAC is comprised of the Directors of the Departments of Consumer & Industry Services, Agriculture, Community Health, Transportation, and State Police. The MPSC Chairman, as provided for in Executive Order 1986-17 MCL, chairs the EAC.

Natural Gas Emergencies

During natural gas supply disruptions, the local distribution companies initiate Commission-approved gas service curtailment plans designed to prevent or minimize the adverse effects of natural gas shortages within a utility's service territory. The objective of the natural gas curtailment programs is to protect essential human services and to minimize economic disruptions in the state. Commission-approved "Controlled Service Programs" provide gas utilities with the authorization needed to control the attachment of new load during periods of long-term gas shortages or shorter-term periods when reasonably priced gas is not available.

The MPSC also monitors natural gas supplies and the potential for emergency situations. This monitoring and reporting function includes equipment outages, pipeline failures, and other situations not directly resulting in an emergency.

Unpredictable natural gas interruptions resulting from pipeline failures, a natural disaster, etc. within any particular natural gas utility service territory are handled by each company according to its own emergency operating procedures, which balance continuity of service and safety. In addition to its pipeline safety responsibilities, the Commission major responsibility during these emergencies is to monitor and coordinate, if needed, the efforts of local distribution companies, interstate pipelines, intrastate producers, and end users to minimize the effects of the interruption.

Electric Emergencies

The MPSC is responsible for monitoring electrical emergencies affecting Michigan's electric utilities. This includes maintaining contact with utilities regarding storm damage repair, electrical transmission and distribution, generation capability, interconnections, equipment outages and other situations not directly resulting in an emergency and matters related to shortages of fuels used for electrical generation.

"Emergency Electrical Procedures" are plans of action to be used by electric utilities in case of significant mismatches between the supply and demand of electricity. Their purpose is to limit problems within a utility's system and to keep problems from spreading to neighboring utility systems. A mismatch in supply and demand can be caused by immediate outages in the production or transmission network or by a gradual development of demand that finally outstrips available capacity. Gradually developing emergencies permit consideration of a broader range of options. The procedures are designed for system-threatening situations; they are not meant for localized disruptions, such as distribution power lines being out of service.

The procedures relating to capacity shortages have been supplemented as experience and technology gains have occurred, in conjunction with the requirements of the North American Electric Reliability Council (NERC) and the East Central Area Reliability Council (ECAR). These supplements do not change any authorized procedures but, rather, allow utilities to better respond to a given situation within the procedures.

Petroleum Emergencies

As the Chair of the Energy Advisory Committee the Chairman of the Public Service Commission has responsibilities for making recommendations to the Governor in the event of a petroleum shortage. The Energy Appraisal and the weekly heating oil and propane residential prices survey provide the means for monitoring petroleum markets. In the event of a petroleum shortage prices would spike and oil suppliers be forced to allocate petroleum product supplies. This means they would limit the amount they supplied to their customers by providing a percentage of the contact volumes or historical purchases. In such event, petroleum contingency plans could be used to assure that essential public and emergency fuel needs could be met. The U.S. Strategic Petroleum Reserve provides a significant safeguard to prevent the need for such actions should an international oil shortage occurs. In addition, an international oil sharing agreement by involving the US, European countries an others countries is intended to mitigate the effects of a major oil shortage by sharing their crude oil supplies.

Emergency Management Division (EMD), Department of State Police

The state emergency management legislation (1976 PA 390) was enacted in December 1976 and amended in April 1990. This Act replaced Michigan's Civil Defense Act and broadened the scope of emergency management. Act 390 also brought the state into compliance with provisions of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288, as amended), which provides federal assistance in declared (by the President) emergencies or major disaster situations. According to Act 390, the Director of the Department of State Police is responsible for:

• Making recommendations to the Governor and implementing the orders and directives of the Governor in the event of a disaster.
• Coordinating all federal, state, county, and municipal disaster prevention, mitigation, relief, and recovery operations within the state.
• Preparing and updating the "Michigan Emergency Management Plan."
• Administering state and federal disaster relief funds.
• Assigning general missions to the National Guard or state defense force to assist disaster relief operations.
• Maintaining a division within the department to coordinate the pre?disaster emergency service activities of federal, state, county, and municipal governments.

The EMD is responsible for the ongoing development and maintenance of the "Michigan Emergency Management Plan" (MEMP) that outlines the general operating procedures of various state agencies in responding to a disaster. The MEMP contains procedures for responding to a variety of disasters, including nuclear power plant accidents, enemy attack, natural disasters and technological disasters.

The Michigan Emergency Management Advisory Council was also established under Act 390 and is composed of up to 15 members appointed by the Governor with the advice and consent of the Michigan Senate. The Council is charged with advising the Governor and the State Police Director on matters of planning for the utilization of state resources and facilities in the event of a disaster.

Departments of state government are responsible for developing the capability to carry out emergency assignments within the scope of their normal area of operations, or as requested by the Director of the Department of State Police. In addition, each department and agency of state government required by the MEMP to provide an annex to that plan must employ or appoint an emergency management coordinator who acts as liaison between the department or agency and the Department of State Police in all matters of emergency management.

Michigan Homeland Security Task Force

On April 15, 2003, Governor Jennifer Granholm signed Executive Order No. 2003-6 which created the Michigan Homeland Protection Board to take up the work of the Homeland Security Task Force. By moving from an Executive Directive to an Executive Order, which has the force of law, the Governor has taken a step to which further enhance the importance of assuring the protection of the citizens and business of the state of Michigan.

The purpose of the homeland security provisions of Executive Order No. 2003-6 are to " . . detect, prepare for, prevent, protect against, respond to, and recover from violence or threats of violence from terrorist attacks or threats, . . .". To that end, the Michigan Homeland Protection Board (Board) is vested with the necessary structure and authority to carry out that mission. The Director of the Michigan State Police is the Director of Homeland Security and, the Deputy State Director of Homeland Security is the commanding officer of the Emergency Management Division and the Deputy State Director of Emergency Management.

The Assistant Adjutant General is the Chief Advisor for Homeland Security. The Assistant Adjutant General also serves as the Governor's liaison to the State Police and the State Agencies regarding development of policies, programs and procedures to protect, enhance and manage Michigan's homeland security.

The Order also established the Board, which is intended as an advisory body to the Governor within the State Police. The Board will develop, implement and revise as needed, a coordinated Homeland Security Strategy. The Board consists of the directors of: State Police, Agriculture, Civil Rights, Community Health, Environmental Quality, Information Technology and Transportation and will be chaired by the Director of State Police. The Assistant Adjutant General will also attend meetings of the Board, and act as Executive Secretary to the Board. The Board may establish committees and subcommittees, as it deems advisable.

Regional Coordination

Provisions of Federal Public Law 101-440 require submission of a state energy emergency plan to the DOE. This law also requires that the plan include provisions for regional coordination, which differs according to the energy sources involved and is tied to the structure of the energy distribution network.

The National Association of State Energy Officials (NASEO) in coordination with the DOE, the Energy Information Administration (EIA) and the Office of Emergency Operations developed a program that encourages regional exchange of information. Under the agreement, if states have an energy emergency situation that is multi-state in nature, an Energy Emergency Information Coordinator (EEIC), as specified by the program, will use e-mail telephone notifications to keep other states in the region informed of the problem and identify corrective actions the states may have to take in response.

Electricity coordination is handled through East Central Area Reliability (ECAR) council, which is responsible for assuring reliable and adequate generation and transmission to meet electric service needs. ECAR members are electric utilities operating in the region; regional emergency procedures have been established. In addition, MPSC staff and other state public utility commissions' staff attend ECAR committee meetings.

A government response to a petroleum shortage would be largely coordinated through state energy offices in the Midwest. Given the petroleum distribution network that supplies Michigan, coordination would involve the states of Ohio, Indiana, Illinois, and Wisconsin. Depending on the nature of the problem and the level of response, coordination with the Province of Ontario, Canada, may also be useful.

Natural gas curtailments would be coordinated by local distribution companies and, if more wide spread, by interstate pipelines. As with electricity, regional coordination would involve contacts between natural gas suppliers and state public utility commissions.