Statewide Energy Assessment finds energy supply, delivery adequate, but identifies areas for improvement
FOR IMMEDIATE RELEASE July 1, 2019
MPSC sends to Governor initial report, ordered after polar vortex, natural gas plant fire
LANSING, Mich. – The Michigan Public Service Commission today submitted to Gov. Gretchen Whitmer an initial Statewide Energy Assessment, which found that Michigan’s energy supply and delivery systems are adequate to meet customer needs. The report also makes 36 recommendations for the MPSC, regulated utilities, policymakers, and others which would add resiliency to the state’s energy systems.
The report was requested by the Governor in the wake of a polar vortex that blanketed Michigan on Jan. 30 and 31 while at the same time a fire at Consumers Energy Co.’s Ray Compressor Station in Macomb County disrupted the availability and deliverability of natural gas. The MPSC was asked to evaluate whether the design of electric, natural gas, and propane delivery systems are adequate to account for operational problems, changing conditions and extreme weather events, and also provide recommendations to mitigate risk (Case No. U-20464).
“This winter, Michigan faced some extreme weather conditions, especially during the polar vortex. I’m grateful to the businesses and residents who stepped up to help one another and our state,” Gov. Whitmer said. “Moving forward, this report will help to inform our next steps in assuring all Michiganders have reliable access to energy when they need it at home, at school, and at work. With the transition to more renewable energy resources and the growing impact of climate change it is imperative that our utility infrastructure can meet the changing demands while keeping rates affordable and protecting the environment.”
“This detailed State Energy Assessment provided the opportunity for the Commission to examine whether Michigan’s residents and businesses are able to receive safe and reliable energy service during times of great challenges due to abnormal weather and untimely system failures,” said Sally Talberg, chairman of the Commission. “The Commission Staff examined both shortcomings and strengths of the electricity, natural gas, and propane sectors. Overall, the energy system is strong, but would benefit from increased resilience, strengthened infrastructure interconnections, and improved communication.”
To develop the assessment, five work groups – electric; natural gas; propane; cyber and physical security; and energy emergency management – worked with regulated and non-regulated utility providers. The MPSC hosted more than 40 internal and external meetings and conference calls to coordinate data collection and review. The more than 220-page report makes 36 recommendations within the scope of the Commission’s jurisdiction and 14 observations outside of the Commission’s jurisdiction. The Commission will continue its work with stakeholders to finalize this report.
Among the initial assessment’s findings:
- Michigan has sufficient and unique assets that help ensure reliable supply and delivery of energy to help meet peak demand.
- Market structures and regulatory oversight ensure needed investments are made in energy supply and delivery.
- Although Michigan’s energy infrastructure is designed and operated to maintain energy supplies and deliver during emergency conditions, there is an inherent risk of disruption due to security threats, extreme weather, changing electricity supplies, and other factors.
- While the probability of a major emergency that disrupts energy supplies is low, such events could have a high impact on the economy and well-being of Michiganders.
- The polar vortex and Ray fire highlight the need for continued vigilance in assessing Michigan’s energy landscape and emergency management response systems.
- Undertake long-term risk-based, integrated natural gas maintenance and infrastructure planning that includes storage, transmission, and distribution assets as well as long-term risk mitigation plans.
- Better integrate five-year distribution and transmission plans as part of utility integrated resource plans to ensure truly integrated electricity system planning. This should include examining options to expand Michigan’s electrical connections between its peninsulas and with neighboring states.
- Work with stakeholders to understand the value of resource supply diversity to better inform decisions related to power plant development, retrofitting, and retirement beyond traditional planning and financial analyses.
- Identify revisions to natural gas utility curtailment procedures to prioritize home heating over electric generation.
- Improve electric demand response programs since some customers did not respond as expected during the polar vortex and utility tariffs were inconsistent. Also, natural gas utilities should develop similar programs as an alternative to broad emergency appeals.
- Enact rules for cyber security and incident reporting for natural gas utilities.
- Expand emergency drills to provide a range of scenarios besides outage management and restoration. Communication related to the Ray event and the polar vortex was confusing, inconsistent, and erratic.
- Develop a formal contingency plan for the continued supply and delivery of propane or other energy alternatives in the event of supply disruptions, including a temporary or permanent shutdown of Line 5.
- Continue to solicit propane market information from suppliers and create an annual retail propane survey to monitor market trends and gain market insight.
The Commission will establish a time period where the public can comment on the initial report in the docket for Case No. U-20464. A final report is due to the Governor by Sept. 13, after which the Commission will direct utilities to take appropriate action to address any shortfalls identified in the assessment.
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