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Michigan Energy Supply Monitoring
MPSC Staff conduct energy supply monitoring on an ongoing basis and keep track of energy developments as they pertain to Michigan, the region, and the nation through industry contacts, the EIA, internet, trade publications, and various statistical reports. Several independent and on-going assessments are regularly reviewed, including:
- Michigan Energy Appraisal – The Appraisal provides an overview of the balance between energy supply and demand, in Michigan and the region. Short-term trends are projected, along with an indication of expected prices. The adequacy of supply and weaknesses in the distribution system are examined to identify potential supply problems. These projections provide a benchmark for evaluating changing conditions over the next six-month period. The Appraisal examines natural gas, electricity, motor gasoline, distillate fuel oil (diesel), and propane.
- State Heating Oil and Propane Program (SHOPP) – Under a federal grant from the Energy Information Administration (EIA), staff monitors the weekly residential price of #2 home heating oil and propane through the winter heating season. The weekly survey calls are an important vehicle to assess supply and demand issues during elevated risk periods. This can help provide up-to-date information and an alert to developing shortages by location and severity.
- Short Term Energy Outlook - This quarterly EIA report forecasts prices, supply, and demand over the next year for electricity, coal, natural gas, and petroleum in the U.S. These projections are used in part to generate in the Energy Appraisal.
In the event that distribution problems or shortages occur special updates of the Energy Appraisal may be issued to select members of staff and management. These updates will serve as a vehicle for the distribution of both state-specific information, and information and analysis provided by the DOE.
Monitoring of Electricity System and Market
Day-to-day electricity supply/demand operations are monitored on a routine basis. There are several mechanisms for monitoring historic and projected price, supply, and availability of electricity. The Commission staff reviews the self-assessments provided by electric utilities regulated by the Commission, alternative electric suppliers, utility affiliates, and certain power supply cooperatives and associations on their ability to meet their customers’ expected electric requirements and associated reserves during the five-year periods. In addition, the Commission staff reviews MISO annual reports showing reserve margins for upcoming year. Other forecasted information includes expected price for fuel and outside power purchases, expected fuel and purchased power availability, plant outages, etc. Additionally, actual historic demand, generation, and power purchases used to meet the demand and the price of these supplies are provided by the utilities to the MPSC on a regular basis.
The Commission has asked the state’s major utilities to file a summer capacity assessment report. During summer months there are weekly conference calls between the utilities and MPSC staff to discuss the capacity situation. Any event that triggers an element of the emergency electrical procedures has requirements that the MPSC be notified when actions are taken at certain points and as the response measures escalate. Commission staff is also notified by phone when an event causes a customer outage greater than 50,000 customers for Consumers Energy, 75,000 customers for DTE or 10 percent of the customers of the state’s other regulated utilities.
Monitoring of Natural Gas System and Market
The MPSC's gas cost recovery (GCR) plan proceedings include an annual review of a five-year forecast of demand, supply, and price of natural gas. These proceedings provide an opportunity to regularly review and work with the utilities to address natural gas supply concerns. Utilities also submit 45-day GCR reports that provide shorter term consumption updates. Members of the MPSC staff hold periodic meetings with pipeline suppliers. Past experience in the natural gas area has demonstrated that inter- and intrastate natural gas pipeline companies, local gas distribution companies, and the MPSC staff can work together to avert natural gas supply emergencies. This is expected to continue even though many of the companies involved are in an increasingly competitive environment.
Natural gas markets have become more complex to monitor in recent years as a result of the direct purchase agreements between end users and alternative gas suppliers. This decentralization of purchasing has resulted in a significant decrease in available consumption and use information, and data historically received from the gas utilities. Adequate monitoring of natural gas requires information covering the quantity of interstate deliveries to local distribution companies, storage levels and injection rates, projected system send outs, spot market and contract prices, operational flow order notices, curtailment notices, gas facility outages, and heating degree days.
Monitoring of Petroleum System and Market
Because petroleum is distributed through a decentralized network, there is no single source of information by which to assess or characterize emerging problems. Anti-trust laws also prohibit oil companies from sharing information regarding supply availability and price. Consequently, petroleum information is either published by a third party (who can maintain the anonymity of sources) or is confidential and not available. Therefore, the state's role in developing data and assessing supply is more critical for petroleum products than it is for electricity or natural gas, where utilities control supply and distribution within franchised service territories.
Monitoring requires a variety of data, including petroleum product use, prices, inventories, production, and sources of crude oil. Petroleum supply infrastructure information, such as marine and pipeline terminals, their locations, and capacities, is also useful. A list of contact persons within major oil companies is also valuable information contained and regularly updated in the MPSC‘s emergency contact lists.