Michigan’s energy vulnerability exposed by natural gas scare, bitter cold

Two days of bitter cold and a fire at a Consumers Energy facility strained the delivery of natural gas in Michigan this week, highlighting what experts say are vulnerabilities in the system.

Update: Consumers Energy chief: We’re making changes after natural gas crisis

LANSING — Gov. Gretchen Whitmer wants Michigan to learn from this week’s natural gas crisis that highlighted vulnerabilities in the state’s energy grid during bone-chilling weather.

Whitmer, a Democrat, on Thursday called on the state Public Service Commission to investigate the state’s supply — and deliverability — of natural gas, electricity and propane, and examine contingency plans. An initial report is due July 1.

The move came after Consumers Energy, one of the state’s two mammoth utilities, struggled to keep gas flowing to 1.8 million customers after a fire knocked a gas compression station offline during the coldest weather Michigan had seen in decades.

“It’s important we get a handle on what’s happened here and how we make sure that we are in a stronger position the next time we confront something of this nature,” Whitmer said at a press conference Thursday.

Experts call the scare a reminder of Michigan’s multi-billion dollar infrastructure challenges and opportunities for utilities to cut energy demands through efficiency.

Here are a few things to know.

What happened?

A fire Wednesday morning at Consumers’ Ray Natural Gas Compressor Station in Macomb County walloped the company’s supply during a polar vortex.

“In our 130 years, we’ve never experienced this kind of demand or these kinds of temperatures,” Patti Poppe, Consumers president and CEO, said Thursday.

[Disclosure: Consumers’ philanthropic arm, the Consumers Energy Foundation, and the state’s other major energy provider, DTE, are funders of The Center for Michigan, a nonprofit organization of which Bridge is a part.]

During Wednesday’s sub-zero temperatures, the utility moved a record 3.3 billion cubic feet of gas throughout the state, up from 2.5 billion cubic feet on a typical winter day, Poppe said.

The company had enough gas to meet demand, she said, but needed extraordinary measures to keep it flowing to customers after the fire.

Among other things, the utility and Michigan asked residents statewide to turn down thermostats to 65 degrees until midnight Friday. It rerouted gas supplies from other facilities and pipelines, while large industrial customers also reduced gas use, including automakers that shut down plants.

Warren Mayor Jim Fouts announced on Facebook that his entire city –  the third-largest in Michigan – was due to have gas cut until the auto plants went idle. (Consumers disagrees with the account.)

The measures –  which included sending mass alerts to mobile phones asking residents to conserve –  reduced gas demand by 10 percent.

The mishap brought to light that the Ray compressor station, which consists of three plants, collectively handles some 64 percent of Consumers’ gas in Michigan.

Whitmer said she’s concerned the company is so reliant on one facility. The state needs more reliable energy sources, she said, because more volatile weather is likely due to climate change.

Vulnerable infrastructure

Consumers has not said what caused the fire. But the episode came as the state’s utilities have dramatically boosted spending to replace aging gas pipelines and other equipment.

Poppe said she would not attribute the fire to old equipment because the Ray facility had seen significant upgrades.

The federal Pipeline and Hazardous Materials Safety Administration has flagged about 5,688 miles of “at-risk” natural gas pipe in Michigan, about 50 percent of those in agency’s the 11-state Central Region. Michigan has about 66,000 total miles of natural gas pipelines.

(At-risk pipelines are defined as unprotected and protected bare steel, unprotected coated steel, cast or wrought iron, and copper pipe that is more susceptible to corrosion or leaks.)

In 2016, a commission assembled by then-Gov. Rick Snyder called replacing those pipelines “one of the state’s most pressing issues regarding its energy future.”  

Consumers is in the sixth year of a $2 billion plan to replace 2,200 miles of its 28,000-mile gas distribution network.

Pleas for efficiency

Consumers’ pleas to cut gas demands illustrated the importance of efficiency, experts say. Energy conservation also cuts pollution and lowers energy bills.

Bill Rustem, a former adviser for Michigan governors and an expert in environmental policy, noted his home wasn’t straining gas supplies because he had invested in an ultra-efficient groundwater heat pump to stay warm.

He said Michigan, whether through new incentives or tax credits, has big opportunities to encourage residents to weatherize homes and cut energy use.

“Where do you put your money is the basic question. Do you build more capacity  so you can pump more gas — and send out more gas, or do you conserve?” Rustem said. “We still have a whole lot of houses in Michigan that aren’t very well insulated, but people can’t afford to do the insulation.”

Douglas Jester, a partner at 5 Lakes Energy, a Lansing-based clean energy consulting firm, said a program at the City of Holland’s municipal utility holds promise for helping residents pay for efficiency upgrades: on-bill financing.

That allows customers to borrow money for upgrades and repay that loan on the utility bill. If done correctly, customers would save more on monthly energy costs than they would pay towards the loan.

Jester said Michigan utilities outside of Holland have yet adopt on-bill financing, which the Legislature authorised under a landmark energy reform of 2016.

The state’s energy overhaul requires utilities to submit “integrated resource plans” to the Public Service Commission for approval. These are essentially roadmaps for ensuring reliable, lowest-cost options for customers.

Consumers makes energy efficiency a key piece of its plan, through “demand response” — paying people to ramp down energy use at peak demand times — and other tools.

“The increased use of demand management tools such as energy efficiency and demand response programs will give customers more control over their monthly energy bills, equipping them to save energy and money over the long term,” the plan’s executive summary says.

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David E Richey
Fri, 02/01/2019 - 9:13am

Why is this a problem? What other priorities have stepped in line in front of safe and reliable gas supply for our citizens? Everyone can pick something...I pick free lifetime health care coverage for our do- nothing elected officials...that got slipped through years ago and infrastructure never got a mention. Do you think this will change? I don't. Unless the folks who would stand to benefit from the huge expenditure start making campaign donations...and that brings up another problem...

Fri, 02/01/2019 - 9:30am

Hopefully your reporters can clear up an issue about gas suppliers/providers. Many of us In West Michigan, including Grand Rapids, receive its natural gas from DTE. Does DTE buy gas from CE? The announcement from the governor was vendor specific , so what’s the deal? Also, the independents that homeowners can subscribe, were they affected as well?
Thanks so much for being here for Michiganders!

Sat, 02/02/2019 - 12:46pm

First: there's a lot of sharing in a network .. so, yes, everyone should have helped.

Second: we did dial down, with all the panicked calls for support.

We then found out that because our furnace is in a garage store room .. it went *cold* .. because the vents need *some* heat. We should have left the thermostat at 70. Our house got to 59 degrees, before we could get it running again.

This just shows the fallacy of listening to the Lou Anna Simons and Larry Nassars of the world. IMHO, listen to yourself first. Stupid can't be fixed.

David Andrews
Fri, 02/01/2019 - 9:58am

Were it not for the foresight of Consumers Power Company in the 50s and 60s to build the Gas Storage Fields, thousands of Michigan homes would have totally lost heat and today would be thawing and repairing pipes and calling their water and mold specialists. Does anyone remember Ohio during the last extended below zero period (70s or 80s)? They not only shut down industry, but still lost gas to homes in the state - Homes in Ohio were only being maintained in the 30-40 degree range - and Michigan was toasty warm and actually supplied gas to Ohio.

Michigan proved the invulnerability of power sources in Michigan again this week.
On the Electric side, Consumers Energy and Detroit Edison (Now DTE) stopped the last two mega-major electricity outages going back to the big one in 1965 that took the whole of the NE US and much of Ontario, but was stopped at the disconnects with Michigan.

It is so nice to live in a state where we know we can flip a switch and get light to bump up the thermostat when we are cold. Thank You to Consumers Energy and DTE!

Fri, 02/01/2019 - 10:07am

With insurance companies penalizing home owners for burning wood, a renewable resource, significant tax incentives would aid in the shift to other energy alternatives. They must also put a cap on the Energy Companies pricing increases once the demand for their services decreases.

Doug L
Fri, 02/01/2019 - 10:56am

This current gas supply emergency has highlighted how fragile and near capacity our gas infrastructure is. The electrical power generation plants are slowly being converted from coal to natural gas. These plants currently consume ship or train loads of coal on a regular basis. It appears that we would have been in serious trouble if the conversion had already taken place, with no heat and no electricity. At the least, the gas delivery infrastructure needs to be improved before converting more coal fired plants to natural gas. Or we need a better plan for electrical generation.

Marty F.
Fri, 02/01/2019 - 5:24pm

Doug, I'm confused by your comment about coal. As I understand it, coal-fired plants are used to create electricity, not heat for your home. With the exception of relatively few homes that are heated by baseboard or by electrically-run heat pumps, homes are most commonly heated by gas or oil furnaces. Note that the problem in the last few days was not with the gas supply -- from the article above: "The company had enough gas to meet demand, she said, but needed extraordinary measures to keep it flowing to customers after the fire." The problem was moving the gas through the system due to the fire at the Ray gas compression facility. The use of coal in electrical generation has no bearing on that issue. You're mixing apples and oranges.

Fri, 02/01/2019 - 11:49am

So everyone in charge has said natural gas is the only way to go and we're rapidly moving to 90% NG dependent for everything from electricity to heat. And oh yeah, wind and solar!! Always seems to be a problem eventually.

Fri, 02/01/2019 - 2:03pm

We need competition 2 goverment regulated utilities come on cronry capitalism

Fri, 02/01/2019 - 3:23pm

This disaster proves we need to shut down Line 5 or switch to renewable energy. I’m a democrat and don’t know what I’m talking about, but it sure sounds good.

Barry Visel
Sat, 02/02/2019 - 1:59pm

A fire at a major compressor station during record low temps, but no one lost heat and 65* isn’t a very cold heat setting. Sounds like the system worked pretty good to me. I’m sure Consumers did some scurrying to keep gas moving, but they were successful. Hope the Gov doesn’t mess up a good thing, especially if she calls for apparently unnecessary investment that will lead to higher utility bills for a problem that didn’t happen.

Barry Visel
Sat, 02/02/2019 - 6:25pm

Looks to me like the system worked. Consumers Power had to scramble but no one lost service. I’d call that a pretty robust system given the challenges they faced. So, what’s to review? One thing might be whether the Public Service Commission ever denied or reduced capital improvement requests from Consumers that would have made the system stronger? Utilities can’t just spend money without PSC approval for recovery of those investments.

Sun, 02/03/2019 - 8:03am

If the rethuglicans can get out of the way maybe increases on infrastructure spending for GREEN ENERGY can actually happen.