State of Michigan Announces the Michigan Propane Security Plan
LANSING, Mich. — The State of Michigan announced the MI Propane Security Plan, a multiagency effort with the Michigan Public Service Commission (MPSC); the Michigan Department of Environment, Great Lakes and Energy (EGLE); the Michigan Department of Transportation (MDOT), and the Department of Technology, Management and Budget. The five-point plan is focused on ensuring Michigan’s energy needs are met when Enbridge’s Line 5 oil pipelines that run through the Great Lakes shut down.
This plan protects propane customers from price gouging; sends clear signals to encourage market participants to invest in alternative sourcing options; ramps-up state investment in rail and propane storage infrastructure; increases state monitoring of the propane industry and coordinates the response to potential disruptions; and sets a long-term path to lower energy costs through investments in renewable energy, energy efficiency and electrification.
“The Michigan Public Service Commission takes seriously our responsibilities relating to energy planning and security, regardless of what the future holds,” said MPSC Chair Dan Scripps. “This five-point approach will allow us to better protect consumers and ensure that Michiganders have access to the energy resources on which they rely.”
“Under Governor [Gretchen] Whitmer’s leadership, the U.P. Energy Task Force has been working hard and remains focused on assessing the energy needs for the Upper Peninsula and how those needs are being met. We’ve been working on how to best formulate alternative solutions for meeting those needs while focusing on security, affordability, and environmental soundness,” said Liesl Clark, director of EGLE. “This multiagency plan takes the recommendations from the task force and implements them in a real way that will positively impact Michiganders, businesses, and our economy.”
“As we move forward with repairing and improving our infrastructure across the state, this moment creates an opportunity for us to increase reliability and resiliency in our energy delivery systems,” said Paul Ajegba, director of MDOT. “MDOT remains committed to ensuring all energy options are delivered safely and efficiently across our state.”
Since early in 2019, the Whitmer administration has been preparing for potential alternatives to ensure energy security for both of Michigan’s peninsulas in the event of a Line 5 closure. This work started with the Statewide Energy Assessment in January 2019 and continued with the creation of the U.P. Energy Task Force (UPETF) in July 2019 and other informal workgroups. The administration is implementing recommendations from these bodies.
While many state government efforts are already in place to help support Michiganders’ energy needs under Governor Whitmer’s direction, this five-step plan further ensures propane security for the residents of our state and businesses. The plan details:
- Protect consumers from price gouging and provide accessible heating assistance for families in need. The attorney general’s Corporate Oversight division currently handles consumer complaints related to propane price gouging and has a zero-tolerance policy for price gouging under existing laws. The administration has worked to increase funding and restructure state assistance programs to allow for faster processing of bill payment assistance and to make access to benefits easier for Michigan’s most vulnerable households, including the needs of propane customers.
- Send clear signals to encourage market participants to invest in the development of alternative propane sourcing options. In November 2020, Governor Whitmer and the Department of Natural Resources (DNR) notified Enbridge they were terminating its easement to run an oil pipeline through the Great Lakes based on persistent and incurable failures to comply with the terms of the easement. Additionally, the governor and DNR also revoked the easement under the governor’s public trust responsibilities. It’s an unacceptable risk the current dual pipelines pose to the Great Lakes’ health and millions of jobs across the region. This action sent as clear a signal as possible to propane retailers and other propane suppliers, who are responding to this opportunity.
- Leverage the tools of state government to encourage the development of alternative sourcing options. The state is working with industry to secure alternative propane deliverability and sourcing options like pipelines, rail, and storage. Governor Whitmer’s FY 2022 Executive Budget Recommendation includes strategic investments to assist with the propane transition, including funding for new rail infrastructure and storage of propane at rail yards, and planning grants for local development organizations to ensure strategic infrastructure planning and the development of local supply alternatives to deliver propane. To protect Michigan residents during the 2021-2022 heating season, the state will prioritize propane storage, as Michigan has some of the nation’s largest propane reservoirs. In addition, the state is working to pre-buy propane to lock in supplies for Michigan, and is aggressively identifying other sources for propane beyond Line 5.
- Monitor propane supply and coordinate responses to potential disruptions with the energy industry. MPSC houses the Propane Monitoring and Assurance Program within its Energy Security Section. Through this program, the MPSC performs several critical functions, such as monitoring state, regional, and national energy supplies, infrastructure outages, and other factors that could cause an energy imbalance; participating in coordination calls with industry and governmental agencies to share information on propane supplies, price and potential disruptions; and maintaining and updating the Petroleum Shortage Response Plan to manage limited supplies and reduce overall demand.
- Maximize propane efficiency while reducing energy costs in Michigan through efficiency, weatherization, and the transition to electrification and renewable energy.
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