State of Michigan announces MI Propane Security Plan, others respond

The state says 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 is possibly shut down.
Published: Mar. 12, 2021 at 1:44 PM EST
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LANSING, Mich. (WLUC) - Friday, the State of Michigan announced the MI Propane Security Plan.

The plan is a multiagency effort with the Michigan Public Service Commission; the Michigan Department of Environment, Great Lakes and Energy; the Michigan Department of Transportation, and the Department of Technology, Management and Budget.

The state says the five-point plan (outlined below) is focused on ensuring Michigan’s energy needs are met when Enbridge’s Line 5 oil pipelines that run through the Great Lakes is possibly 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 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.”

Some Upper Peninsula lawmakers on Friday issued the following statement after the announcement:

“Environmentalists within state bureaucracy today continued the campaign of misinformation against Line 5 — a vital source of energy and jobs to the U.P. and the state of Michigan,” said Sens. Ed McBroom and Wayne Schmidt and Reps. Beau LaFave (R-Iron Mountain), Greg Markkanen (R-Hancock), and John Damoose (R-Harbor Springs). “More astounding than the misrepresentation that is this so-called security plan, is the state’s demonstrable ignorance about Line 5 and all that it supports.

“Of particular importance to the U.P., this plan will cost taxpayers significantly, while limiting the free market and competition and, at the same time, ignoring a $500 million viable solution currently on the table that would address problems and be completely paid for by the pipeline operator. The rehashed plan seems to contain all previously discussed ideas that have been shown not to work besides the call for price gouging checks. Further, nothing in this plan truly assures our small, family-owned propane businesses that they will be able to continue to operate and won’t be usurped through state control.

“Lastly, the plan announced today also leaves completely unclear whether Gov. Gretchen Whitmer is going to accept the popular Line 5 tunnel. At a time when truth and honesty are in short supply, she continues to play coy with the people of Michigan. So in addition to strongly denouncing this MI Propane Security Plan, we also call on the governor to stake out her position on the Line 5 tunnel, because we can’t have it both ways.”

State Representative Sara Cambensy (D) 109th District also issued the following statement:

“The Michigan Propane Security Plan released from the Governor’s office today is not a plan, but rather more vague ideas that try to appease environmental groups. The plan is completely void of the professional details necessary to make such an enormous shift in energy supply to residents. A real energy business plan of this magnitude would have an actual timeline that reflects the new energy site selections, contractors, suppliers, detailed work to be completed at well-defined intervals, permitting and a cost summary that identifies who the financial burden of the project falls on. What’s been presented to the public today reaffirms that the energy security Line 5 gives Michigan is nothing more than a political game to satisfy a campaign promise the Governor made. I’m deeply concerned that her administration continues to push an unrealistic energy plan that’s more focused on the ideals of environmental groups rather than the logistics of our rural geography, the industrial energy load needs and the rural residents who live here. This isn’t leadership. Rural Michiganders deserve better.”

Since early in 2019, the state says 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 state said in a release.

The state agencies say 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 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.
  • To view the full the plan, click here.

Plan endorsements

The plan has received endorsement from the Sault Ste. Marie Tribe of Chippewa Indians, For Love of Water (FLOW), the Upper Peninsula Propane Research Team and Oil & Water Don’t Mix.

“The Governor and AG Nessel promised to move to shut down Line 5 due to the catastrophic threat it represents to our natural resources in our traditional homelands and treaty territory,” said Aaron Payment, Sault Ste. Marie Tribe of Chippewa Indians’ Chairperson. “The scare tactics used by Enbridge regarding the price and supply of propane are dirty, manipulative — and, I might add, crude — politics, much like its industry. The Governor’s assurances and plan to ensure both the supply and stable price for propane cut the legs out from under Enbridge’s machinations.”

“The administration’s plan protects the health and safety of Michiganders by moving us away from the ticking time bomb of an old, damaged, dangerous oil pipeline in the Straits of Mackinac and embracing concrete actions to secure the state’s propane supply and protect energy consumers,” said Liz Kirkwood, Executive Director for FLOW. “Michigan’s energy needs can be met without Line 5, and we can’t afford another Enbridge disaster like the Kalamazoo River oil spill.”

“We have studied propane supply, and building up storage capacity is a key action to avoiding any disruption in energy supply in the Upper Peninsula when Line 5 is shut down in the Straits of Mackinac,” said Rosemary Grier of the Upper Peninsula Propane Research Team. “This is a good plan, very doable and would take us on a path toward the kind of energy security we need here in the U.P.”

“Enbridge’s massive fear campaign wants to scare us away from shutting down Line 5,” said Sean McBrearty, Oil & Water Don’t Mix campaign coordinator. “But the reality is the only thing we have to fear is a foreign oil company’s nearly 70-year-old pipeline that is decades beyond being able to operate safely.”

Consumer reminder: Propane price gouging

After the announcement, Attorney General Dana Nessel reminded residents of the crucial role they play in reporting price-gouging and other consumer protection issues related to the energy and propane industry.

“Price-gouging is against the law, and the energy industry is not exempt from those regulations,” Nessel said. “This office has taken legal action in the past to protect people from excessively high energy prices, and I will not hesitate to do so again to protect the pocketbooks of Michigan’s consumers.”

Consumer complaints can be filed online at the Attorney General’s website, or by calling 877-765-8388.

This story will be updated as more information becomes available.

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