After almost 10 months of research, presentations and meetings, Gov. Gretchen Whitmer’s U.P. Energy Task Force has released a draft of its recommendations for the state’s Upper Peninsula to lessen its dependence on propane from the Line 5 pipeline and look at alternative energy solutions for Michigan’s northernmost region.
Public comments on the draft recommendations can be sent to [email protected] through April 6.
Those 14 recommendations, half of which would require action from the state Legislature, are aimed at strengthening the U.P.’s access to propane, while taking into account several different scenarios of supply disruption.
About one-quarter of Michiganders living in the U.P. rely heavily on propane to heat their homes, especially during the cold winter months. Much of that propane comes from Line 5, the controversial oil pipeline owned by Canadian company Enbridge.
Enbridge is currently embroiled in several legal challenges with the state over Line 5, which runs across the length of the U.P. before stretching for miles under the environmentally-sensitive Straits of Mackinac that connect lakes Michigan and Superior.
In response to concerns over the aging pipeline’s structural integrity, Enbridge made a deal with Republican former Gov. Rick Snyder to replace the old Line 5 with a new tunnel-encased dual pipeline under the Straits. The GOP-led Legislature passed legislation in the 2018 Lame Duck session that aimed to tie the hands of the incoming Democratic administration in reversing it.
A major disruption in propane supply has the potential to leave many in the U.P. without heat, which has been a sticking point in the debate over whether to decommission Line 5.
Gov. Gretchen Whitmer created the U.P. Energy Task Force through executive order in June, after talks with Enbridge over a timeline to decommission the pipeline fell through and Enbridge filed a lawsuit against the state. The task force was charged with assessing the U.P.’s energy needs and formulating alternative solutions to Line 5 propane.
The task force is set to meet next month to do a deeper dive on the whole state’s energy needs, and its next report is due next year.
Enbridge spokesperson Ryan Duffy said in an email that the company “appreciates the findings of the Task Force and its thoughtful recommendations,” and has “supported the U.P. Energy Task Force and the process involved in putting together its report.”
Sean McBrearty, campaign coordinator for the anti-Line 5 Oil & Water Don’t Mix coalition, said that the report and recommendations amount to a call for action to start decommissioning Line 5.
“It isn’t just the Great Lakes that are at risk from Line 5, it’s also the independence and safety of U.P. residents who rely on propane to heat their homes that are in jeopardy,” McBrearty said.
“As Gov. Whitmer pointed out when she created the U.P. Energy Task Force, we are one mistake away from a Line 5 catastrophe. Michigan needs better energy choices, and U.P. residents and retail propane distributors shouldn’t be forced to rely on just one or two Canadian companies to meet their needs.”
McBrearty added that while Whitmer is understandably focused on the major health crisis caused by COVID-19 at the moment, the threat posed by Line 5 to the Great Lakes still requires urgent action.
The task force examined several different scenarios that would call for an alternative supply to be adopted, including a disruption of Line 5, extreme weather events and a disruption of Enbridge’s Line 1, which supplies Canadian propane to Line 5 through a hub in Superior, Wisc.
Taking into account these scenarios and the surrounding factors, the task force recommends strengthening the alternative delivery methods of rail and trucking to deliver propane to the U.P. The current supply infrastructure depends heavily on pipeline delivery, which could lead to shortages if the pipeline supply was disrupted without alternatives.
Other recommendations address Michigan’s storage capacity for propane, which is considerably greater in the Lower Peninsula than in the U.P. The task force also looked into ways to alleviate the disproportionately high propane costs that U.P. residents face.
The task force recommends the following actions for the state Legislature to consider:
- Create a customer storage incentive program to encourage retailers to work with customers to maximize the amount of propane in customer storage throughout the heating season.
- Explore a storage incentive program to encourage wholesalers and retailers to create more propane storage capacity.
- Review the Freight Economic Development Program to determine whether revisions are needed to encourage diversification of the supply infrastructure, including the expansion of propane delivery by rail.
- Explore adopting fuel price gouging legislation, using the Wisconsin law as a potential model.
- Increase funding for weatherization to help reduce long-term resources needed by low-income customers to pay utility bills.
- Engage the Michigan Propane Gas Association about the potential of levying a small surcharge on propane fuel to target a weatherization program for Michigan propane users.
- Establish a designated fund to pay for basic home repairs needed to make residences eligible for federal, state, and utility-sponsored weatherization assistance.
Gideon D’Assandro, spokesperson for House Speaker Lee Chatfield (R-Levering), said Chatfield is “still reviewing” the report and does not have anything to share just yet.
Chatfield has been very supportive of Enbridge’s tunnel project, which is slated to be built in his district.
A spokesperson for Senate Majority Leader Mike Shirkey (R-Clarklake) did not respond in time for publication.
Recommendations for the Michigan Department of Technology, Management and Budget (DTMB):
- Explore whether the state could contract for propane in such a way that the equivalent of a strategic propane reserve would be created, to be used in case of a disruption.
- Work with the Michigan Department of Health and Human Services (DHHS) to determine if the state could contract for propane in such a way as to have a resident’s tank filled on a state account, and therefore potentially at a lower cost.
- Explore whether the department can revise the method by which it contracts for propane, to potentially go beyond just serving to supply state facilities, and provide other benefits associated with added storage capacity or serving low-income residents eligible for bill payment assistance.
Recommendations for the Michigan Department of Transportation (MDOT):
- Review the ratings of Michigan rail lines provided by the rail carriers and make a recommendation to the state Legislature about any needed upgrades to facilitate propane distribution, if necessary; and inventory the spur lines (very short secondary railway lines) in the U.P. to determine if some could be used to park propane rail cars in the case of an energy emergency.
Recommendations for the Michigan Public Service Commission (MPSC):
- Identify and monitor factors that can cause or contribute to a propane shortage or disruption that could affect Michigan customers, then develop specific steps to be taken by the state in response to those identified warning signs they are monitoring.
- Require one standard application for use by all regulated utilities for customers seeking weatherization and/or bill payment assistance, and require utilities that serve the same location to harmonize their eligibility requirements as much as possible.
Recommendations for the Department of Health and Human Services (DHHS):
- Review assistance programs to determine if families in need could be identified in advance and their support crafted to allow them to participate in lower cost budget plans offered by propane retailers; have the state assist with payments when necessary.