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Mich. energy delivery system safety, resilience under scrutiny after fire

Michigan regulators are re-evaluating issues of safety and resilience across the state's energy systems after a fire that jeopardized reliable gas service for almost 2 million customers during a severe cold snap this winter.

A Jan. 30 fire at the Ray compressor station dealt a blow to a central part of Consumers Energy Co.'s gas delivery system at a crucial time. During a period of record demand and frigid temperatures, the utility had to urge its 1.8 million gas customers to limit usage. The disruption led Gov. Gretchen Whitmer to call for a statewide assessment of Michigan's distribution system for electricity, natural gas and propane.

The Ray compressor station is an exceptionally high-impact point on CMS Energy Corp. subsidiary Consumers Energy's system, and Consumers had been planning to rely heavily on that station during the late January cold.

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During the week of fire, operators forecast gas use to peak at 3.7 Bcf on Jan. 31, and the company had planned on Ray supplying about 45% to 50% of the demand that day, CMS Energy President and CEO Patti Poppe said. The utility had turn to supply from other storage fields and purchase gas from third parties with Ray out, Poppe said during a Feb. 20 Michigan House Energy Committee meeting, and the company later confirmed that interstate supplies were needed to replace gas that would have normally come out of the Ray storage field.

A subset of seven delivery points along six interstate gas pipelines that Consumers Energy can tap showed above-average scheduled gas capacity at five points on either Jan. 30 or 31 or both, according to a March 11 S&P Global Market Intelligence analysis. The heightened scheduled capacity, an indicator of gas demand, occurred at delivery points along the Great Lakes Gas Transmission LP, Vector Pipeline LP, ANR Pipeline Co. and Trunkline Gas Co. LLC systems.

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Even though the Ray compressor station is designed with three independent plants as back up or "triple redundancy," the fire at Plant 3 caused the entire station to temporarily shut. By Feb. 1, Consumers Energy resumed normal operations, according to a Feb. 7 PSC order.

On an day of normal demand, the Ray storage field provides about 20% of gas supplies, Poppe said. The field, which has roughly 48.1 Bcf of working capacity, could serve about 40% of Consumers' during standard winter demand, the company has said.

The Michigan Public Service Commission has directed Consumers Energy file a report on the incident itself by April 7 (Michigan PSC Docket U-20463), and the commission itself plans to assess in the coming months whether the state's systems are adequately prepared for changing conditions and extreme weather (Docket U-20464). The PSC expects to produce a draft assessment by July 1 and final assessment by Sept 13.

Michigan PSC Chairwoman Sally Talberg said she does not see the dockets necessarily leading to changes in the Ray compressor station configuration but expects the investigation and assessment to improve the state's and utilities' understanding of Michigan energy systems.

"I think what we want to understand is if there are approaches [or] cost effective ways where you could have greater redundancy in the [gas delivery] system," Talberg said Feb. 13 on the sidelines of policy forum held by the Energy Storage Association in Washington, D.C.

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Chairwoman Sally Talberg
Source: Michigan PSC

As part of the assessment, the commission plans to look at areas where the gas lines do not have a "looped system" with other points to bring in gas in case of outages, Talberg said. It would also be a chance for the agency to take a closer look at utility risk assessment models.

"When you get down to the more granular level when the utility does risk assessments, you know when this substation goes out, sometimes they have an alternative feed. Other times it is not the case," Talberg explained.

Appointed to the commission in 2013, Talberg also said "there may be changes to the commission's own rule, the way we approach planning and oversight of regulated utilities or recommendations to the regional transmission organizations," which include PJM Interconnection and Midcontinent ISO.

The findings could impact infrastructure approvals, particularly related to service quality and technical standards for both gas and electric, Talberg said. Some changes could take the form of updated technical standards such as those for clearance of power lines, she said.

"Are there best practices that can ensure the potential for quicker response?" Talberg asked. "I am not suggesting it is all sticks and being super prescriptive, but there may be things that we can do to enhance our rules to make sure customers are protected."

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