MPSC approves natural gas pipeline project that will improve reliability for customers in northern Michigan

FOR IMMEDIATE RELEASE July 27, 2021

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The Michigan Public Service Commission today approved a certificate of public convenience and necessity for a subsidiary of DTE Energy Co. to convert northern Michigan natural gas pipelines from unregulated wet gas gathering lines to regulated dry gas transmission lines that would serve as an additional supply source for areas of northern Michigan, adding a layer of resilience in the supply of natural gas for DTE Gas Co. customers in the northern Lower Peninsula.

The MPSC approved DTE Michigan Lateral Co.'s (DMLC) application (Case No. U-20894) under Public Act 9 of 1929 to convert the existing natural gas gathering pipelines, a $28 million project, and to build, operate and maintain two connector pipelines - the $7 million Rogers City Connector and the $13.9 million Norwalk Manistee Connector - between the existing system and DTE Gas transmission facilities serving customers in Manistee, Traverse City, Alpena and Rogers City, and surrounding areas.

Approval of the project provides redundancy to areas of the state that have, at present, only a single source of natural gas supply and will increase the resilience of DTE Gas's transmission system, the Commission found. Adding redundancy and diversifying sources of natural gas supply were key recommendations of the MPSC's 2019 Statewide Energy Assessment, a comprehensive review of Michigan's energy systems undertaken at Gov. Gretchen Whitmer's request after a statewide energy emergency declared during a polar vortex cold snap in January of that year. A fire at a Macomb County compressor station threatened to disrupt delivery of natural gas in Michigan, underscoring the need for diverse supply sources.

The Commission also approved a 20-year contract between DMLC and DTE Gas for firm transportation services on the converted and new pipelines, but the Commission ordered DMLC to file recalculated rates minus contingency costs within 30 days, due in part to the fact that DMLC was an affiliate of DTE Gas at the time the agreement was struck. Costs for the pipeline project will be recovered through rates DTE Gas will pay to DMLC for use of the pipelines. A determination regarding the recovery of these costs from DTE Gas customers will be made in a future DTE Gas case.

The Commission conditioned its approval on the completion of an alternative natural gas gathering system proposed by Lambda Gathering LLC to replace the system DMLC will convert, providing transport for 10 natural gas producers in the area, pending in Case No. U-21091, and on DMLC receiving all necessary permits and easements.

In addition to DMLC, the Michigan Department of Attorney General, North Bay Energy LLC, and Riverside Energy Michigan LLC intervened in the case. MPSC Staff also participated.

Separately, the Commission also approved DTE Energy Co. subsidiary DTE Michigan Gathering Co.'s request to implement new delivery point charges reflected in an Aug. 30, 2017, agreement with DTE Gas Co. (Case No. U-20994).

MPSC LOWERS FUNDING FACTOR FOR LOW-INCOME ENERGY ASSISTANCE FUND

The MPSC today set at 87 cents the funding factor for the Low-Income Energy Assistance Fund, which annually provides up to $50 million in home energy assistance and self-sufficiency services for thousands of vulnerable Michigan households (Case No. U-17377). The funding factor is a 4-cent decrease from the previous year. Each year, the MPSC sets the funding factor, capped at $1. The factor is collected monthly from each retail billing meter from participating investor-owned utilities, municipally owned electric utilities or rural cooperative electric utilities - no more than one meter per household - to raise funding distributed through the Michigan Energy Assistance Program, or MEAP.

MPSC SEEKS REPLIES TO INITIAL COMMENTS IN REVIEW OF RATE CASE FILING REQUIREMENTS

The MPSC is asking interested parties to file replies to comments received after the Commission in March 2021 sought stakeholder comment as part of a review of rate case filing requirements enacted after Michigan's energy laws were updated in 2016, including shortening the review period for rate cases from 12 months to 10 months (Case No. U-18238). The MPSC in 2017 approved amended Rate Case Standard Filing Requirements for electric, natural gas, and steam utilities and in March 2021 sought comments to examine what is and is not working under the requirements. The Commission now seeks replies to the comments as it reviews whether to revise filing requirements. Comments should reference Case U-18238 and must be received by 5 p.m. Aug. 11, 2021. They may be mailed to Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909, or emailed to [email protected]. Those needing assistance prior to filing may call 517-284-8090 or email [email protected].

MPSC APPROVES REQUEST OF DTE ELECTRIC, DTE GAS TO AMEND PAYMENT TERMS OF UTILITIES' SHUTOFF PROTECTION PLANS

The MPSC today approved an adjustment to optional shutoff protection plans (SPP) sought jointly by DTE Electric Co. and DTE Gas Co. (Case No. U-20712), reducing the number of monthly payments customers enrolled in SPP programs can miss before being removed from such programs from two missed payments to one. The SPP programs are designed to help senior and eligible low-income customers manage outstanding account balances by providing year-round service shutoff protection if customers make monthly plan payments following a down payment to enroll. The companies note that allowing two missed payments does not increase rates of successful completion of the payment program, and 80% of customers who fall behind on one payment end up defaulting. The approval aligns DTE Electric and DTE Gas with similar requirements in Consumers Energy Co.'s shutoff protection plan and will allow vulnerable customers the opportunity to seek energy assistance before arrears accumulate to a level where such assistance is reduced or denied. The approval will not result in an increase in the cost of service to customers.

MPSC DENIES DTE ELECTRIC CO. APPLICATION FOR OPTIONAL PREPAYMENT PROGRAM FOR UTILITY CUSTOMERS

The MPSC today denied DTE Electric Co.'s application for ex parte approval of a customer Prepay Program and a waiver of customer standards and billing rules for the optional payment plan for residential electric customers (Case No. U-21087). The Commission instead suggested that DTE Electric, should it wish to pursue the program, submit the application with a fuller explanation of customer benefits in an upcoming rate case or file it as a standalone contested case. DTE Electric says the goal of its Prepay Program, open to electricity-only customers with AMI smart meters, is to help customers understand their energy use and provide them with payment flexibility. Customers prepay for energy use but would have electricity service disconnected if they fail to make a payment before reaching a prepaid balance of zero dollars. The Commission shared concerns raised by a group of organizations including the Environmental Law and Policy Center; the Ecology Center; the Great Lakes Renewable Energy Association; Soulardarity; the Union of Concerned Scientists, and Vote Solar that DTE Electric's application lacked sufficient information about customer benefits of the program balanced against consumer protections enrollees would forfeit by enrolling in it.

MPSC APPROVES DTE GAS CO. DEFERRAL OF COSTS RELATED TO TRAVERSE CITY-ALPENA REINFORCEMENT PROJECT

The MPSC has approved DTE Gas Co.'s request (Case No. U-21102) for a one-time regulatory asset to defer transportation expenses related to its Traverse City-Alpena Reinforcement Project (TCARP) once contracts between DTE Gas and DTE Michigan Lateral Co., a DTE Energy Co. subsidiary, and Saginaw Bay Pipeline Co. are approved by the Commission in cases U-20894 and U-20993, respectively. TCARP is designed to provide a redundant supply of natural gas, improving reliability for about 91,000 DTE Gas customers in northern Michigan.

To look up cases from today's meeting, access the MPSC's E-Dockets filing system.

Watch recordings of the MPSC's meetings on the MPSC's YouTube channel.

For information about the MPSC, visit www.Michigan.gov/MPSC, sign up for its monthly newsletter or other listservs, or follow the Commission on Twitter or LinkedIn.

DISCLAIMER: This document was prepared to aid the public's understanding of certain matters before the Commission and is not intended to modify, supplement, or be a substitute for the Commission's orders. The Commission's orders are the official action of the Commission.

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