UP energy costs are high; without Line 5, they would be unaffordable

Michigan will grant $120 million in home heating credits this year

Michigan's Upper Peninsula has some of the highest electricity rates in America. In 2019, the UP’s energy rates were more expensive than even California’s.

But if Gov. Gretchen Whitmer and Attorney General Dana Nessel had been successful in their years-long (and ongoing) attempt to shut down the Line 5 pipeline, energy costs in the Upper Peninsula would be even higher. Consumers would have to pay anywhere from $3,400 to $3,800 more per year per household, according to Mackinac Center research.

Gretchen Whitmer last week encouraged residents of the UP to apply for home heating credits by the Sept. 30 deadline.

“Every family should be able to keep the heat on and stay warm and safe through our Michigan winters,” Whitmer said in remarks reported by FOX TV 6.

Michigan will give $120 million in home heating credits this year. Last year, the TV station reports, the average household got $216 in home heating credits. That’s about as much as Michigan spent last year on the Michigan Reconnect program, to connect adults to tuition-free community college. In recent years, taxpayer support for the home heating credit has been closer to $70 million. The growth this year owes to federal money.

“I will work with anyone to offer families real relief,” Whitmer added.

But as the Mackinac Center’s Derk Wilcox and Jason Hayes write in a Detroit News op-ed, Whitmer has opposed Line 5, which delivers liquid fuels to the UP, at every turn:

To reduce the risk of a possible leak into the Great Lakes, (pipeline operator) Enbridge and the state signed an agreement in 2018 that would allow the company to move the pipeline from the water, into a much more secure concrete-lined tunnel 100 feet below the lake bed. Enbridge was to cover the costs of constructing this new secure tunnel. But from their first days in office, both Whitmer and Nessel have worked to destroy that plan despite having no workable backup plan to supply energy.

Whitmer revoked Enbridge’s easement in November 2020, ordering all operations to be ceased by May 2021. Enbridge filed a federal court action, defending its legal rights, claiming the state did not have jurisdiction to order the pipeline’s closure. When the closure date arrived, Enbridge refused to cease operations unless a court ordered it to do so. Neither state nor federal courts have ordered Enbridge to cease operations, and the pipeline continues to transport essential fuels.

Energy costs in the Upper Peninsula are plenty high right now. How much bigger would the home heating subsidies need to be, if there were no Line 5?

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.