Public Service Commission ruling on the Line 5 Tunnel is a small pre-holiday win for Michiganders
One bit of good news to balance the glut of Grinch-like energy news coming out of Lansing
The people of Michigan have one energy win they can look to as they go into the weekend.
This week has been a difficult one for Michigan residents as Gov. Gretchen Whitmer signed her extreme net-zero energy bills into law, leaving Michiganders with the dual specter of spiking electricity prices and impending electric grid instability.
On the heels of the governor’s blackout bills becoming law, state regulators at the Michigan Public Service Commission appeared to get a jump on pushing prices higher as they approved a $368.1 million rate increase for DTE customers. The optics of a rate hike falling a few days after the passage of the law, and a few weeks before Christmas, can’t be ignored. The average household that is forced to rely on DTE for its electric service will soon see a $6.51 monthly increase in its utility bill.
On a more positive note, state residents were thrown one pre-Christmas bone to go with these two Grinchy letdowns. In a separate ruling, the MPSC gave a green light to a much-needed state permit, partially clearing the way for Enbridge Energy to begin building the Line 5 Tunnel. Enbridge will need additional approvals from the state-level Mackinac Straits Corridor Authority and the U.S. Army Corps of Engineers before it can start work on the tunnel, which will improve the safety of a valuable pipeline.
“The Commission’s order determined there is a public need for the replacement section of Line 5 and the products it carries,” noted MPSC spokesperson Matt Helms in an agency news release.
That order is a big win for people across Michigan as we are forced to look to Santa, prayer, or the Spirit of Christmas Present to bring us the weather we need if a wind/solar-reliant electric grid is to heat and warm our homes. A backup generator under the Christmas tree would be the right gift to protect Michigan families as the governor’s homespun version of the Green New Deal hollows out the state’s electric system. With the MPSC’s ruling on the Line 5 Tunnel, the affordable fuels that Michigan residents need to power a backup generator and keep their Christmas trees lit are a little bit closer to reality.
The language in the MPSC’s ruling also demonstrates the questionable thinking in a November 17 news release from Michigan Attorney General Dana Nessel. In that statement, Nessel lauded the release of an ostensibly “game-changing” report by the consulting firm PLG, which discussed the potential economic impacts of shutting down the Line 5 pipeline. “The key takeaway is that energy markets will adapt – as they have always done and continue to do – in the event that Line 5 is shut down,” claimed the attorney general’s office. “With advance notice, the markets can be expected to do so without supply shortages or price spikes.”
But today’s MPSC ruling — signed by the governor’s handpicked commissioners — directly contradicts the attorney general’s claim that “Michigan does not need Line 5.” While the Nessel press release attempts to shrug off the potential for economic harm that would be caused by closing the pipeline, the MPSC recognizes a “public need” for the tunnel “and the products it carries.”
The commission’s order even mirrors past Mackinac Center statements when it points out that “without the pipeline’s operation, suppliers would need to use higher-risk and costlier alternative fuel supply sources and transportation for Michigan customers, including those who use propane for home heating.”
The consultants at PLG recommend exactly those options. Their report promotes increased waterborne deliveries and crude-by-rail shipments as “existing infrastructure” that could potentially offset all but 13% of Line 5’s crude shipments. Previous Mackinac Center publications explained that “the Line 5 pipeline was built in 1953 to ‘drastically reduce the amount of oil and gas traveling on the Great Lakes’ in tankers...” In fact, “The state of Michigan asked Bechtel Corp. to build the pipeline since tankers have a higher rate of accidents than pipelines.”
Michiganders have seen substantial energy setbacks over the past week. Rising electricity rates and the threat of Gov. Whitmer’s green energy mandates have joined with rising inflation to cast a pall over holiday preparations. Rather than enjoying soothing, cozy nights by a fire with family, Michiganders face anxious days as increased utility bills and power outages loom ominously.
But we can take heart in one piece of good pre-holiday news: that government regulators may soon allow the state to retain one piece of essential energy infrastructure that supplies affordable fuel for backup generators. At least we have that one bit of holiday cheer.
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.