MPSC Concludes Investigation Into Consumers Energy Fire

Lansing, MI - On Thursday, May 7, 2020, the Michigan Public Service Commission concluded its investigation into the Jan. 31, 2019, fire at Consumers Energy Co.’s Ray Natural Gas Compressor Station in Macomb County that led to a statewide natural gas emergency amid a polar vortex cold snap.

The Commission’s order (Case No. U-20463) accepts the findings of the MPSC’s Gas Safety Staff investigation, filed in January 2020, that the root cause of the Ray fire was grounding interference on the electrical system of the facility, which led to automated “blowdown” procedures in which natural gas is released to the atmosphere to protect worker and public safety. Combined with record-low temperatures and high winds blanketing the state, the natural gas did not disperse as it typically would and came into contact with nearby plant equipment that operates at a high temperature, thereby igniting the airborne gas and causing the fire.

Based on its investigation, MPSC Staff identified a violation of federal safety standards during emergency shut down of a compressor station (49 CFR 192.167) because the discharged gas created a hazard. On April 29, 2020, MPSC Staff and Consumers Energy resolved an enforcement action associated with this alleged violation, with the company agreeing to pay a $10,000 fine.  This penalty represents the maximum amount allowed by law and was also approved by the Commission today.

The design of the Ray facility was unique and has been modified as part of the repairs made at the plant to bring it back into service.  Although other compressor stations do not present the same risk of a fire due to design differences, the order requires Consumers Energy to submit its final systemwide evaluation of blowdown systems by June 1, 2020, to document mitigation of any existing risks on the system.

In addition, the order outlines numerous actions taken over the last year as part of the MPSC’s Statewide Energy Assessment to better understand and align emergency operations in the energy sector and ease the impact of these emergencies on Michiganders. Gov. Gretchen Whitmer asked the MPSC to conduct the assessment, determining whether the design of Michigan’s electric, natural gas and propane systems are adequate to handle operational problems, extreme weather events and other changing conditions, and to recommend ways to reduce risks.

The MPSC has approved DTE Electric Co.’s power supply cost recovery application (Case No. U-20221), allowing the company to implement a 2019 levelized maximum monthly PSCR billing factor of 1.81 mills per kilowatt-hour (kWh) based on a projected 2018 PSCR underrecovery of $68.7 million. The Commission also approved DTE Gas Co.’s gas cost recovery plan (Case No. U-20235) for the year ending March 31, 2020. DTE Gas will be allowed to implement a maximum base GCR factor of $2.80 per thousand cubic feet (Mcf) and a pipeline reservation charge of 38 cents per Mcf. The Commission cautioned DTE Electric that it may not recover certain costs associated with a recent contract amendment with Nexus — an affiliated interstate pipeline with which DTE Electric and DTE Gas both contract for long-term gas capacity.

The MPSC today approved a voluntary green pricing (VGP) customer program for Northern States Power Company of Wisconsin (Case No. U-20368), which serves part of the Upper Peninsula. The Commission also granted DTE Electric Co. an extension to file its biennial review of the company’s VGP programs (Case No. U-20713) based on the Commission’s order on DTE Electric’s integrated resource plan (Case No. U-20471). DTE Electric’s biennial review now must be filed by Aug. 31, 2020. VGP programs allow residential, commercial or industrial customers to voluntarily purchase from the utility up to 100% of their electricity from renewable energy sources such as wind and solar. More information about voluntary green pricing is here.

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

To watch recordings of the MPSC’s meetings, click here.

For information about the MPSC, visit www.Michigan.gov/MPSC, sign up for one of its listservs, or follow the Commission on Twitter.

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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