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Texas Size Challenge

March 11, 2021

Careful planning, prudent investments prepare Michigan’s power grid for extreme cold 

By Tim Sparks, Vice President of Electric Grid Integration, Consumers Energy

Like me, I’m sure many of you followed the troubling and tragic headlines from Texas in February when an unprecedented snowstorm slammed the state, leaving millions of residents without electricity and heat amid freezing temperatures.

As the power grid nearly collapsed, Texans scrambled to survive the uncharacteristically severe cold without lights and heat for their homes and businesses. The suffering and chaos dragged on for days as utilities scrambled to restore power while dealing with frozen equipment and unreliable fuel sources.

Politicians, regulators and energy companies blamed one another for the crisis. Unfortunately, after all the damage — including several deaths — Texas was left with more questions than answers about what happened, why and who was responsible.

The massive failure has prompted many in Michigan to ask: could the same happen here?

A fair question. One we consider carefully and comprehensively every day at Consumers Energy.

Our most important job, in cooperation with state regulators, is to ensure Michigan has the power it needs in all circumstances, including extreme weather conditions.

Fortunately, we have several major advantages to help us avoid the kind of disaster and dire consequences Texans recently endured.

We’re Not Alone

Michigan may be a peninsula, but Texas, the only state in the continental U.S. to manage its own power grid, is an island when it comes to energy.

An abundance of fuel sources such a natural gas and oil and perhaps a culture of independence prompted the Lone Star State to isolate from energy interconnections with its neighbors. Texas is the only state in the continental U.S. to manage its own power grid.

By contrast, we in Michigan are part of the Midcontinent Independent System Operator (MISO), an independent, not-for-profit power coordinator that delivers safe, cost-effective electric power across 15 U.S. states and the Canadian province of Manitoba.

The benefits of MISO membership include ready access to affordable electricity from our neighbors when we need it, as well as mutual assistance agreements to help one another restore power during outages.

During the recent polar vortex, for example, we generated power to help southern states in the MISO footprint such as Louisiana, which fared better than Texas because of its regional network ties.

Sharing these resources has helped Michigan and other MISO members avoid and deal with major storms and other outage events through the years. Simply put, we are stronger and better equipped to confront challenges collectively.

We’re Built for Stability, Reliability

In 2016, the Michigan Legislature with bipartisan support passed landmark energy reforms to:

  • Protect customers from price volatility.
  • Encourage critical infrastructure investments.
  • Establish key planning processes to ensure we have the power we need.

Our hybrid regulatory model limits the amount of the state’s electric market served by alternative electric suppliers to 10 percent.

This ensures everyone pays their fair share to support a reliable power grid and creates the certainty to prioritize major, job-creating investments in the state’s energy system. We invest over $1 billion each year in our electric business, including about $700 million in tree trimming and equipment upgrades, and are implementing a 10-year, $11 billion plan to modernize our natural gas system.

Texas, on the other hand, has operated under nearly full electric deregulation since the late 1990s. That system, according to the Wall Street Journal, “rewarded companies that could sell electricity inexpensively and still recover their capital costs” and “provided little incentive for companies to spend cash on infrastructure that could protect power plants during sporadic severe cold snaps.”

Unfortunately, the lack of investment over the decades meant the Texas power grid was vulnerable at the worst possible moment.

Deregulation also left customers in Texas exposed to the volatility of the wholesale energy market, resulting in electricity bills of $5,000 or more due to price spikes during the storm. Our system protects nearly all customers from these wild swings. In fact, Consumers Energy’s average residential bill has been below the national average since 2012.

Michigan’s regulated model wisely requires us to have adequate power reserves four years out and includes an Integrated Resource Planning (IRP) process to ensure we can meet the state’s energy needs for decades to come.

We’ve worked through the IRP process to create our Clean Energy Plan, a 20-year blueprint that will end the use of coal as a fuel source and help us achieve net zero carbon emissions by 2040. You can learn more at MICleanEnergy.com.

We’re More Comfortable in the Cold

Though we’ve also experienced challenges, Michigan is better suited to confront the harsh realities of winter weather.

In Texas, many power plants are built outside with no structure around them. When temperatures reach freezing, there’s no heat to keep water flowing and sensors working. Natural gas wells may not have heaters to help prevent freezing.

We’re used to the cold – and we’ve built our power plants and resources to handle it. We’ve winterized our infrastructure, including the transmission and distribution networks that deliver our electricity and natural gas to customers.

That means we have heaters on our natural gas storage wells and cold-weather packages on wind turbines so they can run at temperatures as low as 20 degrees below zero. Our coal-fired power plants are built to run safely and efficiently in the dead of winter.

An abundance of natural gas in Texas may have created an unintended consequence for long-term energy supply planning. Utility companies, according to the New York Times, “often don’t bother to buy gas reserves.”

At Consumers Energy, vast underground fields allow us to stock proper reserves and stay ready to meet peak demand on the coldest days. We’re able to buy gas at lower prices during the summer and pass that value along to our customers when they it most. We’re also optimizing our storage fields as part of a plan to achieve net zero methane reductions by 2030. You can learn about those efforts at ConsumersEnergy.com/GasDeliveryPlan.

Our hearts go out to our utility partners in Texas and Oklahoma who dealt with historically cold temperatures and a large winter storm within their states last month. While Michigan also managed unseasonably cold temperatures, our electric, natural gas and renewable energy system worked around the clock to provide energy to 6.7 million Michigan residents and businesses.

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