Michigan Commission Approves DTE Energy’s $48.9 Million Natural Gas Project to Boost Reliability

The Michigan Public Utility Commission on July 27 granted a proposal by DTE Michigan Lateral Co., a subsidiary of DTE Energy Co., to convert existing pipelines from gas gathering to transmission service, a $28 million project, as well as build two connector pipelines – $7million Rogers City and $13.9 million Norwalk Manistee connectors. The commission found that the project provides redundancy to areas that currently have a single supply source and will improve the resilience of DTE Gas’ transmission system.

The project entails converting the existing natural gas gathering pipelines from unregulated wet gas gathering lines to regulated dry gas transmission lines, increasing diversity of supply for northern Michigan gas consumers. The connector pipelines will interconnect from the existing system into DTE Gas transmission facilities. Redundancy and resource diversity are among the key recommendations in the agency’s 2019 Statewide Energy Assessment, a comprehensive review of the state’s energy systems, conducted after a state energy emergency caused by a polar vortex cold snap in January 2019. In the same year, a fire at a Macomb County compressor station also threatened to disrupt delivery and underscored the need for diverse delivery methods.

The approval is conditioned on the completion of an alternative natural gas gathering system proposed by Lambda Gathering LLC to replace the system that the DTE subsidiary will convert. This would provide transport for 10 natural gas producers in the area, pending the subsidiary receiving all necessary permits and easements.

The commission also authorized a 20-year contract between DTE Michigan Lateral and DTE Gas for firm transportation on the converted and new pipelines. Further, the agency set a 30-day deadline to file recalculated rates minus contingency costs, partly because the two were affiliates at the time the agreement was made. Costs will be recovered through the rates DTE Gas will pay for pipeline usage. In terms of recovery of these costs from customers, a determination will be made in DTE Gas’ future rate case.