When it comes to energy sources, can you guess the most abundant fuel with the lowest cost?
If you said natural gas, you would be correct. For decades, Consumers Energy’s natural gas system has played a key role in providing safe, reliable and affordable energy to over 4 million people in 45 Michigan counties. But as we move into a decarbonized future in support of our state’s goal of net zero emissions by 2050, the energy landscape is beginning to evolve.
It is important that we bring all of our customers with us on the journey to net zero while maintaining the same hometown service our customers experience every winter. Here’s how we’ll make it happen.
Like we said, when it comes to providing energy, our priorities are reliability, safety and affordability for our customers. Without laying that foundation, we can’t say we’re set up for a successful future in clean energy.
To paint a picture, here’s how we’re guaranteeing these priorities now with our current natural gas systems.
No matter the case, our natural gas system needs to be as reliable as humanly possible. Nothing negates the fact that it’s our job to keep people warm throughout cold Michigan winters.
By our calculations, our gas system is operating around 99.9% reliability due to two key factors:
Michigan’s unique geology makes it possible for us to purchase natural gas in bulk when prices are lower and store it underground. Our rocks are extremely porous, offering lots of nooks and crannies perfect for gas storage.
We’re able to physically push the gas into the ground where it remains until we need to extract it back out, filter it, dehydrate it and push it out to customers.
Few other states have this geology. Most are contending with hard rocks or clay under their surfaces, but we’re very lucky that Michigan is more of a mitten-shaped sponge capable of keeping gas available year-round.
Strategically located storage fields
Did you know porous rocks make an excellent storage locker for natural gas? The thing is, not all rocks are adequately sponge-like. That’s why our natural gas storage and compressor stations are strategically located on pre-identified, extra porous sweet spots. We safely operate about 30,000 miles of natural gas pipeline, as well as one of the nation’s largest underground storage systems, comprising 15 fields and nearly 900 wells totaling over 150 billion cubic feet (“Bcf”) of working gas storage capacity.
To put this in perspective, the average residence uses about 7.54 thousand cubic feet (Mcf) per month, meaning our stored natural gas is capable of heating almost 1.7 million homes for an entire year.
In wintertime, which is peak season for gas use in heating, 85% of the gas provided to customers is the pre-bought gas that comes from these storage facilities.
Because we’re able to store gas in Michigan’s naturally porous rocks, that means we can buy gas in the summer in bulk when demand is low and gas is cheaper. Then we pass that savings along to our customers when demand is high. We project this approach will save our full-service customers about $223 million this heating season.
The natural gas market is naturally fairly volatile, but we keep our gas affordable.
From a billing standpoint, our customers’ natural gas bills are lower now than they were back in 2008. Customers currently pay on average $65 per month, and due to the low cost of natural gas, Consumers Energy can continue to invest in our storage assets along with other gas system assets and innovations, while keeping customer bills affordable.
The freedom to innovate has given rise to new initiatives that will help us bring every Michigander along in our journey to clean energy. As part of our goal to ensure any gas technology we invest in moving forward is based on our values of safety, reliability and affordability, we’ve created a brand new, ten-year natural gas delivery plan back in 2019 that is updated every year.
This natural gas delivery plan serves as a road map to increase safety and reliability, and reduce our emissions. We’re pleased to introduce it to you today.
The goal of our new natural gas plan is to deliver safe, reliable, affordable natural gas to our customers while transforming the system to deliver cleaner fuels for a decarbonized future. The plan is set to take place over the next ten years with an $11 billion investment in our customers.
It’s important to note up front that energy prices will inevitably rise throughout America as the U.S. makes the switch to renewable energy. But in spite of the hefty investment our natural gas delivery plan will require and the increases needed to make it happen, customers should still pay less than they previously did and less than their neighbors who receive gas from suppliers other than Consumers Energy. Our plan is set to result in safer, more reliable energy at affordable prices.
Moving into the nitty gritty details, here’s how the natural gas delivery plan will help us lead Michigan’s clean energy transition:
These critical upgrades and investments in the future will help protect the environment we all cherish by reducing emissions of methane, a greenhouse gas more potent than carbon dioxide. Already, we’ve cut methane emissions by 16 percent and have a plan to reduce even further by 2030.
By reaching our net zero goal, we’ll reduce our methane emissions by more than 10,000 metric tons — that’s the equivalent of removing about 55,000 vehicles from the road for a year or preserving more than 300,000 acres of forest. Our improved natural gas delivery plan is how we’ll get there.
For decades, Consumers Energy has brought value to customers every winter with reliable and affordable natural gas delivery. This remains our top priority, even as we set up and test energy storage advances for a decarbonized future.
We’re proud to be able to harness Michigan’s naturally porous and unique geology to provide plenty of natural gas to keep homes warm in cold winters at a competitive price. Come with us on the journey to net zero by 2050 and see how we’re continuing to provide high value while doing our part to meet emissions goals for a cleaner future.