We Energies' new natural gas tanks will improve reliability, save money - Milwaukee Journal Sentinel

We Energies' new natural gas tanks will improve reliability, save money

A year ago a pipeline failure caused a natural gas crisis in Wis. These huge storage tanks can prevent that from happening again
Karl Ebert

A pair of massive natural gas storage tanks in Walworth and Jefferson county, each holding 12 million gallons of liquified natural gas, are expected to ensure an adequate supply of gas during winter heating seasons and buffer customers from spiking gas prices during times of high demand or short supply.

The tanks, at a combined cost of nearly $400 million, will allow We Energies to buy and store large amounts of natural gas when prices are low and release the gas as needed, alleviating some of the need to buy gas on the spot market on the coldest and most expensive days of the year.

The need for the gas storage facilities was underscored last year when We Energies on Dec. 23 made an unprecedented request of its customers to turn down their thermostats on a bitterly cold day after the largest pipeline that serves the utility was crippled by a partial failure of a pipeline in Illinois. The request was put out only after the utility had asked its large industrial and commercial customers to cut their gas use, had tapped a storage tank at the Oak Creek Power Plant.

That request would not have been necessary had the tanks in Bluff Creek and Ixonia been operational last winter, said Andy Hesselbach, We Energies' senior vice president for gas operations during a recent tour of nearly completed gas storage facility in Ixonia.

"If these facilities had been in place, we would not have had to curtail those customers, we'd have not had to do public appeals," he said. "Those are some of the types of events that we look to have these facilities in place for – they really do provide a fantastic resource for those bitter cold days."

More: On a bitter cold night, We Energies begged customers to turn down their thermostats. How close did the natural gas supply system come to failure?

Tanks part of a long-term energy reliability program

It's not that the tanks were built in response to that episode; We Energies submitted an application to build the facilities to the state Public Service Commission in 2019.

In its application, the company proposed building the tanks in Ixonia and Bluff Creek as a less costly way to meet southeastern Wisconsin's natural gas needs than building additional pipeline capacity.

Hesselbach said the tanks will save customers of We Energies' gas distribution companies, Wisconsin Gas LLC and Wisconsin Electric Gas Operations, more than $200 million over the next 20 years due to the savings from not building pipelines and the storage operation's ability to even out some of the wild fluctuations that can happen in the natural gas market.

We Energies built the storage facilities as it prepares for growing demand for natural gas even as it works on a plan to eliminate 80% of its carbon emissions by 2050. About four in five Wisconsin homes are heated with natural gas, and natural gas also is seen as a bridge to a zero-carbon future.

Natural gas-powered generating plants will, for the forseeable future, be called on to fill electric generation gaps during calm or cloudy days when renewable energy sources are offline or aren't operating at capacity, or on heavy use days when demand for electricity outstrips the renewable energy supply.

"You take the renewables when you can take them and then the gas generation fills in those pieces where you don't. So they're great companions," Hesselbach said.

The tank in Ixonia will be a reserve for Wisconsin Gas LLC , which serves the city of Milwaukee and communities to the north and west. The Bluff Creek tank will supply Wisconsin Electric Gas Operations, which covers the rest of southeastern Wisconsin. The tanks each hold enough gas to meet 13% of the service area's needs for 10 days, Hesselbach said.

Ixonia, Bluff Creek are prime locations for natural gas storage facilities

Farm fields in Jefferson and Walworth counties were chosen as locations for the tanks for a simple reason: They're close to where a large natural gas pipeline that comes into Wisconsin from Illinois connects with the We Energies gas distribution system.

The connection to the pipeline provides a supply of gas that can fill a tank in about three months.

But before the gas goes into the tanks it must be turned into a liquid, which means using liquid nitrogen to cool it to 260 degrees below zero. Liquification reduces the volume of the gas 600%.

Hesselbach compared the tanks, which have a layer of insulation sandwiched between two layers of steel, to "a Yeti (cooler) on steroids." The insulation maintains the temperature, keeping the gas mostly in liquid form, although some gas does evaporate. That "burn off" is captured and sent into the gas distribution system.

When the reserve is tapped, the process is reversed and the liquid is warmed until it again becomes gas.

We Energies began filling the Bluff Creek tank earlier this month. The company will begin filling the tank at Ixonia later this month. Construction of both projects began in 2022, although work at the Ixonia site started a little later due to a slower town and county approvals and an unsuccessful lawsuit by several residents who sought to stop the project after it had received PSC and local government approval.

The tanks are coming online as We Energies prepares to take a nearly 60 year old liquified natural gas storage tank at its Oak Creek Power Plant offline. Although that tank holds only one-fourth as much liquified natural gas, older technology meant it took more than a year to fill. As a result, it was only tapped in true emergencies such as last year's pipeline failure.

"(The new storage facilities) give you the ability to generate (natural gas) and dispatch it more freely when you need it and not hold back for the worst of the worst," he said. "It really is a safety net so we don't have to do a public appeal, like we had to last December. And it really puts us in a good position to serve our customers on all days for all weather conditions."