Officials say hundreds of gallons of potentially toxic coolant fluid have leaked from two electric power cables in the waterway that links Lake Huron and Lake Michigan.
American Transmission Company says the fluid is a mineral-based synthetic oil used for insulation that can be harmful if released into the environment.
District Supervisor Joe Haas of the Michigan Department of Environmental Quality says the agency is investigating but it's too early to know the extent of the damage in the Straits of Mackinac.
The company says the cables have been taken out of service.
They carried electricity between Michigan's Upper Peninsula and Lower Peninsula.
Spokeswoman Jackie Olson says it hasn't been determined what caused the leak of about 400 gallons, which was discovered after two circuits went offline Sunday night.