Tropical Storm Francine aims at Gulf Coast, likely disrupting energy markets

The US National Hurricane Center has forecast Tropical Storm Francine, strengthening Sept. 9 in the western Gulf of Mexico, to make landfall as a hurricane in the central Gulf Coast between East Texas and the Florida Panhandle Sept. 11-12, which could disrupt energy infrastructure and power prices across the region.

In a 1 pm CT public advisory, the National Hurricane Center said the storm was located about 180 miles south/southeast of the US/Mexico border with maximum sustained winds of 60 mph, moving north/northwest at 5 mph.

It issued a storm surge watch from High Island, Texas, to the Alabama-Mississippi state line and a hurricane watch from Cameron, Louisiana, to Grand Isle, Louisiana. A tropical storm watch was issued for wide expanses of coastline stretching from northern Mexico to most of Louisiana.

The storm was expected to bring widespread rainfall of 4-8 inches, with local amounts up to 12 inches, from South Texas to southern Mississippi.

A storm surge was forecast for 5-10 feet from Cameron to Port Fourchon, Louisiana, from 4-7 feet from Port Fourchon to the mouth of the Mississippi River, and from 3-5 feet from High Island, Texas, to Cameron, Louisiana.

“In the initial approach to landfall in the Gulf, I would expect Francine to have more of an impact on electric demand if she were to follow a more westward track, closer to the Texas coast,” said Ian Palao, vice president of strategic energy services at POWWR, an energy management service and software company based in Raleigh, North Carolina.

“There would be far more people in her path in that scenario than if she were to stay farther offshore on her way to somewhere between Lake Charles and Lafayette, Louisiana,” Palao said. “Once onshore, any projected path will serve to limit electricity usage via less air conditioning usage and electric transmission/distribution failures. The key is how many major metro areas will be involved. At this point, the largest look to be St. Louis, Memphis, Tennessee, and Jackson, Mississippi.”

Plunging peakloads

In nine previous hurricanes that hit the mainland US from 2021 through 2024, peakloads dropped by about 18.5% in the affected power regions, S&P Global Commodity Insights data shows.

For the two independent system operators affected by five storms affected by hurricanes, power burn slid an average of 17%, according to Commodity Insights data, which does not include the Florida Reliability Coordinating Council, which was hit by four of the nine storms.

On-peak power prices dropped across the nine storm areas by a wide range – as little as 3.7% for August 2021’s Hurricane Ida and as much as 1,377% for August 2023’s Hurricane Harold. These are in comparison with the same day of the previous week.

On Sept. 8, the Midcontinent Independent System Operator, which includes regions in Louisiana, Mississippi and East Texas, forecast the MISO South region to have a peakload of 21.3 GW on Sept. 12, likely the first full day after landfall. This would represent a decrease of 2.6 GW, or 10.9%, from Sept. 5, the same day of the previous week.

The Intercontinental Exchange had no trading activity for MISO hubs in the storms path on Sept. 8. Electric Reliability Council of Texas Houston Hub was trading around $11.25/MWh for delivery Sept. 10, down from $18.05/MWh for Sept. 9 delivery and $26.82/MWh for Sept. 5 delivery.

S&P Global Platts assessed Henry Hub spot gas at $2.03/MMBtu, down from Sept. 9’s $2.095 and Sept. 5’s $2.055/MMBtu.

Utility preparations

MISO on Sept. 9 issued a severe weather alert and initiated conservative operations procedures for its Louisiana and Mississippi members effective 7 pm CT Sept. 10 through 7 pm CT Sept. 13. Such an alert mandates members to determine whether maintenance or testing can be deferred and to "prepare operating personnel and facilities for extreme weather." It also requires that critical computer systems work be suspended if they are affected by the conservative operations declaration.

Entergy serves most of the region through utilities in the storm’s path, and spokesman Neal Kirby said Sept. 9 the company expects “to mobilize an additional field workforce of approximately 5,000 restoration workers beyond our employees and on-property contract resources across southeast Texas, Louisiana, southern Mississippi and southeastern Arkansas.”

“We plan to have these resources safely on property on Wednesday prior to landfall and ready to begin restoration as soon as weather conditions permit,” Kirby said.

Entergy Nuclear said Sept. 9 it has “entered severe weather procedures” for its Waterford 3 and River Bend nuclear power stations in Louisiana and Grand Gulf nuclear power station in Mississippi. “Those procedures include walk-downs, securing of equipment and contingency staffing plans,” Entergy said.

In anticipation of Francine’s arrival, the Federal Emergency Management Agency issued a news release advising Louisiana and Texas Gulf Coast residents about how to prepare or evacuate if the storm makes landfall in their areas.

US Senator Bill Cassidy has asked President Joe Biden to grant a federal emergency declaration for Louisiana ahead of the storm.