Gulf Coast utilities prepare for Hurricane Sally as they repair Laura's damage

Houston — More than 75,000 power customers in Southwest Louisiana remained without power Sept. 14 as a result of Hurricane Laura, but more power cuts are likely in eastern Louisiana, southern Mississippi and Alabama as Hurricane Sally with forecast to hit the area Sept. 15.

The impending storm is likely to weaken power demand and prices, with the Into GTC bilateral day-ahead on-peak price trading at less than $21/MWh Sept. 14 for delivery Sept. 15, down from about $30/MWh on Sept. 12 for delivery Sept. 14.

The US Energy Information Administration forecast power demand in the North American Electric Reliability Corp.'s SERC region for Monday to be about 6.6% less than that of Aug. 31, the most recent non-holiday Monday.

The National Hurricane Center around 4 pm CT on Sept. 14 said Sally's maximum sustained winds had strengthened to 100 mph, making it a Category 2 storm, and forecast that it would move near the southeastern Louisiana coast the night of Sept. 14 and make landfall in the hurricane warning area, which stretches from Morgan City, Louisiana, to Navarre, Florida.

Around noon CT Sept. 14, the Midcontinent Independent System Operator, which manages the grid for Louisiana, western Mississippi and southeast Texas, issued a declared conservative operations effective through 9 pm CT Sept. 18 "due to the approaching Hurricane Sally, with high storm surge and rainfall forecast."

Such a declaration suspends all transmission and generation maintenance, "unless such maintenance will result in improved Bulk Electric System monitoring, control and security."

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Market effects short-lived

However, Travis Whalen, a power market analyst at S&P Global Platts Analytics, indicated the market effects of such a storm are likely to be short-lived.

"Ultimately, most hurricanes don't result in notable declines in demand for more than a few days," Whalen said. "Even in the case of Hurricane Laura, which caused substantial damage around MISO South, the dip in demand could barely be differentiated from the decline as summer winds down by the start of September. The scale of the drop itself is heavily dependent on the degree of damage and the type of load in the area. While Sally is currently forecast to hit more densely-populated portions of Louisiana, the more limited scale of evacuations will likely blunt the impact on loads."

Alabama Governor Kay Ivey on Sept. 14 issued a state of emergency, closed beaches and urged evacuation ahead of Hurricane Sally.

Preparations underway

Entergy utilities in Louisiana and Mississippi are preparing for the storm, even as Entergy continues to try to restore service to its southwestern Louisiana customers.

"Restoration workers in Louisiana and Mississippi continue monitoring and planning for the potential impacts of Tropical Storm Sally late today and tomorrow," Entergy said in a Sept. 14 statement, adding that its current track is likely to bring "heavy rain and strongest winds ... for coastal Mississippi."

As of about 4 pm CT Sept. 14, New Orleans-based Entergy had 55,628 customers without power in southwestern Louisiana, due to Hurricane Laura, considered the strongest hurricane to hit the state since 1856.

Beauregard Electric Cooperative, based in DeRidder, Louisiana, still had about 23,916 of its customers without service at that time.

Cleco's central Louisiana customers were also hard hit by Laura, but only had about 520 customers without power as of 4 pm CT. Pineville-based Cleco also has customers in St. Tammany Parish, northeast of New Orleans, however.

"Preparation efforts are underway for Tropical Storm Sally," said James Lass, Cleco distribution operations and emergency management director. "With the track of the storm expected to impact our southeast customers, we are moving internal resources and equipment from areas outside of the storm's path to the St. Tammany Parish area. Additionally, our logistics team has begun response preparations such as securing lodging for crews."