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Hurricane Ian approaching Florida's Gulf Coast, likely to disrupt power utilities

Highlights

Florida power, gas prices drop ahead of storm

Governments, utilities deploying to help

  • Author
  • Mark Watson
  • Editor
  • Rocco Canonica
  • Commodity
  • Coal Electric Power Natural Gas

Hurricane Ian threatens to make landfall on the Florida Gulf Coast at about 8 pm Sept. 28 as a major hurricane, likely throwing millions of power customers offline and sharply cutting power and natural gas demand in the area.

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Around 3 pm ET on Sept. 27, the National Hurricane Center classified Ian as a major category 3 storm with maximum sustained winds of 120 mph, just north of the western third of Cuba and southwest of Key West Florida, moving north around 10 mph.

The entire state of Florida was declared in a state of emergency, after actions by Governor Ron DeSantis and President Joe Biden.

In a Sept. 27 press briefing at the White House, Federal Emergency Management Agency Administrator Deanne Criswell said that as Ian approaches Florida's shores, its horizontal speed will slow to about 5 mph, which she said is "significant, because what this means is that Floridians are going to experience the impacts from this storm for a very long time."

Florida's 55 electric utilities serve more than 11 million customers, and peakloads for the North American Electric Reliability Council's Florida Reliability Coordinating Council footprint averaged 44.8 GW Sept. 20-24, the latest dates for which the US Energy Information Administration had data. The FRCC covers all except the Florida Panhandle, which the EIA lumps in with NERC's SERC Region, formerly known as the Southeast Electric Reliability Council, which also includes Alabama, Georgia and much of Mississippi.

In 2021, 73% of Florida's power generation came from natural gas. Nuclear was second with a 12% market share, followed by coal with a 9% market share, according to data from S&P Global Commodity Insights.

Power traders may anticipate demand destruction, as the S&P Global Day-Ahead Bilateral Index for Florida power dropped below $60/MWh for delivery Sept. 27, it's lowest level since April 1, and less than September 2021's average of $59.86/MWh.

Similarly, Florida Gas Zone 3 spot gas was priced at $6.66/MMBtu for delivery Sept. 27, its lowest level since April 14, but still higher than September 2021's average of $5.98/MMBtu.

Preparation for restoration

Various entities are moving into the area to help, including NextEra Energy's Florida Power & Light, which serves about 5.1 million customers across the state and has mobilized more than 13,000 people "to be able to respond safely and as quickly as possible.

"FPL is continuing to prepare for widespread outages stretching over multiple days due to the slow-moving storm," the company said.

Another big player in restoration will be Duke Energy, which serves almost 1.9 million customers through its Duke Energy Florida utility.

Duke has positioned almost 10,000 people "at the ready to restore power after the storm," the company said. These include line workers, tree professionals, damage assessment and support personnel. Duke has brought people from its other utilities in Indiana, Kentucky and Ohio.

Tampa Electric, which serves more than 786,000 customers, lies near the centerline of the National Hurricane Center's forecast for Ian's landfall, and has brought in "about 3,000 people from a dozen states to help restore power after the storm passes. As of the afternoon of Sept. 27, Tampa Electric was "evaluating whether to interrupt service ... to two small portions of downtown Tampa under mandatory evacuation."

In another effort to help prepare for the storm and its aftermath, Texas Governor Greg Abbott directed a FEMA National Urban Search and Rescue System team associated with Texas A&M University Engineering Extension Service to deploy to Florida to help with disaster response. The team includes 45 people, four boats and two dogs.