Northern USGC to face strengthening Hurricane Isaias Oct. 9-10: NHC

The US National Hurricane Center on Oct. 8 forecast Hurricane Isaias, currently packing 85-mile-per-hour winds, to strengthen before making landfall along the northern Gulf Coast late Oct. 9 or early Oct. 10, which would likely disrupt the region's energy infrastructure, fundamentals and prices.

In a webcast around 11 am ET Oct. 8, NHC Director Michael Brennan said the storm would bring "multiple dangerous hazards," so the center has issued hurricane warnings for parts of the Alabama, Florida and Mississippi coastlines.

"We have tropical storm watches and warnings farther east and then extending inland up into portions of southern and even central Alabama and southwestern Georgia, where we expect that inland wind threat to exist, especially in wind gusts as the center of Isaias moves quickly into the Southeastern United States as we go through the day through our early morning hours Saturday and then into Saturday night."

This hurricane would be the first to make landfall in the mainland US this season, which started June 1 and continues through Nov. 30.

For 11 cyclones making landfall along the Gulf and Atlantic coasts from 2022 through 2025, power demand dropped about 20% from the same day of the week prior, usually due to power outages, an S&P Global Energy analysis shows. Day-ahead on-peak power prices dropped an average of almost 30% from the week prior. Natural gas spot prices fell an average of 12.5% from the prior week.

The US Energy Information Administration on Oct. 8 had no load forecasts available for the North American Electric Reliability Corp.'s SERC Region, which encompasses the Gulf Coast area under threat from Isaias. The region's load peaked at 32.1 gigawatts on Oct. 7 and at 33.3 GW on Oct. 3, which would be the weekday comparable to the likely landfall date of Oct. 3.

SERC was formerly known as the Southeast Electric Reliability Council.

The area of Mississippi and eastern Louisiana served by the Midcontinent Independent System Operator is within MISO's South Region. The grid operator forecast this region's load to peak at almost 22.8 GW on Oct. 10, virtually flat with Oct. 3.

MISO on Oct. 8 issued a severe weather alert for the areas of its South Region served by Entergy, Cleco, the Southern Mississippi Electric Power cooperative and the Louisiana Generation and Transmission electric cooperative. The alert was related to Isaias and would start at 12 am Oct. 9 and continue until 11:50 pm Oct. 10.

No market impacts yet

On the Intercontinental Exchange, traders offered no bids or offers the morning of Oct. 8 for power to be delivered Oct. 9 or 10 in the MISO South region or southeast pricing locations.

Platts assessments for natural gas to be delivered in the region were mixed for delivery Oct. 9, compared with the day prior, but up from Oct. 2 indexes. Florida Gas Zone 3 spot gas was at $4.55/million British thermal units for Oct. 9, down from Oct. 8's $4.89/MMBtu but up from Oct. 2's $4.105/MMBtu. Platts is part of S&P Global Energy.

Henry Hub spot gas was at $3.235/MMBtu for Oct. 9 delivery, up from Oct. 8's $3.155/MMBtu and Oct. 2's $3/MMBtu.

Transco Zone 5 South, important for Into Southern power pricing, eased to $4.122/MMBtu for Oct. 9 delivery from Oct. 8's $4.32/MMBtu but up from Oct. 2's $4.04/MMBtu.

Based on Oct. 8 marginal heat rates and the Henry Hub Oct. 9 spot index, MISO Louisiana Hub would price about $59.60/megawatt-hour for Oct. 9 delivery, up from Oct. 8's on-peak locational marginal price of $55.11/MWh and Oct. 2's LMP of $45.34/MWh.

The same calculation for Transco Zone 5 South and Into Southern's marginal heat rate would price about $53.50/MWh for Oct. 9 delivery, down from Oct. 8's $55.50/MWh and Oct. 2's $76.50/MWh.

On Oct. 7, the Platts M2MS Power Forward curves had MISO Louisiana Hub on-peak power at $60.93/MWh for Oct. 10-31 and Into Southern power at $73.90 for the same period.