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Utilities eye wind, water as 2-4 major hurricanes predicted for 2019 season

This article is part two of a two-part feature looking at the potential for the 2019 Atlantic Basin hurricane season to disrupt the U.S. energy industry. Part one can be found here.

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U.S. electric and diversified utilities operating along the Atlantic Ocean and Gulf Coast are gearing up for this year's hurricane season beginning June 1 even as several continue recovery from previous years' storms.

In a May outlook, U.S. government officials forecast a near-normal Atlantic hurricane season, with nine to 15 named storms. The forecast already accounts for subtropical storm Andrea, which formed May 20 west of Bermuda but quickly weakened on May 21, U.S. National Oceanic Atmospheric Administration, or NOAA, officials said.

Of the named storms, NOAA predicts four to eight could have hurricane-force winds of at least 74 mph or higher, and two to four could be major hurricanes of Category 3 or higher, with winds traveling at least 111 mph.

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Over the last five years, the Atlantic has had between four and 10 hurricanes in a year, but not all hit the mainland U.S. In 2015, for instance, two major hurricanes, Danny and Joaquin, did not strike the mainland U.S. Meanwhile, NOAA's May outlook for 2017 predicted five to nine hurricanes, and that year had 10, of which six were major. Three of those major hurricanes caused significant damage to power grid infrastructure on the U.S. mainland and in Puerto Rico.

Major hurricanes have damaged utility infrastructure with high winds, storm surge and flooding. In 2016, Hurricane Matthew skimmed the southeastern U.S. Atlantic Coast. In 2017, Hurricanes Irma and Maria hit the Carolinas and Puerto Rico, respectively. Also in 2017, Hurricane Harvey became just the second Category 4 storm since 1961 to hit the Texas Gulf Coast. In 2018, Hurricanes Florence and Michael hit the Florida Gulf Coast and southeastern U.S.

Financial recovery can take months or even years. Duke Energy Corp. subsidiaries Duke Energy Progress LLC and Duke Energy Carolinas LLC, which together serve about 4.1 million customers in North and South Carolina, suffered at least 1.7 million outages during Florence in 2018. Later that year, Duke Energy Carolinas asked North Carolina regulators to defer $160 million in costs from Florence, Michael and a 2018 winter storm to a 2019 rate case.

This year, Florida utilities such as Florida Power & Light Co., which supplies power to 4.9 million customers, asked state regulators to authorize the use of corporate tax savings under the 2017 federal tax overhaul to pay off $1.3 billion in storm-related costs due to Irma, which hit the Florida Keys as a Category 4 hurricane on Sept. 10, 2017. In May, FPL affiliate Gulf Power Co., which serves 459,000 customers in the Florida Panhandle, also got Florida Public Service Commission approval to increase its storm recovery fund by $342 million to pay for costs from Hurricane Michael. Both companies are subsidiaries of NextEra Energy Inc.

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Gerry Bell, NOAA's lead hurricane season forecaster, highlighted the disparate impacts of hurricanes, with some causing more flooding than others.

Hurricane Harvey, for example, was known for historic amounts of rain. The Category 4 storm hit near Rockport, Texas and stalled four days, dropping about 60 inches of rain on the Houston metro area, a NOAA report summarized. CenterPoint Energy Inc., whose subsidiary CenterPoint Energy Houston Electric LLC serves about 2.5 million customers in the Houston area, had to restore service to about 1.3 million electric and natural gas customers. Entergy Corp. subsidiary Entergy Texas Inc., which serves about 447,000 customers in eastern Texas, reported about 41% of its customers suffering power outages during the storm.

Hurricane Maria destroyed Puerto Rico's power, water and telecommunications infrastructure after it hit the island on Sept. 20, 2017. The hurricane caused the longest blackout in U.S. history and left the island's 3.1 million people without power for months.

Though NOAA finds this season to be near normal, Bell warned that the Atlantic has been in a "high activity era" since 1995, and that he is "not seeing any indication that we are getting out of this cycle yet." The period from 1971 to 1994 is considered a time of low activity.

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