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Highlights

North Carolina rainfall totals exceed 16 inches by Friday afternoon

Transco Zone 5 South, which covers Carolinas, trades at $2.83/MMBtu

Houston β€” As Hurricane Florence battered the Carolinas and Virginia Friday, the number of customers without power topped 750,000, which sapped power demand in much of the region, cutting power burn and natural gas prices.

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However, forecasts for above-normal temperatures strengthened balance-of-week power prices in next week's forecast storm path in the Northeast.

The National Hurricane Center at 2 pm EDT reported Florence as a Category 1 storm, midway between Myrtle Beach, South Carolina, and Wilmington, North Carolina, with maximum sustained winds of 75 mph moving west at around 5 mph. Rainfall totals exceeding 16 inches had so far been reported across southeastern North Carolina.

As of about 4 pm EDT, utilities reported the following outage numbers:

  • Duke Energy: 406,872
  • North Carolina Electric Cooperatives: 246,986
  • Santee Cooper: 38,625
  • Electric Cooperatives of South Carolina: 29,867
  • Horry (South Carolina) Electric Cooperative: 25,348
  • South Carolina Electric & Gas: 1,700
  • Dominion Energy: 1,395.

The peakload forecast for Friday for all of North Carolina was for 28.9 GW, down from about 39.2 GW last Friday, the US Energy Information Administration reported. The peakload for the Duke Energy Progress region of eastern North Carolina, which bore the initial brunt of the storm, was forecast to peak at about 7.5 GW Friday, down from an actual maximum of about 11.1 GW last Friday.

Hurricane Arthur, which hit the Carolinas in July 2014, is the most recent comparable storm, which cut power burn by about 1 Bcf/d before beginning to recover, according to S&P Global Platts Analytics.

Duke Energy has projected that between 1 and 3 million of its customers may lose power due to Florence, and it may take "not days, but weeks" to restore service to some of those locations.

Santee Cooper, which serves much of the South Carolina coastal area hit hardest by the storm, had to recall some its workers from efforts to restore service Friday morning because of high winds.

NATURAL GAS PRICE EFFECTS

The reduced power demand has had an effect on spot natural gas markets. Transco Zone 5 South, which covers the Carolinas, was down sharply Friday, trading at about $2.83/MMBtu after falling 10 cents.

Prices in production areas were also coming off. For example, Dominion South fell about 8 cents to $2.22/MMBtu.

The area initially affected by the storm is dominated by vertically integrated utilities, which tend to have an illiquid bilateral power market.

Farther south, the Into Georgia Transmission weekend on-peak package was offered in the high $40s/MWh, with its day-ahead off-peak package traded in the low $20s/MWh, $3 lower than Thursday.

However, Into Southern next-day on-peak was offered in the low $50s/MWh, more than $10 above Thursday's assessment, at least partly because of high temperatures in Georgia, which were forecast to be 5 degrees above normal Monday in Atlanta, for example.

Some have speculated that Duke Energy's decision to shut down its 1,928-MW Brunswick nuclear plant south of Wilmington, North Carolina, prompted higher offers on the bilateral power market. The Southern Company's area has been importing an average of about 500 MW of power from the Carolinas, up from about 400 MW during the previous two Septembers, according to the US Energy Information Administration.

As of Friday afternoon, no other utility had announced plans to shut down any generation assets because of Florence.

NEXT WEEK'S POWER PRICES

The National Hurricane Center's forecast path for the storm calls for it to reach New England as a tropical depression on Wednesday, which takes it through the PJM Interconnection and New York Independent System Operator before hitting ISO New England.

PJM West Hub and ISO New England Mass Hub on-peak balance-of-the-week packages traded on the Intercontinental Exchange at a slight premium to Monday's day-ahead on-peak price, based on expectations for higher demand because of above-normal temperatures.

Despite Florence's imminent arrival, PJM peakload was forecast to range from 109,200 MW to 119,775 MW during the week, as much as 20% above the seven-year September peakload average, as temperatures during the week are expected to range from the upper 70s to upper 80s, as much as 10 degrees above seasonal normal.

ISO New England peakload was forecast to range from 15,350 MW to 17,725 MW throughout the week, nearly 4% above the seven-year September peakload average with temperatures forecast as much as 9 degrees above normal.

In NYISO, no balance-of-week packages traded, and the peakload forecast is little changed as temperatures during the week are expected as high as the low 80s, as much as 8 degrees above seasonal normal.

-- John DeLapp, Kassia Micek, Mark Watson and Jeff Zhou, newsdesk@spglobal.com

-- Edited by Gail Roberts, newsdesk@spglobal.com