Forecast for busy hurricane season could mean hits to US power, gas markets

An above-normal Atlantic hurricane season this year, as announced May 24 by the National Oceanic and Atmospheric Administration for the seventh year in a row, could have consequences for coastal power and natural gas markets.

Platts Analytics data shows power demand frequently falls during and immediately after a tropical cyclone hits the Gulf Coast, compared with the same period of the previous week, and that such storms' arrival in 2021 to the Electric Reliability Council of Texas and Midcontinent Independent System Operator footprints coincided in average daily power burn sinking more than 25%.

Relevant day-ahead on-peak locational marginal power prices during the period between landfall and storm dissipation averaged lower during those 2021 storms. In comparison with the same days of the previous week, MISO Louisiana Hub's average was down by almost 56% during Claudette and by 3.7% during Ida, and the ERCOT North Hub's average was down 7.1% during Hurricane Nicholas.

After 'two extremely active' seasons

NOAA's Climate Prediction Center forecasts a 65% chance of an above-normal season, which extends from June 1 through Nov. 30, with 14-21 named storms, a 25% chance of near-normal season and a 10% chance of a below-normal season. The Atlantic hurricane season in 2021 had 21 named storms.

Of the 14-21 named storms in its 2022 forecast, NOAA forecasts six to 10 becoming hurricanes with winds of 74 mph or higher and three to six becoming major hurricanes, categories 3 through 5, with winds of 111 mph or higher.

"We just experienced two extremely active hurricane seasons, marking the first time on record that two consecutive hurricane seasons exhausted the list of 21 storm names," NOAA Administrator Rick Spinrad said during a May 24 season forecast media conference. "If you go back two years, it's the most active hurricane season on record, with 30 named storms. The 2021 hurricane, which the third most active season, in terms of named storms ... with impacts ranging all the way from the Appalachian Mountains all the way to New England, resulting in over $78.5 billion in US damage."

Deanne Criswell, Federal Emergency Management Agency administrator, said, "Hurricane Ida [in 2021] spanned nine states, demonstrating that anyone can be in the direct path of a hurricane and in danger from the remnants of a storm system."

Factors in forecast

Factors influencing the above-normal hurricane season forecast include:

• La Nina sub-normal central Pacific sea surface temperatures persisting through the season
• Above-normal sea surface temperatures in the Atlantic Ocean and Caribbean Sea
• Weaker tropical Atlantic trade winds
• Enhanced West African monsoon weather

The above factors are influenced by climate change factors, Spinrad said, but emphasized that no one storm could be tied to trends in climate change.

"As we reflect on another potentially busy hurricane season, past storms — such as Superstorm Sandy, which devastated the New York metro area ten years ago — remind us that the impact of one storm can be felt for years," Spinrad said. "Since Sandy, NOAA's forecasting accuracy has continued to improve, allowing us to better predict the impacts of major hurricanes to lives and livelihoods."

For example, NOAA plans to operate five uncrewed surface vehicles during the peak season and coordinate with small aircraft drone systems. NOAA is also experimentally extending its Excessive Rainfall Outlook time line from three to five days ahead of time.

As a result of such efforts, the "cone of uncertainty" used in hurricane forecasts to indicate likely storm paths over the five-day time horizon "has gotten significantly smaller since 2005," Spinrad said.