Milton cuts power, gas demand and prices, severs energy delivery links

More than 76,000 customers in Florida were without power at 5 pm ET Oct. 9, according to PowerOutage.US, as the outer bands of Hurricane Milton lashed the southern peninsula with high winds, heavy rains and storm surges, weakening energy demand and prices.

One factor that may be weakening demand is the shutdown of various terminals and pipelines supplying refined products to retailers. Kinder Morgan announced Oct. 8 it had shut its Tampa Bay, Florida, refined products terminals and its Central Florida Pipeline system in anticipation of the storm.

On Oct. 9, Georgia-based distributor Mansfield Energy suspended all fuel deliveries in Tampa, Orlando and other central Florida markets in in anticipation of Milton’s high winds.

S&P Global Commodity Insights estimated Southeast power burn around 4.9 Bcf on Oct. 9, down about 3 Bcf, or 37.8%, from Oct. 2’s 7.9 Bcf.

Energy prices weaken

Platts assessed the Florida power day-ahead on-peak bilateral index at $39.25/MWh for Oct. 9 delivery, down $6, or 13.3% from Oct. 2’s $45.25/MWh. On Oct. 9, Platts assessed the Florida index at $33.25/MWh for Oct. 10 delivery, down $13.50, or 28.9%, from Oct. 3’s $46.75/MWh. Platts is a division of Commodity Insights.

Platts assessed Florida Gas Zone 3 at $2.44/MMBtu for Oct. 9 delivery, down 87 cents, or 26.2%, from Oct. 2’s $3.305/MMBtu. On Oct. 9, Platts assed Florida Gas Zone 3 at $2.323/MMBtu, down 89 cents, or 27.7%, from Oct. 3’s $3.215/MMBtu.

Elsewhere along US Gulf Coast, spot gas markets were little changed Oct. 9 as prices continued to hover well below early October highs. At the US benchmark Henry Hub, cash prices settled around $2.42/MMBtu, up about 2 cents on the day, but down about 20 cents from the prior weekend settlement.

At Transco Zone 3 and Transco Zone 4, prices wobbled settling at $2.30 and $2.34, respectively – down from around $2.50 over the most recent weekend, preliminary settlement data from Commodity Insights showed.

Generation impacts

Natural gas-fired generation supplies the vast majority of the state’s power – an average of 73.6% for the first nine months of 2024 – and the state’s central region has 26 of them totaling more than 22 GW of capacity within Milton’s 120-hour forecast error cone, meaning any of them could be affected by hurricane-force winds.

The region also has the 2.2-GW St. Lucie nuclear plant near the forecast error cone’s southern boundary on the Atlantic Coast, but this plant has been shut down for refueling.

Local utilities dozens of solar sites across central Florida in Milton’s path, and solar power, both utility-scale and rooftop, has become a significant contributor to the state’s power supply – an average of 8.9% over the first nine months of 2024.

“The easiest hurricane impact to predict is a decrease in solar production due to heavy cloud cover from the storm,” said Thomas Hancock, a Commodity Insights senior research analyst, on Oct. 9. “A similar phenomenon can easily be seen in the generation data from other southeastern regions when Hurricane Helene passed through. Solar production should recover once the cloud cover associated with the hurricane passes, as was seen in the southeastern regions after Helene. The caveat, of course, is if there is any damage to the solar panels themselves.”

Many panels are rated for winds of more than 150 mph, Hancock said, but major damage has occurred in the past due to improper installation, flying debris and flooding.

Utility preparations

Duke Energy Florida spokeswoman Ana Gibbs said the company has completed its storm preparation ahead of Milton, currently a Category 3 hurricane with sustained winds of 120 mph.

“Our Duette, Fort Green, and Charlie Creek solar sites were decoupled from the grid on Tuesday due to anticipated storm damage due to high winds,” Gibbs said Oct. 9. “Evaluations of the sites will occur as soon as the storm has passed and it is safe to do so.”

Duke Energy serves much of central and western Florida’s Gulf Coast, while Florida Power & Light serves the southern Gulf Coast and much of the Atlantic Coast.

In an afternoon briefing Oct. 9, Florida Power & Light President and CEO Armando Pimentel Jr. said the NextEra utility has completed its Hurricane Helene restoration and is already working to restore power to customers as Hurricane Milton begins to make its way across the state.

“This is the second major hurricane to hit us in just a couple of weeks and it is certainly testing our system,” Pimentel said. “We are ready. We feel very, very good with our restoration plan.”

Floridians should be prepared to lose power, and some will experience extended outages, Pimentel said.

“We have a very resilient system and resilient infrastructure, but this is a big storm coming at us from Mother Nature,” he said.