Hurricane Ian slams into Florida Gulf Coast, cutting power to more than 850,000

More than 850,000 Florida power customers were without service around 3:30 pm ET Sept. 28, shortly after landfall of Category 4 Hurricane Ian's 155-mph winds and towering storm surges, and the state's power and natural gas demand levels are likely to drop substantially Sept. 28-29.

The Florida Reliability Coordinating Council's peak power demand fell by more than 23% to about 33.5 GW on Sept. 27 ahead of the storm, as the state-mandated 13 of the state's 67 counties to evacuate, and another eight have been recommended for evacuation, especially for people who live in recreational vehicles mobile homes or low-lying areas.

The population of the mandated evacuation counties is 5.7 million, and the voluntary counties are 2.1 million. Florida's most recent census data shows the state has 21.5 million people.

The FRCC is the North American Electric Reliability Corporation's reliability entity for all of the states except the Panhandle, which is grouped with NERC's SERC Region, formerly known as the Southeast Electric Reliability Council.

According to the US Bureau of Safety and Environmental Enforcement, as much as 190,000 b/d of crude and 184 MMcf/d of gas in the offshore Gulf of Mexico was shut-in ahead of the landfall of Hurricane Ian. Just 2%, or 11, of the Gulf of Mexico platforms, were vacated Sept. 28. The closures have taken offline an estimated 158,000 b/d, or about 9%, of offshore oil production and 128 MMcf/d, or about 6%, of gas output. Available pipeline data showed a roughly equivalent drop in Mississippi offshore production receipts over the past two days, according to S&P Global Commodity Insights data.

In Florida, sample gas deliveries to electric power plants Sept. 26 were down about 660 MMcf/d compared with prior day flows and nearly 1.3 Bcf/d over the past two days.

Storm surge issues

Governor Ron DeSantis and President Joe Biden have declared emergencies for the state of Florida, which has about 11 million electric utility customers, in 2021 obtained 73% of its power from natural gas-fired generation.

In a media conference just before the storm made landfall, Eric Silagy, chairman and CEO of Florida Power & Light, the state's largest electric utility, said Ian has "not only very high winds but torrential rains that have spun off a number of tornadoes and, as we're seeing now video coming in, very high storm surge."

In an earlier Federal Emergency Management Agency media conference, National Weather Service Director Ken Graham said that what he called "a very historic storm" was forecast to cause a storm surge in some places and was slated in some places to range between 16 to 18 feet.

"There [are] similarities when you see about the same storm surge as Hurricane Laura, when we saw 18 feet of storm surge devastated houses off the foundation," Graham said. "This is going to be a storm we talk about for many years to come."

Restoration efforts

Silagy said his company has mobilized "an army" of 19,000 people to help restore service to customers as quickly as possible, but he called Ian "a very powerful, catastrophic storm that is going to do significant damage to homes, businesses, and infrastructure across Southwest Florida."

"There are sections of our service territory in Southwest Florida which we will not be able to repair, but we are going to have to rebuild," Silagy said. "With the storm surge and with these winds, there will be damage that is beyond repair."

John Bartlett, a utility analyst and president of Reaves Asset Management, a company that focuses on utilities, described Florida Power & Light as "the best utility to handle this in America."

"Florida Power and Light spent a ton of money on storm resilience, and even actually driving around the area you could see it," Bartlett said. "If this was a sort of more standard-size hurricane, I would have said that most customers would be back in three days, and that would be a dramatic improvement over where Florida Power and Light was 10 years ago, right? FPL has gotten really good at these, but here on this one, all bets are off, and it'll really be kind of more interesting from my perspective, to actually see how long it does take."

S&P Global Commodity Insights assesses day-ahead bilateral indexes for Florida based partly on trading on the Intercontinental Exchange, but no such trading occurred on the morning Sept. 28. The index Sept. 27 for delivery Sept. 28 was $61/MWh, up $2 from the previous day, and the index for delivery Sept. 29 was $60.25/MWh.

At the Florida Gas Zone 3 pipeline, spot gas was trading at $6.226/MMBtu Sept. 28, down almost 50 cents, or 7.4%, from the previous day's close of $6.725/MMBtu.