Hurricane Ian cuts service to 2.4 million; power, gas flows drop, prices weaken

The number of Florida electricity customers without service due to Hurricane Ian was about 2.4 million as of 4 pm ET Sept. 29, as the cyclone weakened to a tropical storm and tormented Northeast Florida with its 70 mph winds and torrential rain, slashing power natural gas demand.

The Florida Reliability Coordinating Council's load peaked at less than 30.2 GW on Sept. 28, down by more than 30% from the peak of 43.2 GW on Sept. 21, and FRCC's preliminary peak on Sept. 29 was just 23.4 GW, down 49.5% from Sept. 22's peakload of 46.4 GW. For the period of Sept. 21-26, FRCC's peakload averaged 44.1 GW. These numbers are from the US Energy Information Administration.

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.

These electric outages hammered gas-fired power demand with sample receipts showing another 400 MMcf/d drop in power plant deliveries on Sept. 29. Over the past several days, Hurricane Ian has cut sample receipts in the state by nearly 1.6 Bcf/d.

Across the broader Southeast, modeled data shows a roughly 3.3 Bcf/d drop in power burn associated with Hurricane Ian. On Sept. 28, Southeast power burn was estimated at just under 8.4 Bcf/d, according to data from S&P Global Commodity Insights.

To regain hurricane status

"Maximum sustained winds remain near 70 mph with higher gusts," the National Hurricane Center said in its 2 pm ET Sept. 29 public advisory. "Ian is expected to become a hurricane again by this evening and make landfall as a hurricane on Friday, with rapid weakening forecast after landfall."

The storm was centered 40 miles northeast of Cape Canaveral, Florida, in the Atlantic at the time of that report.

S&P Global Commodity Insights assesses a day-ahead on-peak bilateral price index for Florida electricity, partly based on Intercontinental Exchange trading, but no such trading occurred the morning of Sept. 29. The index for delivery Sept. 30 was $58.75/MWh, down $1.50 from Sept. 29's $60.25/MWh, and comparable to the month-to-date average of about $100/MWh.

S&P Global's preliminary Florida Gas Zone 3 spot gas price was assessed at $6.25/MMBtu for Sept. 30 flow, virtually flat with the previous price of $6.235/MMBtu for Sept. 29 flow, and comparable with the month-to-date average of $8.544/MMBtu.

Ian also has had an effect on oil and gas production. The latest data from the Bureau of Safety and Environmental Enforcement, published Sept. 28, showed 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 as of Sept. 28. Sample pipeline data from the Mississippi and Alabama offshore on Sept. 29 showed a roughly 150 MMcf/d drop in production receipts with modeled data for the US offshore reflecting a similar drop in output for the wider Gulf of Mexico.

Hard-hit utilities

During a media conference at the Federal Emergency Management Agency headquarters, President Joe Biden said, "I want to say again to the oil and gas executives: Do not, do not, do not use this storm as an excuse to raise gasoline prices or gouge the American public."

Ian made landfall just after 3 pm on Sept. 28 near Cayo Costa, Florida, which is near Fort Myers in Lee County, where the Sheriff Carmine Marceno on Sept. 29 said he believed the death toll would be "in the hundreds," but only one confirmed death had been discovered so far.

Among Florida utilities with more than 100,000 customers, the Lee County Electric Cooperative had the highest percentage offline, at 92.2%, or 201,977 offline out of the co-op's 219,118 customers, according to PowerOutage.us.

But the largest number of customers offline Sept. 29 was that of NextEra Energy's Florida Power & Light, which had 1.2 million customers offline, 21.2% of the utility's 5.6 million customers.

Restoration efforts

As of about 5 pm ET Sept. 29, FPL had restored service to almost 766,000 customers, according to its outage website.

"FPL's restoration workforce has increased to more than 20,000 men and women, including mutual assistance from 30 states, and is working around the clock to restore power to customers" FPL said in a Sept. 29 news release.

Electric utilities pre-positioned equipment and people from 31 other states -- more than 33,000 in all – to expedite restoration of electricity, the Edison Electric Institute said late Sept. 28.

"Hurricane Ian has forever altered the lives of so many of our fellow Floridians and we recognize the road to recovery will be long and challenging," said Eric Silagy, FPL chairman and CEO.

During the FEMA media conference, Administrator Deanne Criswell said, "Hurricane Ian is going to be a storm we talk about for decades."