FACTBOX: Hurricane Helene takes aim at Florida energy infrastructure

Hurricane Helene is expected to have significant impacts on energy infrastructure in Florida and the US Southeast when it makes landfall later Sept. 26.

Utilities moved crews into the region and warned customers of extensive outages possible in the coming days. Over 250,000 customers were already without power by 5:25 pm ET, according to poweroutage.us. The majority, over 225,000, were in Florida, with additional outages in North Carolina and Georgia.

The US National Hurricane Center expects “damaging and life-threatening” winds in northern Florida and southern Georgia, with strong wind gusts likely farther north across portions of northern Georgia and the Carolinas.

How Helene is affecting different energy and commodity markets, according to S&P Global Commodity Insights:

Prices

• Southeast power prices were bearish across the board during Sept. 26 trading. Platts, part of Commodity Insights, assessed Into Southern on-peak day-ahead down $6.50 day on day at $31/MWh and Into GTC on-peak day-ahead down $7 at $33/MWh for Sept. 27 delivery. Florida day-ahead on-peak was assessed $6.75 lower day on day at $39.75/MWh.
• Benchmark Henry Hub spot gas price rose to $2.64/MMBtu, up over 40 cents, or nearly 20%, from the prior weekend settlement amid tightening supply. Major Gulf Coast hubs, including Florida Gas Zone 3 and Transco Zone 3 saw similar increases of 30-40 cents from weekend settlements.
• Helene has so far not had a significant impact on oil prices, as its path in the eastern Gulf veered away from the most prolific oil fields and refining hubs near Texas, Louisiana and Mississippi, the US Energy Information Administration said.
• Jet fuel cracks are at risk should Helene continue toward Atlanta, home of the world’s busiest airport, Hartsfield-Jackson Atlanta International, according to Commodity Insights analysts. Flight cancellations are expected to increase, curbing jet fuel demand.

Infrastructure

Power

• Utilities in or near the storm’s path include Florida Power & Light, Tampa Electric, Alabama Power, Georgia Power, Dominion Energy and Duke Energy, as well as the federal public power company, Tennessee Valley Authority.
• Florida Power & Light Company is pre-positioning damage assessment teams, including dozens of drone teams for a quick restoration, and is restoring power between bands of severe weather when it is safe to do so.
• Georgia Power has more than 10,000 personnel on the ground and continues to refine plans as the storm gets closer.
• Duke Energy has over 18,999 lineworkers and support workers ready to assess damage and restore power.

Oil and gas

• Offshore oil producers had shut in 441,923 b/d of crude as of Sept. 26, or 25% of US Gulf of Mexico production, down from 29% a day earlier, according to the latest update from the US Bureau of Safety and Environmental Enforcement.
• Offshore natural gas producers shut in about 363 MMcf/d, roughly 20% of Gulf production, up from 17% on Sept. 25, BSEE said.
• BP is preparing to ramp up production at several of its major offshore platforms that the company had shut in earlier in the week before Helene’s path veered further east. It had removed some non-essential workers from its Argos, Atlantis, Mad Dog, Na Kika and Thunder Horse platforms.
• Shell started ramping up production at Appomattox in the central-east US Gulf “to normal levels” and started restoring production at its Stones production hub in the remote southern US Gulf, the producer said.

Nuclear

• Nuclear power companies operating in Helene’s path are operating normally. “Our nuclear plants are designed to withstand winds and rain,” said Scott Brooks, spokesman for TVA. “We don’t expect any issues.”
• Southern Company’s 1.8-GW Farley nuclear plant, located in southeast Alabama, is near the projected path of the storm. Duke Energy’s 2.57-GW Oconee nuclear plant in northwest South Carolina and Southern Company’s 1.8-GW Hatch nuclear plant in southeast Georgia are slightly east of the projected path. All are currently operating at or near 100% capacity, with the exception of Hatch-1, which is at 80% power, according to the US Nuclear Regulatory Commission.
• A spokesperson for Southern Nuclear Operating said Sept. 26 that the hurricane is not expected to affect the operations at its three nuclear plants, the 1.83-MW Hatch and 4.85-MW Vogtle in Georgia and the 1.85-MW Farley plant in Alabama.
• In addition, TVA’s 3.95-GW Browns Ferry, 2.44-GW Sequoyah and 2.33-GW Watts Bar nuclear plants are in the projected path of the storm as it moves inland. Browns Ferry-1 shut Aug. 30 for refueling. Sequoyah-2 has been shut since July 20 for refueling and repairs.

Trade flows

• Helene is expected to have only modest impact on onshore gas demand, assuming no major power outages result. Cooler temperatures from the storm cut US Southeast gas-fired power demand by 450 MMcf day on day Sept. 26.
• Dry bulk shipping market participants are closely monitoring Helene and impending port strikes in the US, which could cause potential supply chain disruptions, leading to a short-term dip in demand. However, this may also result in a premium as pent-up demand is released in the US Gulf market.