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2018 Atlantic Hurricane Season Recap and 2019 Implications for Utilities

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Summary

November 30 marks the official end of the 2018 Atlantic Hurricane Season. The 2018 hurricane season was a stark contrast to the 2017 season in terms of major hurricanes, power outages, and economic impact. Although lighter than previous years, the 2018 hurricane season provides additional implications for utilities for the 2019 season. Below are a few statistics highlighting the differences between the 2017 and 2018 hurricane seasons:

Table 1. 2017 and 2018 Hurricane Seasons Comparison

Year 2017 2018 % Difference
Tropical Depressions 18 16 -11%
Tropical Storms 17 15 -12%
Hurricanes 10 8 -20%
Major Hurricanes (Cat. 3+) 6 2 -67%
Total Power Outages (millions) 10.4 3.1 -70%
Estimated Economic Cost (billions) $282 $33 -88%

 

2018 Major Hurricane Recap

 

Table 2. Hurricanes Florence and Michael Summaries

Statistic Hurricane Florence Hurricane Michael
Landfall Date September 14 October 10
Landfall Strength Category 1, 90-mph sustained winds Category 4, 155-mph sustained winds
Landfall Location Wrightsville Beach, NC Mexico Beach, FL
States Most Impacted NC, SC, VA FL, AL, GA, VA, SC, NC
Power Outage Information
  • 1.4 million customers without power
  • Several varied reports of power restoration efforts exist, but the majority of power was restored within five days
  • 1.9 million customers without power
  • Peak outages (by customer) in Hurricane Michael’s path:
    1. VA – 523K
    2. NC – 492K
    3. FL – 390K
    4. GA – 336K
    5. SC – 117K
    6. AL – 88K
  • The large number of outages in NC and VA can be attributed to the water-logged soil following Florence
Power Utility Restoration Personnel Duke Energy reported dispatching more than 20,000 restoration personnel to restore power—the largest known storm response in the region to date A reported 35,000 restoration personnel were dispatched for storm response and restoration efforts
Estimated Economic Cost $18 billion $15 billion
Key Utility Facts
  • Florence dumped more than 30 inches of rain in some parts of the coastal region of NC in addition to the 10-foot storm surge. The sheer volume of water caused catastrophic flooding along the coast and farther inland along rivers
  • In preparation for the storm, Duke Energy shutdown the Brunswick nuclear plant citing, “The magnitude of the storm is beyond what we have seen in years,” said Howard Fowler, Duke Energy’s Incident Commander
  • Flooding also led to the shutdown of Duke Energy’s L.V. Sutton natural gas plant after the cooling lake encountered a dam breach
  • Michael’s damage along the Florida coast came from high winds and the 14-foot storm surge
  • Additional rain in the already soaked regions of VA and NC caused even more problems for utilities in those areas devastated by Florence
  • The rapid acceleration of Hurricane Michael did not allow time to shut down any power producing facilities. The Joseph M. Farley nuclear power plant near Dothan, AL, reduced production to 30% in preparation for the hurricane but remained operational

Key Takeaways

  • The compounding effects of both Florence and Michael created a situation in NC and VA that was somewhat unexpected
  • In addition to routine storm preparations, utilities should consider the additional risk to the power system when storm paths cross within a short period of time because as the ground becomes saturated, trees are more likely to come down
  • While many utilities have started discussions and executed rate cases to implement storm-hardening programs, the success story with the Florida PSC in 2004-2005 could serve as a starting point for future discussions:
    • The Florida PSC required the state’s utility companies to update their storm plans and invest in “storm-hardened” infrastructure for more than a decade
    • Storm hardening improvements in Florida that started after Hurricane Wilma in 2005 contributed to restoration times for Hurricane Irma (2017) that were more than 100% faster

Implications

  • Storm restoration and hardening is not one size fits all; utilities have variable customer densities, weather patterns, topography/geography, and access to resources, to name a few, and these factors contribute to different methods of storm response
  • Wind and flood mitigation, respectively, for electric and telecommunications infrastructure produced benefit-to-cost ratios of 8.5-to-1 and 9.4-to-1
  • Though varied in execution, utilities have responded in a concerted way to meet the need of improved storm restoration and reliability/resiliency as a whole

More Information

U.S. Energy Information Agency: Energy Disruptions: Previous Hurricanes and Significant Storms

S&P Global: Duke Energy closing in on remaining outages caused by Hurricane Michael

S&P Global: Utilities start restoration as Florence continues to bring heavy rains

S&P Global: Powerful Hurricane Michael makes landfall in Fla. panhandle

S&P Global: Georgia Power restores power to 99% of customers impacted by Hurricane Michael

S&P Global: US utilities in earnings calls discuss hurricane impacts, grid hardening plans

S&P Global: Study shows benefits of most climate mitigation on infrastructure outweigh costs

Utility Dive: Duke shuts down gas plant after Florence flooding breaches coal ash pit

Energy Manager Today: Hurricane Michael Causes Widespread Power Outages, Damage in Southeast

U.S. DOE: https://www.energy.gov/ceser/downloads/hurricane-michael-situation-reports-october-2018

This report is part of ScottMadden’s VIU Minute series. To view all featured VIU Minutes, please click here.

Additional Contributing Authors: Tom Wagner, Farzeen Tejani

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Contributing Authors

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