Power Industry Prepares for Potential Impact of Hurricane Gustav

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Researched by Industrial Info Resources (Sugar Land, Texas)--Anxiety is building across the Gulf Coast as Tropical Storm Gustav has once again reached hurricane strength. There is still great uncertainty over when and where this potentially devastating storm will make landfall. At this point it seems certain Hurricane Gustav will enter the Gulf of Mexico and has either Louisiana or South East Texas in it's sights for a landfall Monday morning. None the less, you can be sure that plant operators from the Panhandle of Florida to Brownsville Texas are watching this hurricane with a careful eye.

Across this vast geographic range there are 77 power plants that are watching the storm and bracing for a potential direct impact. These plants are home to 287 operational generating units with a total capacity of 44,700-megawatts. Included in this total is 18,900-megawatts is base load capacity followed by 16,000-megawatts of intermediate load and 9,800-megawatts of peaking capacity. Some of the largest plants included in this area are NRG Energy Incorporated's (NYSE:NRG) (Princeton, New Jersey) 2560-megawatt South Texas Nuclear Generating Station near Wadsworth, Texas and their 1500-megawatt natural gas fired Cedar Bayou Plant near Baytown, Texas. It is a safe bet to assume that Entergy Corporation (NYSE:ETR) (New Orleans, Louisiana) is keeping a watchful eye on Gustav as well as they have 10,000-megawatts at 10 plants included in potential strike areas. These plants include their Waterford 1 & 2 natural gas fired units and Waterford 3 Nuclear Station near Hahnville, Louisiana as well as the Sabine Station near Bridge City, Texas. Southern Company (NYSE:SO) has assets in the potential strike areas as well including the Farley Nuclear Generating Station in Alabama and the Victor J Daniel and Jack Watson Plants in Mississippi.

On the surface it would appear that the greatest concern is that of a direct hit from the storm and rightly so. However should this storm churn through the Gulf of Mexico with an intensity similar to that of Hurricanes Katrina and Rita in 2005 the effects can be much more far reaching than the landfall site. The possibility of major damage to natural gas and oil production facilities both onshore and offshore could have potentially far reaching effects on the power industry. In the states of Alabama, Florida, Mississippi, Louisiana and Texas alone there are over 1,044 generating units 122,000-megawatts fueled by natural gas or fuel oil and an additional 27,000-megawatts from associated combined-cycle steam turbines. It goes without saying that the effects of a hurricane striking anywhere on the Gulf Coast and causing disruption in oil and gas production would stretch far beyond these few states. Overall natural gas and fuel oil fired units along with combined-cycle steam turbines 466,000-megawatts from power plants in the United States. Undoubtedly the price increases associated with these disruptions are passed along to the consumer. With this being said Gustav might not only have us clutching our wallets at the gas pump but we will likely be watching our electric meters as well.

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