Quiver Quantitative - The U.S. East Coast is grappling with significant power disruptions following a massive winter storm, affecting over half a million homes and businesses from Florida to Maine. According to PowerOutage.us, New York has been the hardest hit, with nearly 143,000 customers without electricity. This is closely followed by Pennsylvania, North Carolina, and New Jersey, experiencing approximately 105,000, 70,000, and 58,000 outages respectively. The primary power companies in these states include Con Edison (ED) in New York, FirstEnergy (NYSE:FE) in Pennsylvania, Duke Energy (NYSE:DUK) in North Carolina, and Public Service Electric and Gas in New Jersey, a subsidiary of Public Service Enterprise Group (NYSE:PEG).
This extreme weather event is reminiscent of the February 2021 freeze that left millions in Texas and other central U.S. states without essential services like power, water, and heating for days. It also echoes the December 2022 winter storm, which nearly caused the collapse of power and natural gas systems in the eastern half of the country. According to data from financial firm LSEG, the current storm precedes what is expected to be the nation's coldest weather since December 2022.
Market Overview: -A monstrous winter storm claws its way across the US East Coast, leaving over 500,000 homes and businesses grappling with power outages. -New York, Pennsylvania, North Carolina, and New Jersey bear the brunt of the icy grip, with millions facing frigid nights and disrupted schedules. -Utility giants like Con Edison, FirstEnergy, Duke Energy, and PSE&G (PEG) scramble to restore power, echoing the vulnerabilities exposed in Texas in 2021 and the near-collapse of the eastern grid last December.
Key Points: -This icy onslaught casts a chilling shadow of past cold snaps, like the 2021 Texas freeze and the December 2022 near-disaster, highlighting the precariousness of energy infrastructure in extreme weather. -LSEG data paints a bleak picture, foreshadowing potentially record-breaking cold in the coming days, raising concerns about grid stability and the ability to meet increased heating demands.
Looking Ahead: -The December 2022 "Elliott" storm exposed vulnerabilities in gas-fired power plants and gas pipeline networks, forcing rolling outages and starkly illuminating the fragility of supply chains during extreme weather events. -The question lingers - have proper safeguards been implemented since then? Can the grid, and the communities it serves, weather yet another frigid test?
The December 2022 storm, known as Elliott within the energy industry, forced energy companies such as the Tennessee Valley Authority (TVC) and Duke Energy to implement rotating outages to maintain electric reliability. This was due to the failure of dozens of power plants to operate under the extreme conditions. Additionally, gas flows into pipelines were significantly reduced during the storm, as output dropped partly due to the freezing of gas wells, pipes, and other equipment. This situation was exacerbated by a surge in demand for gas for heating and power generation, resulting in dramatically lowered line pressures.
The ongoing power outages highlight the challenges faced by energy companies and the broader infrastructure in dealing with severe weather conditions. It underscores the need for enhanced resilience and preparedness in the face of increasingly frequent and intense weather events, which pose significant risks to essential services and the overall well-being of affected communities.
This article was originally published on Quiver Quantitative