Florida Power & Light Co. Faces Gas Shortage After Hurricane Katrina

Strategic Insights -

Florida Power & Light Co. (FPL) is facing a natural gas shortage due to Hurricane Katrina's damage to oil and gas facilities in the Gulf of Mexico. The company is receiving only about half its normal daily deliveries of natural gas, but it has adequate supplies of natural gas and residual fuel oil in storage to keep its generating plants operating. FPL is urging customers to conserve electricity to save energy and minimize the impact of the shortage.

Key Takeaways:

  • FPL is receiving only about half its normal daily deliveries of natural gas since Hurricane Katrina damaged oil and gas facilities in the Gulf of Mexico.
  • The company has adequate supplies of natural gas and residual fuel oil in storage to keep its generating plants operating.
  • FPL has increased purchases of power from out of state and from other Florida utilities to lower its use of natural gas and fuel oil.
  • The company's generating plants can run on either natural gas or fuel oil, and others run on natural gas, nuclear power, or coal.
  • Natural gas generates about 38 percent of FPL's energy, while nuclear power accounts for 21 percent, fuel oil 18 percent, and coal 6 percent.
  • The amount of purchased power represented 18 percent of electricity supplied last year.
  • FPL is urging customers to conserve electricity by voluntarily setting their air conditioning thermostats higher, keeping curtains and blinds closed, and turning off unnecessary lights and appliances.

Statistics:

  • FPL is burning an average of 1.1 billion cubic feet of natural gas per day.
  • Hurricane Ivan caused a minor impact on FPL's natural gas supplies for about three to five days last year.
  • About 84 percent of Gulf natural gas production has been halted by Hurricane Katrina, with a normal production rate of 10 billion cubic feet of gas per day.
  • FPL has seven to 10 days of natural gas in storage.
  • The US government's Minerals Management Service reported that about 84 percent of Gulf natural gas production had been halted by Katrina.

Sources:

  • South Florida Sun-Sentinel
  • Florida Power & Light Co. (not directly quoted)
  • US Minerals Management Service