The U.S. coastline has been hit yet again by a raging storm. This time it is Hurricane Ida, which made its landfall on Aug 30 in the state of Louisiana and later hit Mississippi. The devastating impacts of this category 4 hurricane have left at least one million people without power in the states of Mississippi and Louisiana, as stated by PowerOutage.us.
While the storm seems to have hit the energy sector most, by sending almost 95% of the U.S. oil and gas production offline in the Gulf of Mexico, the spotlight is also on the Utilities sector.
Ida’s Impact Until Now
As far as the economic impact of this storm is concerned, with Ida being recognized as the fifth strongest storm ever to hit the U.S. mainland, modest damages are estimated by analysts. Mark Zandi, the chief economist at Moody’s Analytics, estimates that Ida will likely lead him to downgrade the annual U.S. economic growth estimate for third-quarter 2021 by a few tenths of a percentage point, as reported by Associated Press. In some other reports, Accuweather’s Dr. Joel N. Myers forecast total damage and economic loss from Hurricane Ida to be between $70 billion and $80 billion.
In terms of utilities, while widespread power outages occurred in Hurricane Ida-affected regions, the restoration of power has become all the more difficult with heavy flooding impacting the rehabilitation work. Notably, more than 25,000 workers from around the country have been mobilized to support power restoration in the state of Louisiana, as stated by CNN.
As mentioned by
Entergy ( ETR Quick Quote ETR - Free Report) , the state’s largest power supplier, this catastrophic storm resulted in it losing all eight transmission lines delivering power to New Orleans. The loss of transmission led to a load imbalance, which resulted in generation dropping offline. Entergy has warned that it might take several days and even weeks to restore power in the hardest-hit areas. Where’s Ida Heading?
After losing some strength, Hurricane Ida hit the coasts of New York on Sep 1, resulting in flash flooding, which prompted Mayor Bill de Blasio to declare a state of emergency. As stated by CNN, through Sep 2, a band of extremely heavy rain from Ida will move into Rhode Island and Massachusetts, possibly resulting in dangerous flooding . This might result in power supply disruption in these states.
Utilities to Watch
Considering the aforementioned developments, investors might keep the following utilities on their watchlist. These are focused on tackling the current devastations caused by Hurricane Ida.
Entergy’s storm team of more than 20,000 is assessing the vast damage and destruction across New Orleans, southeast Louisiana, and Mississippi, and restoring service where it is safe to do so. Its team has been able to assess about 36% of the impacted infrastructure and has identified 2,095 broken poles, 422 damaged transformers, and 2351 downed spans of wire statewide. The company carries a Zacks Rank #3 (Hold). Consolidated Edison’s ( ED Quick Quote ED - Free Report) crews are working to restore power to approximately 13,817 customers, including approximately 8,244 located in Westchester, NY. It carries a Zacks Rank #3. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Per multiple news sources,
Duke Energy’s ( DUK Quick Quote DUK - Free Report) crews will be stationed in north Florida before continuing on Louisiana, where they will work alongside crews from Entergy Louisiana. This Zacks Rank #3 company has reportedly pledged to support linemen, vegetation management crews, and damage assessors.
Florida Power & Light Company, a subsidiary of
NexEra Energy ( NEE Quick Quote NEE - Free Report) , has sent a team of more than 750 employees and contractors to assist Entergy Louisiana and Cleco with their restoration work. The company carries a Zacks Rank #3.