Yahoo Finance US Fears Above-Average Hurricane Season: Are Utilities Prepared?
The Atlantic Hurricane season spans from Jun 1 to Nov 30 and brings severe storms, which impact the electric supply infrastructure of the utility companies. Nature’s fury is unpredictable and to reduce the impact of severe weather conditions, utilities have invested millions of dollars in fortifying their infrastructure.
For 2024, the National Oceanic and Atmospheric Administration has predicted an 85% chance of an above-normal hurricane season, with 17-25 named storms and eight to 13 hurricanes, including four to seven major hurricanes. This year’s forecast is around 30% more storm activity compared to the number of storms predicted last year.
Thanks to the improvement in weather forecasts and technology, utilities can locate areas in their service territories that are historically prone to severe weather conditions. Utilities have been working on a multi-year infrastructure strategy to strengthen the electric grid, making it resilient enough to withstand the challenges posed by severe weather conditions.
Electric utilities are burying outage-prone electric service lines, managing vegetation near power lines and installing smart equipment that can detect outages quickly and automatically take corrective actions. Utilities are also working to save essential equipment in flood-prone areas and strengthen the poles and wires that need to withstand the fury of nature.
Utilities upgrade and strengthen electric infrastructure work throughout the year to improve their quality of service and provide service even during difficult weather conditions.
Utilities Taking Initiatives
Measures taken by a few utilities to counter the hurricane season are mentioned below.
Dominion Energy D has been investing steadily to upgrade its infrastructure. Dominion’s unit Dominion Energy Virginia has completed burying 2,000 miles of overhead power lines, which is part of the company’s Strategic Underground Program. The shifting of power lines underground will lower storm-related outages and reduce the time for restoration of power in outage-prone areas during the hurricane season.
NextEra Energy NEE has a comprehensive and flexible storm response plan. NextEra Energy unit Florida Power & Light Company has invested in a stronger, smarter and more storm-resilient energy grid that benefits customers by improving the speed of restoration and reducing outage times following severe weather. The company has invested in a smart grid, buried power lines and replaced nearly all of its transmission structures with steel or concrete.
FirstEnergy FE is also regularly making investments to strengthen its transmission and distribution network. The company is also using helicopters to inspect the transmission lines. The purpose of the inspections is to search for equipment issues that are not apparent from the ground and faults that are not visible from the ground. FirstEnergy also uses thermovision cameras to take infrared pictures of electrical equipment, assisting in the identification of possible issues in power lines.
All these stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
Each of the stocks mentioned above has performed better than the industry in the past six months.
Image Source: Zacks Investment Research
Round Up
We require a 24X7 supply of electricity to smoothly continue our daily chores but the devastation caused by hurricanes can disrupt the power supply. Global warming has made these storms even more destructive. Yet, investors should note that utilities have been bracing their stocks against any upheaval that these storms might trigger.
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NextEra Energy, Inc. (NEE): Free Stock Analysis Report
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