Generation powers through bitterly cold winter

When it comes to measuring generation reliability, the importance of winter peak season is growing because cold weather blasts are as unpredictable as summer’s hot temperatures.

The winter of 2014 certainly proved that to be true.

Facing bitterly cold temperatures for an extended period of time, Mississippi Power’s generating fleet and employees performed incredibly and registered a winter peak season equivalent forced outage rate result of 0.52 percent.

EFOR is the industry standard used to measure a generating fleet’s availability when it is needed. The national average for winter peak season EFOR is about 7 percent.

“With temperatures at or below freezing for several weeks during January and February, our generation employees answered the call of our customers,” said Vice President and Senior Production Officer Allen Reaves. “They safely provided the reliable service that Mississippi Power customers have grown accustomed to receiving.”

On the coldest days of January, all of Mississippi Power’s generation resources – both coal and gas – were called on to help heat homes and businesses across the service territory.

The drop in temperatures sent the price of natural gas soaring across the country. In the Northeast, where pipeline infrastructure is limited, prices reached all-time highs.

Bloomberg recently reported daily power sales in New York averaged $165.24 a megawatt-hour from the end of December to March 24, an increase of 91 percent from a year earlier.

Southern Company Gas Services coordinates the execution of Mississippi Power’s daily purchases of natural gas from the Henry Hub Natural Gas Futures market in Louisiana. Natural gas is purchased under a combination of both long-term base load and short-term spot market purchases. Both types of purchases are priced at market on the day of delivery.

On average, the company paid nearly $6/mmBTU of natural gas during February 2014, with the highest price topping out near $7.90.

“Our group comes to work every day realizing that every dollar we spend has a direct impact on our customers,” said David Mauffray, Fuels Services manager. “So we’re constantly looking to lower or stabilize fuel prices.”

The addition of lignite at the Kemper County energy facility to the company’s fuel portfolio of coal and natural gas will help customers avoid an overreliance on one fuel source and avoid the volatility of the natural gas market.