Weather and force majeure - Force majeure provisions for power contracts

Hurricane Ike left many wholesale power purchasers facing serious financial losses if they could not invoke the force majeure clause in their contracts. Stan Jensen and Jonathan Hoff of Bracewell & Giuliani discuss different elements of force majeure that need to be taken into account in contract risk analysis

In the early hours of September 13, 2008, Hurricane Ike made landfall between Galveston and Baytown, Texas. Ike had tropical storm-force winds extending 550 miles from its eye, including winds of 110 mph. It registered the highest recorded level of the appropriately named Integrated Kinetic Energy (IKE) of any Atlantic storm in history, at 149 Terajoules. Within hours, more than 90% of electrical customers in the Houston metropolitan area (more than 4.5 million people) lost electrical power.


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