More than 56,200 people in Texas and nearly 53,000 in Louisiana had no power as of 10:45 a.m. ET, according to outage tracker PowerOutage.US.
Heavy rain and flooding threatened communities still reeling from Hurricane Ida, which made landfall just two weeks earlier.
Utility officials said they did not expect that efforts to restore power to Louisiana would be impacted by Nicholas.
However, South Louisiana Electric Cooperative Association CEO Joe Ticheli said that the damage was so "catastrophic" in the hardest-hit parts of southern Terrebonne Parish that even when power is restored houses and businesses won’t be able to receive it.
Power had largely been restored in New Orleans following a citywide blackout due to Ida, though other problems remained.
While Nicholas dumped as many as 10 inches of rain on parts of Texas, the weather service was reportedly checking on the potential of nearly 14 inches in Galveston and Houston reported more than 6 inches.
Local news outlets reported flooded roads in Baldwin County, Alabama and around Pensacola, Florida.
Parts of Louisiana also received more than 10 inches of rain from the storm.
Rain is expected to linger for days in Louisiana and the National Hurricane Center issued flash flood watches along the central Gulf Coast from portions of southeast Louisiana, southern Mississippi, Alabama and the Florida Panhandle.
The agency said that Nicholas is expected to produce additional rainfall amounts of 2 to 4 inches across the region on Friday with isolated storm totals of 12 inches possible.
At 4 a.m. CT, the center of the post-tropical cyclone was positioned over Louisiana about 140 miles south-southeast of Alexandria and around 60 miles south-southeast of Lafayette.
Widespread minor river flooding is expected as well and scattered moderate river flooding is possible for portions of southeastern Louisiana, southern Mississippi, southern Alabama and the Florida Panhandle.
Nicholas – with maximum sustained winds near 25 mph – is projected to drift slowly northward over the next few days and slight weakening is forecast on Thursday.
"The center of Nicholas may become ill-defined during the next couple days as it struggles to develop minimal thunderstorm activity near its center," the hurricane center said.
The Associated Press contributed to this report.