Gas, cheap power cut into Wisconsin Public Service coal burn

Wisconsin Public Service Corp. burned less coal in 2011 than expected in part due to cheap natural gas, the company told the Wisconsin Public Service Commission in a March 28 filing.

In total, the 2011 monitored fuel and purchased power costs were lower by $0.66/MWh or 2.86% less than forecasted in the 2011 Fuel Cost plan, the company said. “The lower monitored cost is primarily due to lower purchased power prices for energy resulting from lower natural gas prices, additional generation resources (renewable and baseload) added to the MISO footprint, increased flexibility in the operation of WPSC’s generation fleet and increased purchases under the Dominion Energy Kewaunee purchased power agreement,” it added.

As a result of the lower price for purchased power, coal-fired generation was down and purchased power volumes were up, since it was more economic to purchase power than to generate with coal than was forecasted in the 2011 Fuel Cost Plan. This helped to reduce overall power supply costs. In addition opportunity sales revenue was up due to higher market demand, higher market prices (mainly in July/August) for power and high unit availability, which also helped to lower the average cost of monitored fuel costs for 2011.

The projected coal generation in 2011 from the Pulliam, Weston, Columbia and Edgewater plants had been 10,461,368 MWH at a fuel cost of $24.74/MWH. The actual figures for 2011 turned out to be 8,696,854 MWH at $24.75/MWH.

WPSC is a unit of Integrys Energy Group (NYSE:TEG).

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.