Big Rivers Electric is seeking bids by mid-day on April 20 for coal and petroleum coke for its Wilson, Coleman, Green, Reid, and Station Two (Henderson) power plants.
The delivery period for this solid fuel would begin on or about May 1, and run through the end of this year. Big Rivers Electric also said it will consider term offers for years 2013 through 2017, or some portion thereof. Big Rivers is seeking about 250,000 to 500,000 tons of solid fuel for the remainder of 2012 for spot delivery, and up to 800,000 tons of coal per year for years 2013 through 2017. The bids need to remain open until May 11, giving Big Rivers time to evaluate them.
Bids can be lodged based on five different sets of coal specs, called Specs A-E, and also on a separate set of specs for petroleum coke. Heat content minimums under the coal specs range from 10,500 Btu/lb to 11,800 Btu/lb, with maximum SO2 specs ranging from 5.5 lbs/MMBtu to 6.5 lbs/MMBtu.
For any questions, contact fuel buyer Mark McAdams, 270-844-6169.
Oxford battles with Big Rivers over coal contract
On March 2, Oxford Resource Partners LP (NYSE: OXF) received a notice of contract termination from Big Rivers Electric related to a deal for coal out of Oxford’s western Kentucky strip mining operations, said Oxford in its March 14 annual Form 10-K filing. The notice said that Big Rivers was terminating an amended and restated coal supply agreement effective as of the close of business on March 2.
Big Rivers said coal deliveries have not conformed to the quality specifications in the agreement. The agreement covers 800,000 tons of coal per year and runs until the end of 2015, Oxford said.
“We have met with representatives of Big Rivers on two occasions following this action (on March 7 and March 12, 2012), but have been unable to achieve any satisfactory resolution of the issues during these meetings,” said the Oxford Form 10-K. “We are assessing the validity of the termination notice and any recourse that we may have under the Big Rivers Agreement or otherwise with respect to the actions by Big Rivers, including the termination.”
Oxford didn’t give any more details about the contract. A Feb. 16 filing that Big Rivers made at the Kentucky Public Service Commission in a fuel adjustment clause case said that it had one contract with Oxford during the May-October 2011 fuel review period. That contract was executed in October 2007 and calls for coal out of Oxford’s Schoate prep plant in Muhlenberg County, Ky.
The Oxford contract, which has a base period that is due to expire at the end of 2015, calls for 800,000 tons of B or C quality coal in 2012. B or C denotes certain differences in coal specs, which can impact the contract price. In 2013, the contract only calls for 200,000 tons of B or C quality coal. Then in each of 2014 and 2015, it calls for 800,000 tons per year and also 200,000 tons per year of B or C quality coal. Even though the official contract expiration is shown as the end of 2015, Big Rivers indicated possible shipment of 800,000 tons of B or C quality coal in 2016. The actual deliveries in the May-October 2011 period under this contract were 366,146 tons of B quality coal, with no A or C quality coal shown as being delivered during that period. The current contract price as of 2011 for the B quality coal was $32.44/ton, the Big Rivers filing said.
The Big Rivers fuel filing shows only one coal contract that is due to expire at the end of 2012. That is a deal with Armstrong Coal for 500,000 tons this year out of the Parkway mine in Muhlenberg County, Ky. The current contract price for that coal is $46.72/ton.