At a time when most utilities are contracted for more coal than they can burn, American Electric Power (NYSE: AEP) said July 19 that is seeking offers for the supply of eastern coal to its Clinch River plant in Cleveland, Va.
AEP is seeking coal delivery proposals for up to 20,000 tons of Central Appalachian coal per month, delivered by Norfolk Southern rail or truck, beginning as early as September 2012 and ending as late as December 2014. Proposals with alternative terms will be accepted. Accepted bids will be at AEP’s discretion. Proposal packages must be received by AEP no later than 5 p.m., July 26.
Bid specs include 12,500 Btu/lb, 7% moisture, 12% ash and 1.05 lbs/mmBtu of SO2. That makes this a compliance coal (equal to or less than 1.2 lbs/mmBtu of SO2), which is a relatively expensive and scarce coal in the Central Appalachia market.
Proposals can be submitted by e-mail to email@example.com, by fax to (614) 583-1619 (Attn. Jason Rusk), or by mail to Jason Rusk, Director, Coal Procurement, American Electric Power Service Corp., 155 W. Nationwide Blvd., Suite 500, Columbus, Ohio 43215.
Apparently there is some kind of turnaround in demand at Clinch River. AEP’s Appalachian Power unit is in a fight with an intervenor in an ongoing case at the West Virginia Public Service Commission over APCo’s burn-off of expensive low-sulfur coal late last year at the scrubber-equipped Mountaineer plant, displacing cheaper high-sulfur coal at that plant. APCo said it needed to get rid of that low-sulfur coal, in part, because it had overcommitted to what later turned out to be a poor 2011 burn at Clinch River.
“Company witness Rusk explained in his rebuttal testimony the circumstances which led to the use of some lower sulfur coal at Mountaineer,” APCo wrote in a July 11 brief filed at the West Virginia PSC. “This coal was not specifically purchased for use at the Mountaineer Plant. However, low sulfur coal had to be purchased for use at two other APCo plants, Clinch River and Glen Lyn, neither of which has a scrubber to accommodate the use of higher sulfur coals. In 2011, those plants were consuming greater quantities of lower sulfur coal and it was necessary for APCo to purchase additional supplies of such coal for those plants. When generation needs subsequently decreased, not all of the low sulfur coal under contract was needed at those two plants. At the same time, large supplies of higher sulfur coal which had been contracted for to be burned at the Mountaineer Plant were unavailable due to a number of problems with a principal supplier.”
Notable also is that Clinch River Unit 3 (235 MW in size) is targeted by AEP for retirement by June 2015.