EKPC deals with excess coal inventory, outlines coal contracts

The coal inventories of East Kentucky Power Cooperative as of April 30 exceeded its inventory targets, with a particularly bloated coal inventory at its Cooper power plant.

As of April 30, EKPC had a total of 976,622 tons in inventory or about 44 days of burn. At Dale, the inventory was 63,470 tons and 26 days of supply, at Cooper it was 204,696 tons and 56 days, and at Spurlock it was 708,456 tons and 44 days. “East Kentucky’s coal inventory as of April 30, 2012, exceeded its target range of 25-40 days’ supply by four days,” the cooperative said in a Sept. 12 fuel case filing at the Kentucky Public Service Commission. “The Dale Power Station inventory was within its target range of 25-40 days’ supply. The Cooper Power Station inventory exceeded its target range of 25-40 days’ supply by 16 days. The Spurlock Power Station inventory was higher than its range of 25-40 days’ supply by four days.”

The reason for the Cooper excess was that East Kentucky was purchasing and stockpiling high-sulfur coal at Cooper to be used for testing the newly installed air quality control system on Unit 2, EKPC noted. Cooper Unit 2’s new emissions controls are flue gas desulfurization, electrostatic precipitator and selective catalytic reduction.

EKPC reported that its only current coal contract litigation is with bankrupt Appalachian Fuels LLC, with the cooperative saying the coal company’s liability in this is about $24.4m, not including interest. This was over a terminated 2001 contract to supply coal to Spurlock. EKPC said it will pursue its claim at the Appalachian Fuels bankruptcy court, which is the U.S. Bankruptcy Court for the Eastern District of Kentucky.

Here are EKPC’s term contracts of at least one year in length, by power plant, as outlined in the Sept. 12 filing:

Dale:

  • Trinity Coal Marketing LLC, contract date of December 2005, contract length is 7 years and 4 months, 120,000 tons per year contracted, with a current price of $61.32/ton, with is the base price in the original contract plus any escalations since then.
  • Perry County Coal, December 2009 contract with a 4-year term, 240,000 tons per year, current price of $93.83/ton.

Cooper:

  • Trinity Coal Marketing, August 2006 contract with a 6-year term, 99,400 tons contracted in 2011, current price of $95.11/ton.
  • B&W Resources, November 2009 contract with a term of 4 years and 8 months, 240,000 tons contracted in 2011, price is $82.62/ton.
  • Trinity Coal Marketing, May 2010 contract with 4-year and 6-months term, 165,600 tons contracted in 2011, price of $71.33/ton.
  • Jamieson Construction, May 2010 contract with a 3-year term, 96,000 tons in 2011, current price of $83.79/ton.

Spurlock:

  • Oxford Mining, November 2004 contract with a term of 10 years, 600,000 tons contracted in 2011, price of $45.52/ton.
  • Armstrong Coal, October 2007 contract with a term of 3 years and 10 months, 540,000 tons contracted in 2011, price of $30.86/ton.
  • B&N Coal, July 2008 contract with a 6-year term, 230,100 tons contracted in 2011, current price of $42.26/ton.
  • B&N Coal, February 2011 contract with a 5-year and 3-month term, 163,050 tons contracted in 2011, price of $42.68/ton plus $1/ton surcharge.
  • Williamson Energy LLC, August 2008 contract with a 9-year term, 240,000 contracted tons in 2011, price of $59.50/ton.
  • Oxford Mining, August 2008 contract with an 8 year and 5 month term, 360,000 tons contracted in 2011, $52.92/ton.
  • White County Coal LLC, September 2008 contract with a 6-year term, 240,000 tons contracted in 2011, $51.75/ton.
  • Alpha Coal Sales, August 2009 contract with a 3-year term, 180,000 tons in 2011, $56.79/ton.
  • Consolidation Coal, August 2009 contract with a 3-year term, 257,446 tons contracted in 2011, $55.50/ton.
  • Alpha Coal Sales, May 2010 contract with a 3-year term, 120,000 tons contracted in 2011, $52.07/ton.
  • James River Coal Sales, May 2010 contract with a 2.5-year term, 120,000 tons contracted in 2011, $44.10/ton.
  • Peabody COALSALES, June 2010 contract with a 1.5-year term, 300,000 tons contracted in 2011, $40.67/ton.
  • Peabody COALSALES, July 2010 contract with a 3-year term, 180,000 tons contracted in 2011, $53.02/ton.
  • American Energy, September 2010 contract with a 6-year term, 120,000 tons contracted in 2011, $47.57/ton.
  • Armstrong Coal, July 2011 contract with a 3-year term, no tons shown for 2011, with 70,000 tons for the January-July period in 2012, $43.51/ton.
  • Patriot Coal Sales, July 2011 contract with a 3-year term, no tons in 2011 and 128,000 tons in the January-July period this year, $51.09/ton.
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.