Southern Co. seeks term coal for 2014-2017 period

Southern Company Services, as agent for the Southern Co. (NYSE: SO) affiliates, solicited bids on July 16 for long-term coal requirements for some of its unnamed rail- and barge-delivered plants.

Sealed bids will be received through July 31. A pre-bid call will take place on July 22. Bids will not be accepted through the Coal Internet Bid System (CIBS) or via fax and e-mail. SCS wants the mailed offers to remain valid for 30 days after bid closing.

The proposal will be for a term of four years, though longer term bids will be considered, with a base period of January 2014-December 2017.

Needed would be:

  • Up to 2,000,000 tons/year beginning for calendar 2014.
  • Up to 4,000,000 tons/year beginning Jan. 1, 2015 forward.

SCS is requesting up to 20% flexibility/option tons in scheduled shipments on a quarterly or semiannual basis. It said it does not intend to resell or remarket flexible/option quantities.

Price should be quoted in U.S. dollars per ton f.o.b. railcar/barge at the proposed loading facility (or CSX and Norfolk Southern interchange) and as a fixed price for years one, two and three (2014-2016) with specified annual escalation (if any) for the following years.

All import coal proposals are to be quoted CIF in either handymax-sized or panamax-sized vessels or f.o.b. railcar or barge delivered into rail- or barge-served port (“Import Terminal”). The transportation services costs from the mine to the Import Terminal must be shown separately from the coal f.o.b. mine cost in the bid pricing.

SCS may accept sulfur up to 5.2 lbs SO2/MMBtu (Georgia Power cannot receive coal with sulfur above 3.0%); however, appropriate economic consideration must be given for sulfur. Seller must specify and guarantee the monthly average sulfur content in addition to the range of expected quality in order for the evaluation process to accurately determine cost involved in the use of such coal.

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.