Tampa Electric coal burn projected to rise to 4.9 million tons in 2014

Tampa Electric is looking for a small increase in coal burn in 2014, with 4.7 million tons of burn projected for this year and 4.9 million tons next year.

The utility on Aug. 30 filed with the Florida Public Service Commission its latest projections for 2013 fuel consumption and initial projections for 2014. Coal consumption is mostly at the Big Bend power plant, with some coal also gasified along with petroleum coke at the Polk Unit 1 integrated gasification combined cycle facility.

Coal burn in 2011 was 4.8 million tons, falling to 4.7 million tons in 2012 and an estimated 4.7 million tons in 2013, then rising to a projected 4.9 million tons in 2014. Actual and projected coal costs are $81.12/ton ($3.38/mmBtu) in 2011, $84.59/ton ($3.52/mmBtu) in 2012, $81.15/ton ($3.39/mmBtu) in 2013 and $81.14/ton ($3.38/mmBtu) in 2014.

Notable is that Tampa Electric doesn’t offer separate figures for petroleum coke, so they are apparently lumped into the coal category.

J. Brent Caldwell, Tampa Electric’s Director of Origination & Market Services, testified that the addition of FGD scrubbers on a number of coal plants has made Illinois Basin coal, which is burned at Big Bend, a viable option for those units thus increasing the demand and price for Illinois Basin coal. Additionally, over the past couple of years, coal inventories have declined, and in some areas, coal production has even been idled. However, with Tampa Electric’s existing coal purchase agreements, the impact of coal market price changes is mitigated through 2014, Caldwell noted.

Coal prices and coal transportation prices are projected using contracted pricing and information from industry-recognized consultants and published indices and are specific to the particular quality and mined location of coal utilized by Big Bend and Polk Unit 1. Final as-burned prices are derived using expected commodity prices and associated transportation costs.

Tampa Electric expects to receive some of its solid fuel supply needs as waterborne deliveries to its unloading facilities at Big Bend on Tampa Bay. These deliveries may come through United Bulk Terminal, from other terminals along the Gulf Coast, or from foreign sources.

Tampa Electric can receive coal at its Big Bend Station via both waterborne delivery and rail delivery. Once delivered to Big Bend, Polk Unit 1 solid fuel is transported to Polk Station via trucks.

Tampa Electric expects to receive approximately 2 million tons of coal through the Big Bend rail facility during 2014, for use at Big Bend. As part of the CSX Transportation rail agreement, Tampa Electric receives a per ton discount, treated as a reimbursement, for each ton of coal delivered, all of which is flowed through to customers through the fuel and purchased power cost recovery clause.

Tampa Electric supplied Big Bend’s coal needs through a combination of two “base” coal supply agreements that continue through 2014 and a collection of shorter term contracts and spot purchases. These shorter term purchases allowed the supply to adjust for changing coal quality and quantity needs, operational changes and pricing opportunities. Tampa Electric has contracted about three-fourths of its 2014 expected coal needs through bilateral agreements. It anticipates the remaining solid fuel purchases for Big Bend and Polk Unit 1 will be procured through spot market purchases in 2013 and 2014.

The coal-fired units at Big Bend are fully scrubbed and designed to burn high-sulfur Illinois Basin coal. Polk Unit 1 currently gasifies a mix of petroleum coke and low-sulfur coal. Each plant has varying operational and environmental restrictions and requires fuel with custom quality characteristics such as ash content, fusion temperature, sulfur content, heat content and chlorine content.

U.S. Energy Information Administration data shows coal deliveries this year under contract terms to expire at the end of 2014 from Alliance Coal out of the Warrior prep plant and Elk Creek operations in western Kentucky, and spot deliveries from Peabody Energy‘s Bear Run and Sunrise Coal‘s Carlisle mines in Indiana.

The EIA figures only show deliveries to the plant itself. An Aug. 15 monthly fuel report that Tampa filed with the Florida PSC for June shows deliveries to United Maritime Group for re-delivery to Big Bend via barge of coal from Armstrong Coal (spot), Patriot Coal (spot) and Knight Hawk Coal (contract). Glencore also shows up as delivering low-sulfur South American coal, which apparently would be for re-delivery to Polk.

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.