Big Rivers outlines recent coal, petcoke procurement details

Big Rivers Electric purchased nearly 2.6 million tons of coal and petroleum coke in the November 2012-April 2013 period.

Big Rivers, which lately has been struggling with the potential loss of major power customers, on Aug. 29 filed its latest twice-yearly fuel report at the Kentucky Public Service Commission.

The cooperative’s solid fuel buys during the period were from:

  • Alliance Coal, coal, 417,500 tons, contract;
  • Alliance Coal, coal, 104,905 tons, spot;
  • Armstrong Coal, coal, 286,393 tons, contract;
  • Armstrong Coal, coal, 78,699 tons, spot;
  • ExxonMobil, petcoke, 119,117 tons, spot;
  • Foresight Coal Sales, coal, 192,989 tons, spot;
  • KenAmerican Resources, coal, 76,274 tons, spot;
  • Oxbow Carbon & Minerals, petcoke, 49,233 tons, spot;
  • Patriot Coal Sales, coal, 379,964 tons, contract;
  • Peabody Coal Sales, coal, 286,477 tons, spot;
  • Sebree Mining LLC, coal, 473,991 tons, contract; and
  • TCP Pet Coke, petcoke, 130,740 tons, spot.

The burns, receipts and capacity factors by plant during the review period were:

  • Reid Station (Coal) 0.00 tons, 674 tons, -3.32%;
  • Henderson Station Two (Coal) 336,692 tons, 364,894 tons, 75.41%;
  • Green Station (Coal), 663,034 tons, 665,421 tons, 89.10%;
  • Green Station (Petcoke), 160,025 tons, 155,844 tons;
  • Coleman Station (Coal), 781,764 tons, 727,541 tons, 85.25%;
  • Wilson Station (Coal), 623,086 tons, 538,662 tons, 90.76%; and
  • Wilson Station (Petcoke), 114,166 tons, 143,246 tons.

Outlined in the filing were the basics specs for the Big Rivers coal contract that were in were in effect during the review period. The newest, from March 2012, runs through the end of 2016 and calls for 960,000 tons in 2013 and 800,000 tons in 2014, out of the Onton No. 9 mine in western Kentucky of Sebree Mining. Sebree Mining is an Alliance Coal affiliate. Alliance Coal has a separate, July 2010 contract out of the Cardinal mine in western Kentucky, which expires at the end of 2013 and calls for 750,000 tons this year.

Big Rivers had 523,701 tons of solid fuel in inventory as of April 30, which is 30 days of supply at recent burn rates. As for inventory factors, the cooperative said:

  • Green Station had a petcoke inventory level of 21,868 tons as of April 30, and has a target blend of 20% with Green coal. Wilson Station had a petcoke inventory level of 54,206 tons as of April 30, and has a target blend of 25% with Wilson coal. Reid Station Unit 1 was in standby reserve 180 days. Reid 1 was out of service one day due to a scheduled outage. The duration of generation was reduced to 0 days but Reid had a 16 day supply of compliance coal but was not utilized by the Midcontinent ISO due to economic conditions.
  • Station II Units 1 and 2 had unscheduled and maintenance hours of 318.8 hours and Unit 2 had a planned outage of 240 hours in February 2012 and H2 had a planned outage of 737 hours in March and April 2013 which extended into May 2013. Unit 2 had reserve hours of 64.3 hours. These hours were equivalent to 23 days. The duration of generation was reduced to 158 days.
  • Green Units 1 and 2 had unscheduled and maintenance hours of 165.2 hours. The Green Units had no reserve hours or planned outages during the review period. The duration of generation was reduced to 178 days.
  • Coleman Station Unit 1 was on standby reserve during the review period for 25.0 hours. Coleman Station Units 1, 2 and 3 had 509.3 unscheduled hours during the review period and 31.6 hours of scheduled maintenance hours for a total of 535.9 hours out-of-service. The duration of generation was reduced to 173 days.
  • Wilson Unit 1 had unscheduled and scheduled maintenance hours of 169.4 hours during the review period. The duration of generation was reduced to 174 days.

Big Rivers noted that it is still in litigation with Oxford Mining Co.-Kentucky LLC over Big Rivers’ terminated of a contract over what the cooperative claimed were defaults due to poor coal quality specs for delivered coal. Wrote the cooperative’s Mark McAdams: “The action filed by Oxford is in the discovery stage and, as previously reported, the parties have exchanged discovery by producing documents and answering written questions. Disputes which developed with respect to the production of documents have been resolved. The initial depositions to be taken in the case have been scheduled and will be taken during late September 2013. The above suit is the only current litigation with coal suppliers, and it is pending.”

About the loss of aluminum customers, the filing said: “Since receiving the contract termination notices from Century Aluminum and Rio Tinto Alcan, Big Rivers has been implementing its Load Concentration Mitigation plan. One aspect of the plan calls for Big Rivers to idle or reduce generation when the market price does not support the cost of generating. On May 24, 2013 Big Rivers submitted to MISO an Attachment Y, ‘Notification of Potential Generation/SCU Change of Status’ of its intent to idle all three units at Coleman Station effective September 1, 2013. MISO subsequently determined and notified Big Rivers that Coleman Station is needed for grid reliability, and must continue to remain available for operation as a System Support Resource (‘SSR’). Consequently, the Coleman Unit 1 outage that was scheduled from April 27 to May 25, 2013, has been deferred to September 2013, in order for Big Rivers to determine specifically what maintenance needs to be performed for the unit to continue operating until May 2014. The deferred outage (April 27 to May 25, 2013) provided Big Rivers the opportunity for an additional twenty-eight (28) days of generation at Coleman. For the added generation Big Rivers consumed approximately 40,500 additional tons of fuel over the original budgeted amount.”

Big Rivers also outlined bids from a February 2013 spot solicitation for 150,000 tons per quarter for the March 15-Dec. 31, 2013, period.

Foresight Coal – Within the Foresight Coal contract there is an option for additional tonnage. The option price for coal was compared to the bid alternatives and found to be a competitive option for coal supply, via barge, to Green and Wilson (shared supply). Foresight was notified pursuant to the terms of the coal supply agreement for delivery of the optional tons to Big Rivers.

Oxbow Carbon & Minerals – Within the Oxbow spot contract there was an option for additional tonnage. The option price for petroleum coke was compared to bid alternatives and found to be a competitive option for solid fuel supply (blending with coal) for Green and Wilson (shared supply). Oxbow was notified pursuant to the terms of the spot petroleum coke supply agreement for delivery of the optional tons to Big Rivers and an amendment was completed to confirm the optional tonnage within the spot contract.

Winn Energy LLC – Winn offered a small amount of tonnage for test purposes from its surface mining operation. The tonnage was accepted and contracted on a spot basis for test coal delivery to Green. Winn is seeking additional permitting of its coal reserves and has not had any additional available coal past the test volume.

Peabody Coalsales — Peabody Coalsales presented offers via truck and barge which were competitive for delivery and use at Green. The spot coal supply, via both modes of transportation, were selected and fulfilled the open position at Green for spot coal.

Alliance Coal – Not selected.

KenAmerican Resources — It provided a competitive bid offer of low cost, high quality, truck delivered fuel to Wilson with quality that would allow for blending with the option coal and petroleum coke mentioned above, creating an overall lower cost of fuel for Wilson. This fulfilled the spot coal requirements for Wilson.

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.