Kentucky Power lately burns much more coal than it bought

The Kentucky Power unit of American Electric Power (NYSE: AEP) purchased 597,152 tons of coal during the November 2012-April 2013 period, with the biggest supplier being Rhino Energy.

Those are among the facts that the utility filed Aug. 29 at the Kentucky Public Service Commission in a half-year fuel review case. The utility’s coal plant is Big Sandy, which is due to end coal use in a couple of years due to clean-air needs. The plant had a capacity factor of 43% during the period.

The coal suppliers during the November 2012-April 2013 period were all under contract, with no spot coal taken. The suppliers were:

  • Arch Coal Sales, 22,842 tons;
  • Argus Energy, 59,726 tons;
  • Beech Fork Processing, 65,780 tons;
  • Rhino Energy, 248,622 tons;
  • S.M.& J., 124,898 tons; and
  • Southern Coal Sales, 75,285 tons.

The coal burn during the six-month period was much higher than the coal purchases, with a burn of 835,538 tons.

As of April 30, Kentucky Power had 458,762 tons in coal inventory, or 45 days of supply, which was 15 days over target. The utility said its coal burn has been hurt by the economic downturn and that its bloated coal inventory is due to a need to honor contractual commitments with coal suppliers.

The filing lists all coal contracts in effect during the review period, with all but the Southern Coal Sales contract to expire by the end of this year. The Southern Coal Sales deal stretches to the end of 2014, and calls for 41,667 tons per month for the contract period. The Arch Coal Sales and Argus Energy deals expired at the end of 2012, and the Beech Fork (190,000 tons contracted in 2013), Rhino Energy (480,000 tons in 2013) and S.M.& J. (20,000 tons/month in 2013) deals are to expire at the end of 2013.

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.