AEP’s doomed Big Sandy coal plant turns in poor burn figures

The Kentucky Power unit of American Electric Power (NYSE: AEP), which runs the coal-fired Big Sandy power plant in eastern Kentucky, bought 464,889 tons of coal in the May-October 2013 period, all of it under contract and none off the spot market.

That is according to a twice-yearly fuel report the utility filed on Feb. 28 at the Kentucky Public Service Commission. The suppliers and tonnages were: Beech Fork Processing, 84,196 tons; Rhino Energy, 184,610 tons; S.M.& J., 87,892 tons; and Southern Coal Sales, 108,191 tons.

Kentucky Power burned 229,600 tons of coal at Big Sandy during the review period, but took delivery of a whopping 464,889 tons. That discrepancy between burn and deliveries is accounted for by the fact the two-unit plant ran at a capacity factor of only 11% during the period, which means the company had to take a lot of contract coal it couldn’t burn in the May-October 2013 period.

Notable is that the 800-MW Unit 2 at Big Sandy is due to be shut in 2015, and the 278-MW Unit 1 is due to be switched to natural gas in 2016, in both cases for clean-air reasons.

Details of each coal contract show that the Beech Fork deal was due to expire at the end of 2013 and called for 190,000 tons that year. The Rhino contract is due to expire at the end of June of this year, with 128,202 tons contracted for the first half of this year. The S.M.& J. contract was due to expire at the end of 2013 and called for 20,000 tons per month. And the Southern Coal Sales deal runs to the end of 2014 and calls for 41,667 tons per month in 2014.

Big Sandy’s coal inventory stood at 694,051 tons as of Oct. 31, 2013, which was 38 days above the 30-day target level. The utility said that the economic recession, plus a June 2013 unscheduled outage at the plant, were major factors leading to that excess inventory.

PJM Inteconnection on Feb. 18 released an updated list of pending deactivation requests. The latest on the list, and the only one filed so far this year, came in on Jan. 21 and covers the planned June 2015 deactivation of the 800-MW, coal-fired Unit 2 at Big Sandy.

The key components of Kentucky Power’s 2013 integrated resource plan (IRP), filed Dec. 23, 2013, at the Kentucky PSC, include the acquisition of 50% of the coal-fired Mitchell plant in West Virginia. The PSC approved the Mitchell buy earlier in 2013 as a replacement for a similar amount of capacity at Big Sandy Unit 2.

The major elements of the IRP are:

  • Transfer a 50% undivided ownership interest of the Mitchell Plant (780 MW) from affiliate Ohio Power Co. (OPCo) to Kentucky Power, to replace the 800-MW Big Sandy Unit 2 which is scheduled to retire in 2015;
  • Convert Big Sandy Unit 1 (278 MW) to burn natural gas instead of coal;
  • Continue to purchase 393 MW of power from the Rockport coal units in Indiana;
  • Make increased investment in demand-side management; and
  • Purchase the output of the 58.5-MW ecoPower Hazard LLC biomass plant starting in 2017.

Kentucky Power on Dec. 6, 2013, applied at the Kentucky PSC for an approval to convert Unit 1 at the Big Sandy plant from a coal-fired unit to a natural gas-fired facility. The company says it can complete the conversion by May 2016.

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.