EKPC reports latest coal buying details to the Kentucky PSC

East Kentucky Power Cooperative‘s aggregate coal inventory level as of Oct. 31, 2015, was 1,170,442 tons which is 53 days of supply, the cooperative said in a Feb. 19 fuel adjustment clause filing with the Kentucky Public Service Commission.

By power station the coal inventory levels as of Oct. 31 were as follows:

  • Dale, 11,324 tons, five days of supply;
  • Cooper, 235,628 tons, 65 days;
  • Spurlock, 923,490 tons, 57 days.

Number of days of supply is determined by actual tons in inventory divided by the total maximum daily usage for East Kentucky’s generating units. East Kentucky’s aggregate coal inventory as of October 31, 2015, exceeded its target range of 25-50 days’ supply by three days.

  • The Dale Power Station inventory was lower than its target range of 25-40 days’ supply by 20 days. The final units of the 196-MW (net) plant are being deactivated in April of this year due to the federal Mercury and Air Toxics Standards. During the May-October 2015 fuel review period, the Dale station only burned coal in August (3,239 tons of burn).
  • The Cooper Power Station inventory exceeded its target range of 40-60 days’ supply by five days.
  • The Spurlock Power Station exceeded its range of 25-45 days’ supply by 12 days.

The Spurlock inventory exceeded its target by more than the ten days, which is a threshold amount where the PSC wants more information, due to lower than projected usage and the receipt of already committed deliveries. As of Jan. 31, 2016, Spurlock had reduced its inventory to a level where it exceeded the target days’ supply by eight days. Spurlock’s coal inventory is projected to be within the target range by the third quarter of 2016.

The company noted one piece of litigation with a coal supplier, which is part of the bankruptcy and dissolution several years ago of Appalachian Fuels LLC, founded by the late coal operator Larry Addington. Said the cooperative about the latest developments in litigation that has gone on for years over missed contract coal deliveries by Appalachian Fuels: “On April 22, 2015, the Bankruptcy Court entered the Agreed Order in the Appalachian Bankruptcy whereby East Kentucky has an allowed general unsecured claim in the amount of $18,000,000 and will receive distributions on that amount at such time that the Trustee makes distributions to allowed general unsecured claimholders. Ultimately, East Kentucky will receive a pro rata share of all distribution to unsecured creditors, but the actual amount of recovery is unknown. To date, no distributions have been made to East Kentucky.”

The filing lists basic information about coal contracts in place, including contracts with B&W Resources, Oxford Mining, Bowie Refined Coal, White County Coal and Alliance Coal. The most recent of the contracts, both signed in November 2015, are with:

  • B&N Coal, sourced from various mines in Ohio, two-year deal, calls for 10,000 tons in rest of 2016, then 110,000 tons in 2017 and 120,000 tons in 2018, base contract price is $37/ton; and
  • Foresight Coal Sales, various mines in Illinois, three-year deal, calls for 10,000 tons in rest of 2016, then 110,000 tons in 2017, and 120,000 tons in each of 2017 and 2018, base price is $37.43/ton.
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.