AEP says 2014 coal burn to be 10-15% higher than expected

09:24 PM @ Friday - 13 June, 2014
American Electric Power expects its coal burn to be 10-15% higher in 2014 than previous projections of about 55 million st, a spokeswoman said Tuesday.

If so, that means the Columbus, Ohio-based utility would burn an additional 5.5 million st to 8 million st of steam coal in 2014.

With 2014 nearly half over, "we expect our coal burn in 2014 to be about 10-15% higher than our 2013 burn of 55 million" st, Tammy Ridout, the spokeswoman, said in an email. Earlier this year, AEP said it expected its 2014 coal burn would mirror last year's.

According to Ridout, the increased coal burn so far this year is largely due to colder-than-normal weather during winter months. Unusually frigid temperatures persisted through most of the first quarter in much of AEP's service territory in the eastern US.

The cold weather caused power prices to spike, and they have continued to trend upward.

"If power prices remain strong, we expect our coal burn to continue at a higher pace than last year," Ridout added.

On June 6, AEP issued a solicitation for proposals of up to 500,000 st of coal, FOB barge, for delivery in July through December. The company is also looking for spot offers of up to 500,000 st of coal, FOB barge, for calendar year 2015.

AEP owns about 38,000 MW of generation capacity, of which about 23,000 MW is coal-fired. However, the company plans to retire more than 6,000 MW of coal-fired generation over the next few years, mainly in its native Midwest, to comply with new US Environmental Protection Agency rules.

AEP's coal burn has slowly declined over the past decade. The company once consumed in excess of 70 million st annually, but that figure dropped to 57.1 million st by 2012 and 55 million st in 2013.

AEP has not said what impact, if any, the EPA's newly unveiled greenhouse gas emissions rule will have on its coal fleet.
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