Coal Age

DEC 2018

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Page 17 of 59

16 December 2018 news continued coal delivered and therefore, FG will pay a different set price per ton for the remaining tons of coal delivered" under the new deal. If the judge does not approve the set- tlement agreement by December 31, then among other things, the new agreement would be voided and FES/FG-Murray would return to their previous legal positions. A spokesman for FES/FG declined to comment on the court filing, as did a Mur- ray Energy spokesman. AEP Buys Coal, Burns 22M Tons of Coal Through 3Q American Electric Power (AEP) began receiving spot steam coal in the fourth quarter of 2018 as a result of a swift turn- around of a November 1 formal solicita- tion to buy some spot this year and up to 1.25 million tons per year (tpy) of term coal for up to three years, or up to 3.75 million tons, beginning in 2019. The Columbus, Ohio-based company confirmed in November it purchased an unspecified amount of spot coal for late this year but expected shipments of term coal to arrive at its power plants after the first of the year, according to a company spokes- man. AEP declined to identify the winning bidder(s) or disclose the amount of coal it is buying and the price it is paying for the coal. The company also confirmed it bought an unspecified amount of barge coal off an August 2 request for proposals for as much as 23.2 million tons through 2021 for its regulated power plants. AEP in November was on track to ap- proach or meet its projected coal burn of approximately 33 million tons in 2018 af- ter consuming just over 22 million tons in its regulated power plants during the first nine months of this year, a spokesman said. AEP's total coal burn for 2018 stood at 22.23 million tons through September. The company said in early 2018 it ex- pected to burn around 33 million tons in its regulated plants this year. The compa- ny does not release coal burn figures for its competitive operations. AEP averaged about 7.3 million tons of coal consump- tion per quarter through the first three quarters of 2018. At that rate during the fourth quarter, the company could fall just a bit short of meeting the 33-mil- lion-ton figure, although colder weather in November and December boosting electricity demand could lead to more coal use. AEP has not yet released its coal burn projections for 2019. During the past few years, AEP has retired in excess of 7,000 megawatts of coal-fired generating capacity and is ex- pected to close several more coal plants in the coming years. It plans to shutter its 1,590-megawatt Conesville power plant in Ohio by May 31, 2020, two years earlier than previously planned. Conesville, once an AEP workhorse, has struggled to clear PJM Interconnection capacity power auc- tions and AEP has been unable to find a buyer for the plant. PJM is a regional grid operator based in Pennsylvania. Owensboro Utilities Details Coal Delivery Plans for Elmer Smith The city-owned electric utility in Owens- boro, Kentucky, is starting to wind down its coal supply agreements in anticipation of the planned closing of its 425-megawatt Elmer Smith coal-burning generating sta- tion in less than two years. Owensboro Municipal Utilities, which has operated the Smith plant for more than half a century along the Ohio River just east of the Daviess County city, is un- likely to purchase new coal supplies once its existing contracts run out over the next year or so, according to James Roberts, OMU fuels and byproducts manager. Complicating the planned fuel supply winddown is a force majeure OMU im- posed on its coal suppliers in 2016 when it was attempting to lower Smith's steam coal stockpile to align with reduced burns at the plant. The force majeure continued in 2017 and into 2018 and essentially resulted in the muni accepting only about 80% of the agreed to tonnages from its suppliers. Until earlier this year, OMU officials had planned to keep operating at least one unit at Smith until 2023. But the muni's board of directors ultimately settled on a plan to retire 180-megawatt Unit 1 at Smith on or slightly after June 1, 2019, to be fol- lowed by the shutdown of 240-megawatt Unit 2 around June 1, 2020. OMU expects to rely on renewable energy resources and natural gas to replace the coal generation. Roberts said the muni's existing coal supply contracts with Western Kentucky Minerals and Sun Energy will allow for be- tween 400,000 and 600,000 tons of coal to be delivered in 2019. Current coal supply deals with Pea- body Energy, KenAmerican Resources and Western Kentucky Consolidated Re- sources are scheduled to expire at the end of this year. KenAmerican, operator of an underground coal mine in western Ken- tucky, and Western Kentucky Consolidat- ed Resources are subsidiaries of St. Clairs- ville, Ohio-based Murray Energy Corp., the largest privately owned coal company in the U.S. Western Kentucky Consolidated Resources is comprised of several western Kentucky mines formerly owned by Arm- strong Energy. St. Louis-based Armstrong was acquired by Murray about a year ago. Roberts said Peabody, KenAmerican and Western Kentucky Consolidated Re- c a l e n d a r o f e v e n t s Janaury 27-30, 2019: 45 th Annual Conference on Explosives and Blast- ing Techniques, Nashville, Tennessee. Contact: Web: January 31-February 1, 2019: 19 th Coaltrans USA, Miami, Florida. Contact: February 24-27, 2019: SME Annual Conference & Expo, Denver, Colorado. Contact: Web: March 10-13, 2019: Haulage & Loading, Hilton El Conquistador Re- sort, Tucson, Arizona. Contact: Web: April 8-14, 2019: bauma, Messe Muenchen, Munich, Germany. Contact: Web: April 12-13, 2019: SME/Central Appalachian Section Spring Meeting, Marriott Grin Gate Resort, Lexington, Kentucky. Contact: Geaunita Caylor, Email:; Tel: 859-494-1621. May 20-22, 2019: Longwall USA, David L. Lawrence Convention Center, Pittsburgh, Pennsylvania. Contact: Web: November 13-15, 2019: XIX International Coap Preparation Congress & Expo 2019, New Delhi, India. Contact: Web: News Continued on Page 38

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