View Full Version : Railroads struggle to deliver coal to utilities

03-15-2006, 09:36 PM
A WSJ story available on the Pittsburgh
Post Gazette website:

"During the past 10 months, Arkansas Electric Cooperative Corp. has been forced to do things that power generators hate to do: It cut electricity production at plants that are the cheapest to operate and ran its costliest units harder than ever. At times, it even bought electricity on the open market at top prices.

"The electricity co-op made these moves because it is afraid of running out of coal. That's surprising in a country with such vast domestic reserves that some dub it the "Saudi Arabia of coal." But Arkansas Electric has a problem that is a growing concern for many U.S. utilities: It can't get enough coal to run its power plants because the trains that serve as its supply line aren't running on time. Delays in coal shipments to the Arkansas generator began last May with rail disruptions in Wyoming and forced the utility to burn more natural gas, lifting its 2005 power-generation costs by 21 percent, or $100 million."



03-15-2006, 10:22 PM
It's the old saying, "follow the money."
Rails are handling unprecedented traffic volumes and are raising rates due to demand. At the same time a number of electric utilities have switched from higher-priced natural gas to coal. Coal shipments out of the Power River Basin in 2005 are several percentage points higher than last year despite the well-publicized track maintenance issues early on last year. By complaining loudly enough the utilities might get the Surface Transportation Board to look into economic re-regulation. Coal rates (adjusted for inflation) have declined significantly in the past 20 years.

03-16-2006, 12:55 AM
Very informative article-thanks for the link.