Including both its regulated and competitive coal fleets, the Columbus, Ohio-based utility company consumed about 66.5 million tons of bituminous coal and lignite in 2010, 65 million tons in 2011 and 57.1 million tons in 2012, before dipping to 56 million tons in 2013.
AEP said in November its regulated coal plants are projected to burn about 40 million tons in 2014, with an additional 16 million tons by its competitive coal fleet. Of the 2014 coal for the regulated plants, 76% had been contracted as of November, with 51% contracted for in 2015. On the competitive side, 95% of AEP’s 2014 coal purchases already were committed in November. AEP estimated it paid an average delivered price of $48/ton for its regulated coal in 2013. That included an average of $59/ton for coal for its eastern power plants and $37/ton for coal for its western plants.
AEP’s projected regulated delivered coal price for 2014 is expected to average $45/ton, down about $3/ton from this year. That average price for the eastern plants is estimated at $54/ton, compared with $37/ton for the western plants.
\pOn the regulated side, 58% of the coal bought by AEP in 2014 is expected to come from the low-sulfur Powder River Basin (PRB), versus 16% from northern Appalachia, 14% from central Appalachia and 12% from lignite producers. For the competitive fleet, 74% of the coal will come from northern Appalachia, 12% each from the high-sulfur Illinois Basin and central Appalachia, and the remaining 2% from the PRB.
By far, AEP’s Ohio Power subsidiary is the largest coal consumer. From 2010 through 2012, Ohio Power went through an average of 22.1 million tons a year, though yearly figures fell from 25.2 million tons in 2010 to 18.6 million tons in 2012.
Largely because of new U.S. Environmental Protection Agency regulations, AEP plans to retire about 7,000 megawatt of older coal capacity over the next few years. No coal units are scheduled to be shuttered in 2014, however.