American Electric Power Co., meanwhile, has retained Morgan Stanley & Co. to evaluate the possible sale of its AEP subsidiary that operates river barges that serve the major U.S. electric utility’s competitive power plants.

Gary Quinn, vice president of sales for Madisonville, Kentucky-based Southern Coal Handling, said coal trains were being unloaded in March at Four Rivers, located near Paducah at Ohio River mile marker 943. While Quinn did not disclose how much coal was being loaded onto barges at the terminal, he said coal was coming from both the high-sulfur Illinois Basin, in which western Kentucky is located, and the low-sulfur Powder River Basin.

Four Rivers has an annual throughput capacity of more than 10 million tons. SCH believes the terminal is strategically situated to barge coal to electric utility customers along the Ohio River or down the Mississippi River to the Gulf of Mexico where it can be loaded onto ocean-going vessels for the journey overseas.
This summer, the company plans to add stockpiling capacity at the terminal. Currently, all coal has to be transloaded from rail to barge.

The terminal project encountered some opposition when it was proposed for a different location along the river near Paducah. But in 2012, SCH acquired 230 acres of land already zoned industrial from Paducah Economic Development, the economic development agency for Paducah and surrounding McCracken County.

SCH also operates the Calvert City Terminal on the Tennessee River in western Kentucky and the Pride Terminal on the Tennessee River near Tuscumbia, Alabama. Calvert has an annual throughput of 12 million tons and Pride has about 10 million tons.

AEP said in March it hopes to complete the review of potential alternatives for its AEP River Operations LLC subsidiary “as promptly as practicable.” There are no assurances that any particular alternative will be pursued or that any transaction will result from Morgan Stanley’s evaluation, it added.

River Operations delivers bulk commodities including coal, grain, steel, ores and other products, using a fleet of 58 towboats, 2,269 barges and employing nearly 1,100 people. It delivers about 45 million tons of products annually, including some 10 million tons of coal, to AEP’s unregulated power plants mostly along the Ohio River.

However, AEP said the review does not include its “captive business” that hauls coal to the Columbus, Ohio-based company’s regulated power plants. Cook Coal Terminal at Metropolis, Illinois, is part of that business, as are operations in Paducah and in Convent, Algiers and Belle Chase, Louisiana. River Operations is headquartered in Chesterfield, Missouri, a St. Louis suburb.

The captive business delivers about 21 million tons of coal annually, using 12 towboats, 509 barges and with 250 employees.