East Kentucky Power Co-Op reduces coal delivery schedule on four contracts

Houston — East Kentucky Power Cooperative reduced its monthly delivery amounts on four barge coal contracts from two suppliers by 20%, or a combined 16,000 st/month, according to regulatory filings made public Feb. 12.

The Winchester, Kentucky-based utility said it will reduce the amount of coal to be delivered to its Gilbert and Spurlock power plants from Feb. 1 through July 31, according to filings the Kentucky Public Service Commission published.

Under the contracts with its suppliers, EKPC has the right to increase or decrease its base monthly delivery amount by 20%.

EKPC reduced its deliveries by a combined 12,000 st/month from Alliance Coal on three contracts. The coal producer will now ship 16,000 st/month on each of its three contracts, down 20% from the original deals.

In 2018, the two parties signed a pair of three-year barge coal contracts that started Jan. 1, 2019, for 240,000 st/year in 2021 at a base price of $1.826/MMBtu ($42/st for 11,500 Btu/lb coal).

The third contract was originally signed in December for a two-year supply deal that started Jan. 1 for 240,000 st/year. The base price was $36/st for 11,450 Btu/lb coal.

EKPC also reduced its supply contract with Alpha Metallurgical Resources — formerly Contura Energy — by 4,000 st/month, or 20%, to a new delivery rate of 16,000 st/month.

The companies originally signed a three-year barge coal deal for deliveries between 2018 and 2020 before extending the contract in July by two years to include 240,000 st/year in 2021 and 2022. Base price for the 13,000 Btu/lb coal in 2021 was $38/st and $40/st in 2022.

From January through November, EKPC's Spurlock Station took delivery of 2.7 million st of 11,642 Btu/lb coal from 10 companies at an average delivered price of $41.95/st, according to US Energy Information Administration data.

Alliance delivered 672,032 st of 11,693 Btu/lb coal to Spurlock through November at an average delivered price of $45.31/st, while 233,771 st of 12,975 Btu/lb coal came from Contura at $46.92/st.