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AEP buys PRB coal off recent solicitation

American Electric Power Co. Inc. has purchased roughly 2.3 million tons of low-sulfur Powder River Basin coal for the latter half of this year, Chuck West, the company's manager of coal procurement, said June 7.

West, in an interview, declined to reveal the number of supply contracts awarded by his Columbus, Ohio-based company, or identify the recipients. But he confirmed AEP essentially procured all of the coal it sought under a formal mid-May solicitation that closed May 24.

Rail deliveries are scheduled to start in July and wrap up in December. The coal will be sent to power plants operated by AEP's Indiana Michigan Power Co. and Southwestern Electric Power Co. subsidiaries.

West also said AEP may need to buy some additional coal later this year depending on the summer burn at the company's baseload coal plants in several states. West said he is "pulling for a hot summer" that would increase the burn.

Most of the 11 states where AEP operates are forecast to experience hotter-than-normal temperatures this summer.

Meanwhile, Kimberly Chilcote, AEP fuel and consumables manager, said in an interview she is still reviewing high-sulfur thermal coal bids received last month in a separate solicitation for the 1,880-MW Cardinal competitive plant on the Ohio River near Brilliant, Ohio. That solicitation closed on May 18. Cardinal is co-owned by AEP and Buckeye Power Inc., a generation and transmission co-op in Columbus that is negotiating to acquire all of the baseload plant.

AEP requested an unspecified amount of coal for Cardinal starting in the first quarter of 2018 for up to three years.

AEP expects to burn around 33 million tons of thermal coal in its regulated plants in 2017, up from 30 million tons in 2016. It does not publicly disclose the coal burn for its competitive plants, but it is thought to be less than 10 million tons annually.