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DTE to buy 2.5 million tons of low-sulfur coal in 2018 under new deal

DTE Energy Co. entered into a new three-year coal purchase arrangement under which Michigan's largest electric utility will buy 2.5 million tons of low-sulfur Western coal in 2018, according to a regulatory filing.

Detroit-based DTE Energy did not identify the seller in its filing with the Michigan Public Service Commission. Neither did DTE spokeswoman Renee McClelland in an Oct. 5 interview.

Under the deal, coal deliveries are scheduled to start Jan. 1 and end Dec. 31, 2020.

McClelland said her utility will not necessarily buy 2.5 million tons from the seller in both 2019 and 2020, but declined to elaborate.

In the PSC filing, DTE said it intends to buy in excess of 9 million tons of coal under five separate contracts in 2018. Four of the agreements are for low-sulfur Western coal, presumably from the Powder River Basin. The lone exception is for 1.025 million tons of high-sulfur Eastern coal under a deal that began in December 2014 and is set to expire at the end of 2018.

DTE also told the commission that its 3,000-MW Monroe coal-fired plant on the western shore of Lake Erie is forecast to generate from 15.5 MWh per year to 15.8 MWh per year through 2022, easily making it the utility's largest generator.

DTE also operates four other coal-fired plants: the 1,034-MW Belle River, 1,258-MW St. Clair, 485-MW Trenton Channel and 280-MW River Rouge.

In May, DTE announced plans to halt all coal-fired generation by 2040 and reduce carbon dioxide emissions by more than 80% from 2005 levels by 2050.

Bob Matyi is a contributing reporter to S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.