trending Market Intelligence /marketintelligence/en/news-insights/trending/vSi-MVYglpMuF8_000B_rw2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Peabody expected to be key coal supplier to Indiana Michigan's Rockport plant

Q3: U.S. Solar and Wind Power by the Numbers

Path to Carbon-Free Power Generation by 2035

The Growing Importance of Data Centers for European & U.S. Renewable Projects

CAISO and ERCOT Power Forecasts by the Hour


Peabody expected to be key coal supplier to Indiana Michigan's Rockport plant

Peabody Coal Sales is expected to be the primary supplier of sub-bituminous coal, including through a new sales agreement, to Indiana Michigan Power Co.'s, or I&M's, 2,600-MW Rockport power plant in Spencer County, Ind., during the six months starting Oct. 1, according to a new regulatory filing.

Charles West, manager of coal procurement for Columbus, Ohio-based American Electric Power Co. Inc., I&M's parent company, told the Indiana Utility Regulatory Commission last week that coal will be supplied to Rockport under three Peabody agreements during the six-month period running through March 2018. Peabody Coal Sales is a subsidiary of Peabody Energy Corp.

The first agreement, for approximately 1 million tons, has been in place for several years and will expire at the end of 2017, West said.

The second is a new agreement for 3 million tons for one year and the third is a right-of-first-refusal agreement for 500,000 tons, he added.

Rockport's remaining sub-bituminous coal supply deals for the October-through-March period are with Arch Coal Sales Company Inc. for 500,000 tons and 300,000 tons, he said.

Alpha Coal Sales Co. LLC also has two contracts to supply a total of 310,000 tons of bituminous coal before the end of this year to Rockport, I&M's only remaining coal plant.

In addition, Southeastern Land LLC will supply 245,000 tons in 2017 and Ember Energy LLC about 108,000 tons of bituminous coal, he said.

West said I&M expects to pay a weighted average delivered cost of $43.25/ton, or 233.75 cents/MMBtu, for Rockport coal during the period. That is forecast to include an f.o.b. mine cost of $17.89/ton and a transportation cost of $25.36/ton.

Additional coal requirements not already committed will be purchased, as necessary, to fulfill any remaining supply requirements at Rockport, West said.

From Dec. 1, 2016, through May 31, I&M paid an overall weighted average delivered cost of $41/ton, or 225.98 cents/MMBtu, for Rockport coal, West said.

That was approximately 5.9% less than I&M's original projected cost of $43.29/ton, or 240.21 cents/MMBtu.

The actual cost was lower, West explained, because of lower barge, rail and transload rates "along with a significantly lower percentage of the higher-priced East coal that was delivered" during the period.

Since late 2016, Central Appalachian coal prices have stabilized at about $55/ton, while Powder River Basin coal prices dropped slightly in early 2017 after rebounding in late 2016, West said.

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.