AEP / Coal / Duke Energy / Energy

Utilities give coal the heave-ho

Power plants abandon longtime staple for generating electricity as price of natural gas plummets

Coal consumption fell 9.4% in the fourth quarter from a year earlier as power generators sought cheaper fuel. Above, a Virginia mining operation.

NEW YORK, NY — “U.S. electric utilities are renegotiating coal contracts and finding other ways to reduce coal deliveries as a mild winter and competition from less-expensive natural gas combine to weaken demand for power plants’ longtime staple fuel.

Coal consumption by power generators fell 18.8% in the fourth quarter from the preceding quarter and 9.4% from the fourth quarter of 2010, the Energy Information Administration said last week.

The agency hasn’t calculated first-quarter coal use yet. But utilities have indicated that they are shifting power production to natural gas, the price of which recently dipped below $2 per million British thermal units, roughly half what it was a year ago.”

— Rebecca Smith, Wall Street Journal

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