OREANDA-NEWS. Coal burn by major utilities in the southwest US was slightly higher in May than a year earlier as the fuel gained share in the supply mix as moderate weather pushed gas generation lower.

Coal-fired generation in the Southwest Variable Energy Resource Initiative members' territories, which cover most of Arizona and New Mexico and parts of neighboring states, averaged 4,687MW in May, up by about 1pc on the year. Coal's share in the generating mix rose to 44pc from 42pc. Natural gas' share in generation fell to 18pc from 20pc.

Moderate weather in May has kept electricity demand below year-earlier levels. Arizona cooling degree days — a measure of cooling demand — in the three weeks ended on 30 May were about half of normal, according to the National Weather Service.

Load in the southwest utilities' territory in the second half of May was 11pc lower year over year while total generation was 10pc lower.

Federal meteorologists in a month-ahead outlook issued yesterday predicted warmer-than-normal weather in June in parts of Arizona while New Mexico likely will have lower-than-average temperatures.

Powder River Basin coal delivered prices for the second quarter were 2pc lower than a year earlier. But falling power prices have narrowed the marginal profitability of coal-fired power plants.

Coal is the primary generating fuel in the region but gas typically sets prices more often, on the margin. Wholesale power prices at key southwest hubs in May fell by 43pc year over year, in line with declines in natural gas prices.

Installed generation in the eight-utility region met 92pc of the load, up from 91pc in May 2014.

The Southwest Variable Energy Resource Initiative aggregates load and generation data from eight utilities: Arizona's Generation and Transmission Cooperatives, Arizona Public Service, El Paso Electric, California's Imperial Irrigation District, Public Service of New Mexico, Salt River Project, Tucson Electric Power and the Western Area Power Administration's desert southwest region.