Southwest US coal burn falls in July

OREANDA-NEWS. July 20, 2015. Electricity output from coal-fired power plants operated by major southwest utilities fell by 6pc in the first half of this month while natural gas generation increased by a similar margin.

Output by southwest coal plants on 1-15 July averaged 5,666MW in the Southwest Variable Energy Resource Initiative members' territories, which cover most of Arizona and New Mexico and parts of neighboring states. Coal accounted for 39pc of total generation, down from a 41pc share in the same period last year.

Gas share increased to 32pc from 30pc while nuclear output was flat at 21pc of the total.

Total generation fell by 1pc year over year even though load was 1.3pc higher on higher-than-normal temperatures, as utilities increased external purchases.

Powder River basin (PRB) accounts for the bulk of external supply for the power plants in the region although many utilities there operate mine-mouth power plants. Prompt-quarter delivered PRB prices in the past month were 6pc lower than a year earlier.

The month-to-date average of spot natural gas prices is down by 40pc on the year, even though strong cooling demand and pipeline delivery constraints in California at the start of July boosted southwest natural gas prices above \\$3/mmBtu.

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.

Coal-fired generation in those utilities adds up to more than 11GW. About 1GW of that capacity will retire in 2016-17, according to Argus' power plant retirement database.