Xcel Likely to Boost Fuel Costs
Posted on: Saturday, 23 July 2005, 00:00 CDT
Jul. 23--Disruptions in coal delivery from the Powder River Basin of Wyoming likely will cause an increase in fuel costs for Xcel Energy customers.
Xcel Energy notified commercial and industrial customers in a letter Wednesday to expect the jump, though the amount of the increase is unknown.
The company said deliveries to Amarillo and Muleshoe power plants have been slowed or curtailed because of weather-related problems on the Burlington Northern Santa Fe line that serves mines in the coal-rich Powder River Basin.
The basin is in eastern Wyoming and southern Montana.
BNSF began issuing service advisories in May after severe storms and two derailments delayed service from coal mines in the area. BNSF, which operates the 127-mile line jointly with Union Pacific, promised to repair the rail bed. Maintenance is expected to be completed this fall.
"All through this, coal has been loaded, and coal has been delivered to customers," said Pat Hiatte, spokesman for BNSF in Fort Worth.
Bill Crenshaw, Xcel Energy spokesman, said the company will have to rely more on higher priced natural gas when coal supplies are down.
He would not say how many days coal supply is available to the company.
"Inventories of stored coal at our plants are reduced and may continue to diminish," Crenshaw said.
Just how much Xcel Energy customers will see their bills go up is unclear, Crenshaw said.
Base prices for commercial and industrial customers are lower than residential prices, he said, but the commercial customer will see a larger proportional increase because of using more power, he said.
"Our initial projected wholesale fuel cost adjustment factor in Texas for July would be 4.1 cents per kwh (kilowatt hour). Because of the constraints on our coal units, we later projected that the wholesale fuel cost adjustment might increase to 4.8 cents per kwh. Now we think that projection will come down some," Crenshaw said.
Xcel Energy is trying to purchase coal from other sources and electricity from other suppliers to keep down prices. Meteorologists are predicting daytime temperatures approaching 100 degrees for at least the next week.
Xcel is running coal-fired plants less than usual to conserve coal, Crenshaw said.
"That will allow us to generate from coal and natural gas during all of the foreseeable hot, dry afternoons this summer, when customers demand the most electricity," he said.
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XEL, BNI,
Source: Amarillo Globe-News
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