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'Retirements' will have limited impact on US coal producers

DECISIONS by Southern Company subsidiaries Alabama Power and Mississippi Power to retire coal units and convert others to gas will have a muted impact on US coal producers.

Lou Caruana

According to an SNL energy analysis of coal delivery data, this was because of the amount of imported coal the plants burned.

Throughout April 2014, Colombia supplied about 13.4% of the coal delivered to the Southern plants, with units slated to retire or be converted.

In a settlement with the Sierra Club, Mississippi Power on August 4 agreed to stop burning coal at its Jack Watson plant in Mississippi and Greene County plant in Alabama. Alabama Power, the co-owner of the Greene County plant, already announced that it planned to convert Greene County to burn natural gas starting in 2016, according to the SNL Energy data.

Alabama Power also will be retiring units 6 and 7 at the Gorgas plant, each at 125 megawat of nameplate capacity. Two units at Barry, each 153.1MW, will be modified to run on gas instead of coal. The 272MW unit 3 at Barry also will be converted to gas.

Barry exclusively burned Colombian coal supplied by the Drummond International LLC unit of Alabama-based Drummond Coal in 2013 and 2014, part of a surge in imports in the US as foreign coal becomes more competitive with Central Appalachian coal.

Gorgas and Greene County also took Colombian coal in 2014 as Southern increased its purchases from the South American country by nearly 500,000 tons in the first half of the year, a spokeswoman for the utility told SNL Energy.

Alabama thermal coal mines, part of Southern Appalachia, were hit hardest by the retirements based on 2014 deliveries.

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