(The Associated Press circulated the following article on April 3.)
CHATTANOOGA, Tenn. — The Tennessee Valley Authority says the railroads are contributing to the rising cost and falling supply of environmentally friendly low-sulfur coal from the West.
The nation’s largest public utility estimates it spent $80 million more last year on Wyoming coal because the railroads didn’t deliver on time to TVA’s power plants, forcing TVA to shop on the spot market.
“We were simply unable to get delivery of all of the coal we ordered, and we had to replace that coal with more expensive fuel,” said Jacky Preslar, TVA’s general manager of fuel supply. “The railroads tell us the situation is getting better, but I’m from Missouri, and I still want them to show me.”
Last May, heavy snow and rain caused two derailments on a key line used to ship low-sulfur Wyoming coal that supplies 45 percent of TVA’s fossil plants. Floods on some rail lines later in the year also disrupted shipments to TVA and other utilities.
But beyond those disruptions, caused by what the railroads say were unavoidable “acts of God,” utility leaders complain that rail capacity has not kept pace with demand.
Michael Morris, CEO of American Electric Power and chairman of the Edison Electric Institute, warned Congress recently that low coal stockpiles at power plants “are a direct result of the railroads’ inability to meet service obligations.”
“By overpromising services, railroads have put the electric industry in a potential crisis situation this winter and next summer,” Morris wrote in a letter to the Senate Commerce, Science and Transportation Committee in February.
The railroad industry is responding with a record investment this year of more than $8 billion in new track, equipment and other infrastructure, according to the Association of American Railroads – up 21 percent over last year.
For its part, Norfolk Southern Corp. is adding capacity to its rail lines that move Powder River Basin coal from Wyoming to the East. The railroad is adding double track and rail sidings along its route from Memphis to Macon, Ga., and is upgrading track on several routes in the Tennessee Valley, including routes from Sheffield, Ala., to Chattanooga and from Chattanooga to Atlanta, company spokeswoman Susan Terpay said.
“They are doing better and we are getting more coal now from the West,” TVA Senior Vice President Joe Bynum said. “But we’re also having to pay a lot more.”