(The following article by Steve Raabe was posted on the Denver Post website on May 26.)
DENVER — Xcel Energy’s top energy- supply official said consumers have been forced to pay “tens of millions of dollars” in higher utility bills because of delays in railroad coal shipments.
In testimony Thursday before a U.S. Senate committee, David Wilks, Xcel’s Denver-based president of energy supply, and other utility officials said U.S. railroads’ coal- shipping delays are boosting consumers’ electricity bills as much as 10 percent as some utilities switch to higher-cost natural gas.
“It has become increasingly difficult to maintain adequate coal stockpiles,” Wilks said. “We have several plants that are struggling to maintain even 10 days of coal on the ground.”
Utilities typically seek to have at least 30 days of coal supplies on hand. Deliveries by BNSF Railway, formerly Burlington Northern Santa Fe; and Union Pacific Corp., the two biggest railroads, fell as much as 20 percent short of demand last year because of storms, weather-related derailments and maintenance. Much of the delivery shortfall was from Wyoming’s Powder River Basin.
Wilks, testifying on behalf of an energy-industry trade group, said replacement power nationally will cost at least an additional $2 billion this year to cover a coal shortfall of 20 million tons. Switching to natural gas boosts the cost of a kilowatt-hour of electricity to three times as much as the same power from coal, he said.
A railroad official said last year’s track problems are being addressed. “We are in anything but a crisis situation,” said Edward Hamberger, chief executive of the Association of American Railroads trade group.