Higher coal prices will put pressure on power--Ameren

Higher coal prices will put pressure on power--Ameren

Portland, Maine (Platts)--28Jul2005

The current slowdown in coal deliveries from Wyoming will push up coal and
coal-transportation costs in the next two years, which in turn will put
pressure on power prices, Ameren Corp officials told analysts Thursday.

Ameren, which buys 85% of its coal from the Powder River Basin, believes coal
and coal transportation costs will increase 3% to 5% in 2005, 5% to 10% in
2006 and 10% to 15% in 2007, said Gary Rainwater, Ameren's chairman, president
and CEO. There are a lot of indications that forward prices for power will be
solid, including high natural gas prices and rising coal prices, he said.
"It's reasonable to believe that future prices will be affected by coal," he
said. 

Ameren expects all its coal needs for 2006 will soon be hedged and is 90%
hedged for 2007, Rainwater said. Average power sale prices rose 27% in the
second quarter, averaging $38/MWh, up from $30/MWh in the same period last
year, the St. Louis, Missouri-based company said.

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