Coal stocks have rebounded above last year's levels, FERC says

Coal stocks have rebounded above last year's levels, FERC says

Washington (Platts)--22May2006

Coal stockpiles at power plants have grown in recent months, according to a
Federal Energy Regulatory Commission official.

Coal stockpiles for power generation "are well above last year's levels,"
Stephen Harvey, director of FERC's Division of Energy Market Oversight, told
commissioners during their meeting Thursday. Stockpiles "appear to have
relieved some reliability concerns" and are "likely to continue building."

In his summer energy market assessment, Harvey said coal stockpiles for
electricity generation have faced some stress over the past few years.

Currently, stockpiles reported by the Energy Information Agency remain below
their five-year average for the first quarter, "but are well above last year's
levels and may have reached, at the end of April, levels above those in 2004."

Railroad disruptions and strong coal demand for generation in the face of high
natural gas prices have driven lower stockpile levels for the past few years.
"While worth watching, staff's view is that coal stockpiles are likely to
continue building," Harvey said.

Earlier this month, electricity trade groups asked FERC to look into railroad
coal-delivery problems. The American Public Power Association, the National
Rural Electric Cooperative Association and the Edison Electric Institute
called on FERC to hold a public workshop to sort out the problems.

Rail delivery problems pose "a serious challenge to overall reliability of the
interstate power grid in regions of the country heavily dependent on
coal-fired generation," the groups said.

While the Energy Policy Act of 2005 gave FERC reliability oversight, the
Surface Transportation Board regulates railroad rates and services.

"The [STB Office of Compliance and Enforcement has] not heard from any
utilities about their coal service" since January 1, STB spokesman Dennis
Watson told Platts on Friday.

All STB complaints are filed through that office.

FERC has the letter under review, FERC spokesman Bryan Lee told Platts.

"The chairman has contacted his counterpart at the STB and discussed the
matter," Lee said. STB Chairman W. Douglas Buttrey "said there is the
opportunity to file a complaint with the STB, but there are no pending
complaints before them."

-- Mark E. Heckathorn, mark_heckathorn@platts.com

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