Louisville, Kentucky (Platts)--14Aug2014/532 pm EDT/2132 GMT

In the nick of time, a railroad has agreed to step up coal deliveries to Dairyland Power Cooperative's 379-MW Genoa No. 3 baseload power plant in southwestern Wisconsin, likely allowing the facility to avoid a threatened idling this winter and utility a descent into uncharted reliability waters.

The La Crosse, Wisconsin-based generation and transmission co-op warned in late July that a rail backlog that has persisted across much of the Upper Midwest this year could leave Genoa short of coal, forcing it to close in January, in the middle of a typically frigid Wisconsin winter.

Responding to calls from state and federal officials on behalf of Dairyland, BNSF Railway has agreed to accelerate its shipments of low-sulfur Powder River Basin coal to allow the plant to replenish its stockpiles well before the advent of winter, Dairyland spokeswoman Deb Mirasola said Thursday.

"The deliveries are starting to increase," Mirasola said. "We're certainly pleased they're working with us to increase the frequency of rail deliveries. It's a positive development."

US Representative Ron Kind, Democrat-Wisconsin, was among those who petitioned the US Surface Transportation Board to resolve the coal delivery impasse at Genoa.

In a statement, Kind praised BNSF for making a commitment "to ship enough coal to give customers some peace of mind as winter approaches. Adequate coal supplies will help keep energy prices low and ensure that Dairyland Power Cooperative can fully power our communities."

While she declined to comment specifically on Dairyland's situation, BNSF spokeswoman Roxanne Butler said the railroad "has been working with our freight customers on an individual basis to address their most critical service issues while we continue to execute our short and long-term effort to improve service across our network."

Unlike Dairyland's other power plants, Genoa is solely a barge-delivered plant. Typically, coal is transported by BNSF to an Iowa terminal and then loaded onto barges for the trip on the upper Mississippi River to Genoa.

But until late, not enough PRB coal has been reaching the terminal. Because the barge season on the upper Mississippi usually ends in early fall, Dairyland likes to have sufficient coal stored at Genoa by now to last out the long Wisconsin winter.

The added rail shipments are easing Dairyland's fears about a possible shutdown of Genoa in a few months.

"If this increased pace continues uninterrupted during the barge season, we should be able to build our inventories for the winter" at Genoa, Mirasola said.

"We have to stockpile all of our coal for the entire winter by the end of October. At the end of the barge season, we usually have between 165 to 195 days of coal to last through the winter," she added.

She declined to disclose the current level of Genoa's stockpiles.

The co-op has grappled with coal transportation shortages at other plants during the past eight or nine months.

Early this year, Dairyland trucked PRB coal to its 400-MW John P. Madgett baseload plant near Alma, Wisconsin, because rail delivery was not available.

About 30 trucks a day made the 75-mile trek hauling coal from a stockpile at Genoa for nearly a month.

At the time, BNSF said it had encountered weather-related delays in getting the coal to Madgett.

Mirasola said the utility still plans to keep an eye on the weather in the coming months. "Let's hope we don't get another polar vortex," she said.

Dairyland currently has about 1,370 MW of nameplate generation capacity. It provides electricity to about 600,000 people.

--Bob Matyi, newsdesk@platts.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com

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