Hotter weather and higher natural gas prices have helped increase coal consumption for power generation to near a year-high mark.

Coal consumption last week topped 16.5 million st, a weekly volume eclipsed only once this year when 17.1 million st was burned the week ending January 21, according to Bentek Energy, a unit of S&P Global Platts.

The climb in coal consumption began in late May as the Henry Hub prompt-month gas futures contract began to gain strength. Since the rollover into July delivery, the Henry Hub prompt-month contract is up 78.4 cents, a 39.9% gain.

Monday's settlement at $2.747/MMBtu marked a year-high price for the Henry Hub prompt-month contract and its highest since $2.758/MMBtu on September 14.

As gas prices went up in the past month, coal consumption also climbed, increasing 29.4% nationwide from 12.8 million st in the week ending May 19, with coal-fired boilers in the Midcontinent Independent System Operator and the Electric Reliability Council of Texas leading the surge.

MISO has seen coal consumption jump 43% since mid-May, with weekly volumes climbing to 4.1 million st last week from 2.9 million st. MISO weekly coal consumption last topped 4 million st in January.

Coal consumption in ERCOT has increased since early April and picked up in May. ERCOT coal consumption had not surpassed 2 million st/week this year until volumes topped that mark in five of the last six weeks. Consumption reached a year-high mark of 2.5 million st in the first week of June.

--Jim Levesque, jim.levesque@spglobal.com

 --Edited by Jason Lindquist, jason.lindquist@spglobal.com

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