Coal supply shortage noted at BPU

The Board of Public Utilities heard about a supply problem with coal at Wednesday night’s board meeting.

Bill Johnson, BPU general manager, reported that the BPU’s coal supply was down to 19 days, when the BPU is trying to keep it at 50 days.

Coal is delivered to the BPU through Union Pacific railroad, which has an exclusive agreement to access the BPU’s plant, according to Johnson. He said he is trying to mitigate the situation.

Deliveries of coal have slowed to the point where they are nearly shut down, not just for BPU but for others throughout the region, Johnson said. He added some of the difficulties may be tied to railroad labor.

Dong Quach, BPU executive director of electric production, said that overall, Union Pacific has been very good, except recently. In his 24 years at the BPU, the lowest the coal supply got was four or five days of coal left in 2008 at the Nearman plant, which was during a recession.

The BPU no longer routinely burns coal to generate electricity, but it has coal supplies on hand if it is necessary.

Eventually, renewable energy is expected to take over all generation from coal plants, according to Andrew Ferris, BPU director of electric supply planning.

The BPU board heard a staff report from Ferris on Wednesday night that indicated that renewable energy sources jumped at the expense of coal in recent years.

In 2012, coal was predominant, but in 2020 wind was the No. 1 power in Kansas and in the Southwest Power Pool, according to Ferris. Coal was regaining use again in 2021, the report stated.

Renewable energy prices, in some cases, have been trending down to compete with coal, as federal regulators encourage the use of renewables, but renewable prices may have been increasing again. Various tax credits and incentives make it financially more attractive for utilities to use renewable energy, according to Ferris.

According to Ferris’ report, BPU generation in 2020 was 47 percent renewables, 30 percent goal and 14 percent gas. Nationally, gas makes up 41 percent, coal 20 percent, nuclear 20 percent and renewables, 19 percent. The Kansas figures are 44 percent renewables, 31 percent coal, 19 percent nuclear and 6 percent gas.

There likely won’t be another coal plant built in the United States, unless something drastically changes, he said.

Industrial customers are more and more wanting to use “green” energy, according to Ferris.

The Southwest Power Pool, of which BPU is a member, is cautiously optimistic that there will be enough energy to meet summer demands, Ferris said.

ERC resolution adopted

In other action, the BPU board unanimously approved a resolution for the Energy Rate Component (ERC).

The resolution approves the under recovery of the ERC for the third and fourth quarter of 2021 for $2.3 million, which will be amortized over the first and second quarters of 2022.

There was no discussion on the ERC resolution.

According to the BPU’s website, the ERC was reported as $.036870 from April through June 2022. It was $.035010 from January through March 2022, and it was $.0339000 from October through December, 2021.

One recent BPU residential bill, from March 2022, listed the ERC as $.03501. The ERC amounted to around $20 on the approximately $200 bill.

BPU receives audit report

In other action, the BPU received an audit report from BKD, an outside auditing agency.

According to the auditors, there were no major issues found in the audit.