Duke Energy Indiana is to buy additional coal from Peabody Coal Sales as part of a contract price renegotiation and will also purchase coal this summer under four deals that run through the fall, according to a regulatory filing.
Brett Phipps, managing director of fuel procurement for Duke Energy Progress, an affiliate of Duke Energy Indiana, told the Indiana Utility Regulatory Commission the utility will buy an extra 500,000 st/year from Peabody in 2018 and 2019 after the renegotiation.
Duke Energy Indiana, which has over 780,000 customers, sought the price reopener with Peabody for 8 million st of high-sulfur coal and 2 million st of mid-sulfur coal, Phipps said.
The price, which was not disclosed, will take effect January 1, 2018.
A Duke spokeswoman declined to comment on the renegotiated contract Monday and Peabody officials could not be reached for comment.
"The result of the market price reopener with Peabody Coal Sales LLC was beneficial to the customer," Phipps said.
Meanwhile, the utility will receive an unspecified amount of coal this summer at its 600-MW Gallagher power plant in Indiana, under four short-term contracts awarded off a May solicitation, Phipps said. The agreements "with contracted volumes" will continue "through the fall of 2017," he said.
In the 12-month period ending May 31, DEI purchased about 10.6 million st of coal, under both long-term and short-term transactions, at an average cost of $2.20/MMBtu, Phipps said in the filing.
Delivered coal bought under long-term contracts averaged $2.20/MMBtu and made up 97.6% of the utility's total coal receipts, he said. The delivered cost of coal purchased under short-term commitments was $2.06/MMBtu.
