Indiana thermal coal producer Solar Sources expects 2018 production of 3 million-3.5 million st, partly due to a new sales contract with Indianapolis Power & Light, company President Fred Bowman said in a Wednesday interview.
Although he declined to say exactly how much coal Solar will supply to IP&L, Bowman said deliveries will begin next year. Solar typically produces 2 million-2.5 million st annually at several surface mines in southern Indiana.
"It's exciting that everybody is buying coal," Bowman said. "Honestly, prices aren't up a lot, but they're better."
Nicholas Grimmer, director of fuel supply for IP&L, indicated in a filing late last week with Indiana regulators that Solar had been added as a supplier for the utility's 1,700-MW Petersburg plant, its last remaining coal plant.
IP&L also buys contract coal from Peabody Energy, Sunrise Coal and Gibson County Coal, the latter a subsidiary of Alliance Resource Partners. Petersburg burns more than 4 million st annually.
In the filing, Grimmer said IP&L currently is receiving coal from up to eight mines in the region.
"In the last few years, some out-of-state bidders have offered very competitive coal prices at the mine," he said, "But because of transportation costs, these bids were not our lowest-cost option on a delivered basis. In addition, buying from local suppliers increases the reliability of supply by decreasing the risk of disruptions and lengthy delays in the transportation of coal to the plants. IP&L's present boilers are all designed for Indiana coal."
Grimmer noted that IP&L's coal inventory continues to remain within target levels of 25-50 days.
