Utah power plant takes Illinois basin coal

The Intermountain Power Project (IPP) in Utah further diversified its coal supply earlier this year to offset output declines from coal mines in the state.

The plant took 12,315 short tons (11,351 metric tonnes) of coal from Alliance Resource Partners' Gibson mine in Indiana in April, operating data collected by the US Energy Information Administration (EIA) shows. It also has taken 270,824st of Powder River basin (PRB) coal from Arch Resources' Black Thunder mine in Wyoming, extending a trend started in 2023 as Utah coal supply was in earlier stages of dwindling.

April's delivery of coal from the Gibson mine was the first time since at least 2008 that IPP has taken coal from the Illinois basin. Coal mined east of the Mississippi River typically does not travel west at least partly because of logistics challenges. It takes at least two railroads to take coal from the Illinois basin to Utah, and not all power plants can do that.

According to EIA data, no other power plants in Utah and Colorado took any Indiana-sourced coal in at least ten years.

IPP declined to comment on whether it will continue to take Illinois basin coal. Alliance Resource Partners did not respond to requests for comment.

The coal received from the Gibson mine in April was part of a test burn. It is a higher heat content coal than the PRB supply and closer to what Utah producers produce, but also higher sulfur than coal from the PRB and Utah.

Prior to last year, IPP only took coal from Wyoming, Colorado and Utah.

IPP started receiving PRB coal in March 2023 as Utah coal producers struggled to meet contractual commitments. It also took coal from Colorado in 2023.

Utah coal producers still are not supplying what they had previously agreed to, according to people familiar with the situation. This has forced IPP to idle one of its two generating units during non-peak seasons and to look further afield for fuel supply.

Output from the Uinta basin dropped to a 38-year low in the second quarter partly because American Consolidated Natural Resources' Lila Canyon mine, which incurred a fire in September 2022, was closed in January. Wolverine Fuel's Skyline #3 - the largest active mine in Utah – decreased output by 71pc to 244,377st in the second quarter because of the longwall move.

The delivery from the Gibson mine in April represents a fraction of that mine's output. In the first half of this year, the mine produced 2.89mn st, up from 2.67mn st a year earlier, MSHA data show.

IPP's demand for PRB and Illinois basin coals may be short-lived. The power plant's owners expect to switch to natural gas in mid-2025, after operator Intermountain Power Agency (IPA) completes construction of an 840MW gas unit in 2025. IPP's largest customer, the Los Angeles Department of Water and Power, is required by the state law to stop using coal-fired generation by 2026. IPA declined to comment on fuel purchasing.

In the first five months of 2024, IPP took 888,378st of coal from Colorado and Utah coal mines, according to EIA. That is up from 766,705st IPP has taken from the states' mines during the same five months last year. Shipments of PRB coal also increased compared with January-May 2023, when they had totaled 138,030st.

By Elena Vasilyeva