Coal costs shock utilities (Nearly doubled)

[RamboLiberal]

http://www.post-gazette.com/pg/04226/360980.stm

Standard & Poor's warned yesterday that the credit ratings of some U.S. utilities could be jeopardized over the long term if surging coal prices remain near current levels.

The rebounding U.S. economy and China, where double-digit economic growth has resulted in surging demand for coal that is used to generate electricity and produce steel, has caused coal prices to soar -- in some cases nearly doubling. For example, spot prices for benchmark Big Sandy low-sulfur coal mined in Kentucky and West Virginia have jumped from $31 a ton in January 2003 to $60 a ton this month.

Higher oil and natural gas prices, low inventories at power plants and railroad bottlenecks also have contributed to the run-up in coal prices, as has the lower U.S. dollar, which encourages U.S. coal exports.

"The effect of sustained higher coal prices will be staggered and will not be fully felt before 2006," S&P analyst Aneesh Prabhu wrote in a report published yesterday.

Prabhu said utilities with fixed or capped prices for generation, whose supply contracts are expiring or those that can't recover rising fuel costs because of regulations will be affected the most. Some utilities are entering into longer-term contracts to lock in prices over the near term while others are sitting it out, hoping to negotiate after prices fall, he said.

[bleedingheart]

1. here come the higher prices for the winter

...I can't sleep too much to do...

[Tight_rope]

2. Boy...the economy sure is going swell here in the US (not)...n/t

[mike1963]

3. should help out the blanket futures...

:eyes:
:grr:

[kestrel91316]

4. Time to...................

chop up the part of my apricot tree that broke off this year, and get some pruning done. Will heat home with wood this winter (easy in SoCal).

[northstar]

5. Ruh-roh.....is this the warning?

Citizens, bend over and grab your ankles...prepared to be Cheneyed - AGAIN!

[Athame]

6. so, have the miners' wages doubled?

Didn't we just read a few days ago how the coal miners were losing their health care benefits?

Note the attack on regulation, too.

[denverbill]

7. That's what happens when you devalue the dollar.

Commodity prices increase.

Nice work Shrub. You give middle class America a piddly tax break then devalue the dollar so much that any tax savings are way more than offset by increased energy and food costs.

[Sin]

8. Very interesting

I know coal has been going up in price around my area (Pottsville Pa) for a long time from the amount of people switching from it to oil + i don't think they like the hassle of it. but thats never good to hear all of electricity around here comes from coal gen plants.
+ hi all been lurking for about 4 years here just like to read here
great news sources. though i should post as well. :)

[Athame]

10. Welcome to the visible world, Sin

:hi: Looking forward to more of your posts!

[Career Prole]

12. Hi Sin!

Good to see ya! :hi:

[newyawker99]

13. Hi Sin!!

Welcome to DU!! :toast:

[yellowcanine]

9. Sounds like a little price gouging going on to me - I am sure Ashcroft

will get right on it just as soon as he gets all the statues in D.C. appropriately covered so no exposed titties are making visiting schoolboys think evil thoughts.

[Bandit]

11. gouge while the gouging is good because soon Law and Order will prevail

That is what is happening I feel. They are looking at the obscene profits the oil industry is currently enjoying and they want theirs while they can. Soon they won't have this kind of opportunity. right now the government is encouraging this behavior. Soon that will end.