Rocky Mountain Division Sees a Large Drop in Electricity Generation
Out of nine divisions, electricity generation increased in four divisions and decreased in five divisions for the week ending April 10.
April 21 2015, Published 2:36 p.m. ET
Electricity generation falls
Out of nine divisions, electricity generation increased in four divisions and decreased in five divisions for the week ending April 10.
The Central Industrial division continued to lead the drop in electricity generation. It dropped by 276 thousand MWh (megawatt hours), or 2.3%, in electricity production to 11.8 million MWh. Xcel Energy (XEL) and First Energy (FE) operate in the region.
The Rocky Mountain division dropped by 261 thousand MWh, or 5.6%, in electricity production to 4.4 million MWh. Both of the divisions on the West Coast—Pacific Northwest and Pacific Southwest—saw a drop in electricity production. Utilities (XLU) including Southern California Edison (EIX) and NextEra Energy (NEE) operate in the Pacific Southwest division.
The Southeast division gained 109 thousand MWh, or 0.6%. The South Central division gained 97 thousand MWh, or 0.8%. They were the top gainers in electricity production during the week ending April 10.
Impact on coal
Historically, the eastern US was served by coal producers in the Appalachian and Illinois Basin, while the western US was served by the PRB’s (Powder River Basin) territory. Since PRB coal is the cheapest, some PRB coal might move to the eastern states. However, the historic equation largely remains the same. As a result, a fall in electricity generation in the east hampers eastern coal producers (KOL) like Alliance Resource Partners (ARLP), while a fall in the west hampers PRB producers like Cloud Peak Energy (CLD).
In the next part of this series, we’ll look at coal shipments in the US for the week ending April 10. Coal shipments mirror demand.
