Coal-fired power plants in American Electric Power's eastern fleet ran at just 47 percent of capacity in the first quarter of 2012, down from 61 percent in the first quarter 2011.
AEP Chief Financial Officer Brian X. Tierney spoke about coal-to-gas switching April 20 during the company's first-quarter earnings webcast.
Coal-fired capacity factors have decreased while natural gas-fired capacity factors have increased, Tierney said. Capacity factor is actual output as a share of maximum potential output.
Capacity factors for natural gas units in the eastern fleet increased to 47 percent in the first quarter, compared with 22 percent in the first quarter 2011.
Gas makes up 14 percent of total capacity in the company's eastern fleet, Tierney said.
Gas generation includes less-efficient simple cycle plants and more efficient combined cycle plants. At the current low prices for natural gas, combined cycle natural gas plants are very competitive with coal-fired generation and are experiencing even higher capacity factors.
Excluding the Dresden combined cycle gas plant that came online mid-quarter, the capacity factor for eastern combined cycle gas plants is 85 percent, Tierney said.
Tierney doesn't expect gas capacity factors to go higher this year.
Gas consumption increased 62 percent across the company's entire system and, at the same time, coal consumption was down and coal stocks rose.
"Our coal inventories have climbed to 45 days' full-burn inventory at the end of the quarter from 39 days at end of last year," Tierney said. "We expect inventories to climb over the second quarter."
Inventory levels are not yet as hard to manage as they were during the recession, he said.
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