NS: Southern utility coal stockpiles grew slightly in third quar - Beckley, Bluefield & Lewisburg News, Weather, Sports

Norfolk Southern: Southern utility coal stockpiles grew slightly in third quarter

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Coal stockpiles at Southern power plants grew slightly in the third quarter, while stockpiles in the North remained the same, a Norfolk Southern Corp. executive said this week.

"Our Northern utility business stockpiles are at target. Southern utility stockpiles are in excess of target," Donald W. Seale, Norfolk Southern chief marketing officer and executive vice president, said in the quarterly conference call with investment analysts.

"The Southern utility stockpiles are being impacted by two broad factors. First, natural gas competition. Even with natural gas prices increasing on a moderate — from a moderate perspective to about $3.60 per million BTU — natural gas is still competing in the South at a higher rate than it is in the North, in our view.

"Second is, electricity demand just hasn't recovered from the recession. It's down four percent in our service territory. So you put those two things together, and then also, the summer weather was just not as warm as it was forecasted to be. It was a cooler summer.

"So those 3 factors combined, we saw the utility stockpiles at utilities we serve in the South tick up by about a day coming off the second quarter into the third quarter."

Seale also said that while coal from the Illinois Basin is the fastest-growing source area on CSX, it has not caught Central or Northern Appalachia in terms of total tonnage. About 38 percent of coal carried on Norfolk Southern in the third quarter originated in Central Appalachia and 28 percent from Northern Appalachia, Seale said. Powder River Basin coal was about 18 percent of tonnage and Illinois Basin coal 16 percent, he said.