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Southeast utilities using less coal, more natural gas

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The region with the largest shift between coal and natural gas in electric power generation is also one of the largest markets for West Virginia coal — the Southeast.

"Lower natural gas prices, a concentration of highly efficient natural gas-fired generators, and the high cost of shipping coal from production regions have all contributed to this shift," the Energy Information Administration said in a report issued Nov. 22.

In 2001, coal accounted for nearly 60 percent of the electricity generated in the Southeast, according to the EIA. This year, the number has been between 40 percent and 50 percent.

Last year, natural gas prices as measured by delivered cost per million Btu were about the same as for coal from the Powder River Basin, but this year gas prices are higher than for both Central Appalachian coal and Western coal, according to the EIA.

"Power plants in the Southeast are as much as 1,600 miles from cheap Powder River Basin coal and have traditionally used both that resource and Central Appalachian Basin coal that comes from mines in the East," the EIA said.

"Natural gas-fired units have been able to take advantage of lower prices, leading to the drop in coal-fired output in the region. The Southeast is also home to a concentration of highly efficient natural gas combined-cycle plants ... meaning that the region could take advantage of the lower natural gas prices to displace a large amount of coal-fired generation."

Nationally, coal made a bit of a comeback versus gas in September, according to the EIA. Natural gas prices were up 26.1 percent compared with September 2012, and consumption was down 6.9 percent. Coal consumption was up 4.8 percent, and coal stockpiles were down 14.9 percent.

For the first time in four months, the prices for natural gas at both Henry Hub and New York City on a dollar-per-megawatt hour basis were above the price of Central Appalachian coal, the EIA said. Total coal stocks decreased 1.2 percent from the previous month.

"All regions of the country, except for Texas, saw a decrease in electricity generation from natural gas compared to the previous year," the EIA said in a separate report.

"This decrease in electricity generation from natural gas was mainly a result of the rise in natural gas prices that occurred over the past year. Conversely, coal generation increased in all parts of the country except for in the West and Northeast regions, although there was very little electricity generation from coal in the Northeast in both September 2012 and September 2013."