Coal: The Key To Reliable, Affordable Electricity

People involved in using coal to generate electricity
call coal the "essential and affordable" fuel to provide electric power
for America. This month’s column supplies the facts and figures that back up those
claims, nationwide and in Kentucky.

Essential

"Essential" means "basic, indispensable,
necessary" as well as "of the utmost importance." After food,
energy is the next largest commodity bought and sold in America. Our appetite
for all the things electricity powers, from the equipment to process milk on
the farm to the refrigerator cases to keep it cold at the grocery, to television
sets and factory machinery, lights and equipment in hospitals and hotels and
in our homes, electricity is an integral part of our lives day and night.

One industry group puts the value of electricity
sales at more than $200 billion a year. Nationwide, America’s homes, farms,
factories, and other businesses use thousands of billions of kilowatt-hours
of electricity each year. Electricity sure is an essential part of our lives
and economy, but how does coal fit in?

According to the Energy Information Administration
of the U.S. Department of Energy, for the year 2000, the electric power industry
used a record high of 970.7 million tons of coal. That coal fueled 51.4 percent
of the total electric generation nationwide that year. (The next nearest power
source was nuclear, which generated a mere 21 percent of America’s electric
energy.) So coal is the clear industry leader, producing more than half of the
electricity generated throughout the United States.

Here in Kentucky, coal’s role in the energy business
is even more dramatic: the 22 major coal-burning electric generating plants
within the state produced a huge 96 percent of the electricity generated in
the state during 1998.

Kentucky’s two coal fields, the Appalachian in the
eastern part of the state and the Interior in the west, play a vital-make that
essential-role in supplying coal to electric utilities in 24 other states, too.
During 1998, almost 77 percent of Kentucky’s coal was sold to out-of-state utility
company buyers; 64 of them bought more than 120 million tons of Kentucky coal
for 138 electric power plants.

Coal and electricity are connected in yet another
essential way. Mike Thompson, technical advisor for power generation at Big
Rivers Electric Corporation, one of three generating entities for Kentucky’s
24 distribution co-ops, notes the infrastructure (things like fleets of barges,
railroad lines and railroad cars, even trucks) to move coal from the fields
to the generating plants is already in place.

Thompson then adds another essential feature of coal,
its abundance.

"With more than 200 years of reserves still
in the ground," Thompson says, "coal is a very important ‘in-country’
asset."

Affordable-and consistent

Thanks to Kentucky’s major coal fields, electric
rates in our state were the lowest in the nation, according to the U.S. Department
of Energy’s latest monthly preliminary estimates from June 2001. And not only
do states such as Kentucky, which rely almost exclusively on coal to generate
electricity, have the lowest costs per kilowatt-hour, the stable price of coal
helps keep those rates consistent.

During the last 15 years, coal has consistently been
priced lower than the other two major fossil fuels, petroleum and gas. Nationally,
the costs of petroleum and gas sometimes spike at twice the cost of coal, which
remains quite predictable. So even in states where coal is a much smaller percentage
of the mixture of fuels used to generate electricity, coal’s stable prices add
a valuable portion of consistency to those states’ costs.

To find out more about how coal and electricity benefit
Kentucky and the nation, visit the Kentucky Coal Association’s Web site at www.kentuckycoal.org/.

–Nancy S. Grant

Next month: "Increasingly Clean"-coal-generated
electricity’s improved environmental impact