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CSX's coal delivery is costing utility(Ledger, The (Lakeland, FL) Via Acquire Media NewsEdge) Jan. 14--LAKELAND -- Electric rates have dropped in recent months and could continue to fall. But for Lakeland Electric, one cost has risen sharply: the price to have coal delivered by CSX. Lakeland Electric generators primarily use natural gas. The utility has one coal generator, the reliable Unit 3 at the McIntosh power plant overlooking Lake Parker. Lakeland Electric has had contracts with CSX to deliver coal since the early 1980s, when Unit 3 went online. The contract expired at the end of last year and a new one began Jan. 1. The new contract for CSX to deliver coal, mostly from Appalachia, costs $24.6 million per year rather than the $14.7 million charged during the six-year contract from the beginning of 2003 through the end of last year. Most of the $10 million difference in the yearly price is because Lakeland Electric is now paying a fuel adjustment for the diesel fuel burned by CSX trains. Lakeland ratepayers will pay $6 million of the $10 million increase because the Orlando Utilities Commission owns a 40 percent stake in Unit 3; it pays 40 percent of the expenses and gets 40 percent of the power generated by Unit 3. Rick Snyder, Lakeland Electric's fuels manager, said the utility "just missed" being charged a fuel adjustment in 2002, when it negotiated the six-year deal. Fuel adjustment charges became standard for many delivery businesses beginning about six years ago when the cost for many fuels began spiking. The $6 million cost to Lakeland Electric is included in the utility's $235 million budget for fuel this year. That amount is being passed along to customers. Snyder said the utility looked for alternatives to CSX delivery but could not find a cheaper way. To see more of The Ledger -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.theledger.com. Copyright (c) 2009, The Ledger, Lakeland, Fla. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |