U.S. Electric Utility / Non-Utility

 

History of Electric Utility Deregulation, 2000 - Impact on Coal

Traditionally made up of regulated monopolies serving prescribed state service areas, the U.S. electric utility industry may ultimately become a nationwide competitive electricity market.  The expanded authority (Energy Policy Act, 1992) of the federal government to order utilities to wheel power from generators to wholesale buyers (municipalities and other utilities), has opened the U.S. electricity grid to competitive wholesale transactions.  In 1996, Federal Energy Regulatory Commission (FERC) Order 888 addressed the issues of open access to encourage wholesale competition to the electric utility industry and FERC Order 889 required utilities to share information about available transmission capacity.

While initial efforts to form a more competitive electric market in some states, such as California, have resulted in disaster during periods of both "under-supply" and "over- supply," other states have greatly intensified pressure to keep generating costs low.  Coal-fired generating plants close to major power markets will be well positioned to compete with low-cost power.  As new generating plants are needed in the coming decade and beyond, coal's ability to capture this new market will be aided by its low and stable cost, by expected increases in the cost of natural gas, and by increasingly efficient and environmentally beneficial Clean Coal Technologies.

 

 U.S. Electric Power Plant Shipments

Million Tons

Year

KY

WV

WY

U.S.
Total


1973

87

47

13

375

1974

90

42

18

385

1975

101

44

22

432

1976

102

45

26

455

1977

110

44

42

490

1978

99

38

53

476

1979

111

50

69

557

1980

112

53

90

594

1981

112

51

101

579

1982

106

64

102

601

1983

95

66

107

593

1984

119

74

127

684

1985

111

65

138

667

1986

115

73

138

687

1987

124

81

142

721

1988

116

80

158

728

1989

120

83

166

753

1990

129

89

176

787

1991

114

85

184

770

1992

117

85

182

776

1993

120

75

202

769

1994

127

93

226

832

1995

121

91

254

827

1996

117

102

269

863

1997

122

104

269

881

1998*

120

106

305

929

*Deregulation began in 1998
1999115105328942
2000106105324905
200198111351935
200284101360884
20036787365849
20047684383892
 

Source:  U.S. DOE/EIA - Cost and Quality for Fuels for Electric Utility Plants, 1973-1998, Coal Industry Annual, 1999-2004

 

 

Kentucky shipped 76 million tons of steam coal to U.S. electric power plants in 2004.

Kentucky shipped 53 million tons less steam coal to the U.S. electric utilities than in 1990.

Kentucky's share of the U.S. steam coal market declined to 8.5% in 2004, compared to 23.2% in 1973.

Wyoming increased steam coal shipments by 207 million tons since 1990, increasing its market share to 43.0% of the U.S. electric utility steam coal market, compared to 3.5% in 1973.

% Market Share


Year

KY

WV

WY


1973

23.2

12.6

  3.5

1974

23.4

10.8

  4.7

1975

23.5

10.2

  5.0

1976

22.5

9.8

  5.7

1977

22.4

9.0

  8.6

1978

20.7

8.0

11.2

1979

19.9

8.9

12.4

1980

18.9

8.9

15.1

1981

19.4

8.8

17.5

1982

17.7

10.6

17.0

1983

16.1

11.1

18.1

1984

17.4

10.8

18.6

1985

16.6

9.7

20.7

1986

16.7

10.6

20.1

1987

17.2

11.2

19.8

1988

15.9

11.0

21.7

1989

16.0

11.1

22.0

1990

16.4

11.3

22.4

1991

14.8

11.0

24.0

1992

15.1

10.9

23.4

1993

15.6

9.8

26.3

1994

15.2

11.1

27.2

1995

14.6

11.0

30.7

1996

13.6

11.8

31.2

1997

13.9

11.8

30.7

1998*

13.0

11.4

32.8

*Deregulation began in 1998
1999

12.2

11.2

34.8

2000

11.7

11.6

35.9

2001

10.5

11.9

37.5

2002

9.5

11.4

40.7

2003

7.9

10.2

43.0

2004

8.5

9.4

43.0

 

Source:  U.S. DOE/EIA - Cost and Quality for Fuels for Electric Utility Plants, 1973-1998, Coal Industry Annual, 1999-2004

BLACKOUT

August 14, 2003
Utility experts say the national system of electric transmission lines, known as the grid, is being
 asked to do more than it was designed to do.
 
Trends that could lead to power failures:
  • More electric power transactions over longer distances as a result of deregulation.

  • Increased competition producing less coordination among utilities.

  • Independent “merchant power plants” being added to the grid.

  • The creation of Regional Transmission Organizations.

  • Staff reductions by investor-owned utilities.

Source: Kentucky Living Magazine, November 2003.

www.eia.doe.gov/fuelelectric.html#pubs