Rising natural-gas prices mean American Electric Power is burning more coal and less gas compared with a year ago, according to the company’s chief executive.
“Our coal generation has picked back up considerably,” said Nick Akins, the president and CEO, in an interview.
AEP is one of the largest users of coal in the country. But the coal industry has suffered as AEP and other utilities have made use of what had been less expensive natural gas.
The market price of natural gas bottomed out last year at about $2 per 1,000 cubic feet. Since then, it has gradually risen, hitting $4 last month. This is still a low price in the context of the past decade or so, but that is a substantial increase in the short term.
Now, the price exceeds a level at which “you’ll see the pendulum swing back toward coal-fired generation,” Akins said.
via www.dispatch.com
That pendulum is the market forces of supply and demand.