The Burlington Northern Santa Fe railroad began a massive maintenance program this year to remove coal dust accumulated under the track bed. Heavy spring rains mixed with the dust are being blamed for destabilising the track and causing two derailments in May.
Xcel Energy told Dow Jones Energy Service it expected further increases in the underlying cost of PRB coal, already at heavily inflated prices following disruptions to the coal transport system. Earlier in the week spot prices got close to $US20 per tonne.
Over the next five to seven years, Xcel expects to be paying about 30% more for coal, including rail transportation, as hedged tonnage contracts conclude.
Xcel had between 20 and 25 days of coal supplies stockpiled but would prefer to have 30 days of supply.
