PDF _ RL34186 - Rail Transportation of Coal to Power Plants: Reliability Issues
26-Sep-2007; Stan Mark Kaplan ; 93 p.

Abstract: Half the nation’s electricity comes from coal, and most of that coal is delivered to power plants by railroads. The reliable supply of coal by rail is therefore important to the electric power system. Concern over reliable deliveries of coal and other commodities, limited rail system capacity, and related issues such as rail rates, sparked several congressional hearings in 2006.

This report provides background information and analysis on coal transportation by rail to power plants. The report discusses:
! Problems since 1990 with the rail delivery of coal.
! Implications of rail capacity limits on service reliability.
! The role of coal inventories as a backstop to reliable coal deliveries.
! Proposed legislation intended, in part, to improve the quality of rail service to coal-fired plants and other shippers.

The report also identifies data and analysis gaps that complicate measuring the scope of rail service and capacity issues, determining the need for federal action, and evaluating the possible efficacy of proposed legislation.

Freight rail transportation and electric power generation are mutually dependent network industries. Railroads accounted for over 70% of coal shipments to power plants in 2005, and due to economic and physical limitations on other modes (truck, barge, and conveyor) the heavy dependency of the power industry on rail transportation is likely to continue into the future. From the standpoint of the rail industry, coal transportation is an important business, accounting in recent years for about 20% of freight revenues for the major railroads.

The mutual dependency between the rail and power industries creates a complex business relationship. There are connections and to some degree tradeoffs between such factors as railroad investments in capacity and service enhancement, and power company tolerance for transportation risk and willingness to carry the cost of larger coal stockpiles. A central point is that increasing the reliability of coal deliveries to power plants costs money, as does coping with disruptions. A central issue between power companies and railroads is how these costs should be shared.

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Topics: Transportation, Energy, Information

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