One of America's largest utility providers may switch from coal to natural gas
Southern Company may switch to cleaner, greener natural gas as the commodity becomes more economical than coal.
Wed, Oct 14, 2009 at 11:46 AM
If natural gas prices continue to drop, Southern Company – one of the largest utility providers in the U.S. – will likely boost its use of the commodity for power generation by 24 percent.
Natural gas prices are currently at about $4.92 per million British thermal units. September’s low of $2.409 per million Btu represented a dramatic 72 percent drop from the 30-month high of $13.577 per million Btu last July.
Prices under $5.50 per million make natural gas more economical than coal.
Atlanta-based Southern Company estimates it will use about 310 billion cubic feet of gas this year, compared to its usual usage of 250 billion. The utility provider relies on coal for 68 percent of its production capacity, and on oil and gas for 16% percent.
The company also has plans to purchase a biomass power plant in Texas as part of its goal to develop cost-effective renewable energy sources.
Subsidiary Southern Power will buy Nacogdoches Power from biomass fuel plant developer American Renewables and complete production on the facility, which will become one of the largest biomass plants in the U.S. once it’s up and running in 2012.
"We have a reputation of helping our customers meet their energy needs in a cost-effective, reliable and environmentally responsible manner, and we look forward to working with Austin Energy," said Southern Power Company President and CEO Ronnie Bates in a press release.