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Freight railroads’ bills for hauling coal to power plants jumped by almost 40 percent between 2001 and 2008, and more than doubled along some routes, according to a new Energy Information Administration report.

Coal shipping costs have increased in this decade, a federal study found. (Photo By: Norfolk Southern)

While the national numbers mask wide regional and state-by-state differences, EIA said there is no doubt that coal shipping costs are making up a large portion of electricity prices.

For example, transportation costs from the Powder River Basin, the nation’s most important source of low-emissions coal, have reached as much as 59 percent of affected utilities’ total delivered costs, EIA said.

That’s important, the agency added, because coal-based electric generating units get nearly three-quarters of their coal by freight rail.

“Because of these two factors, changes to rail transportation costs can have a significant impact on the delivered price of coal and indirectly on electricity prices charged to consumers,” EIA said in “Rail Coal Transportation Rates to the Electric Power Sector,” released June 22.

The report did not break out charges incurred by captive shippers, who lack access to competitive rail service. They often pay at least twice as much for coal transportation than shippers who have more than one rail option.

EIA compiled the data using carload waybills obtained by the Surface Transportation Board. The agency said its customers have been asking for more detailed coal transportation rate data.

Overall, revenue per ton-mile for railroads increased a shade less than 40 percent, from $0.0139 in 2001 to $0.0194 in 2008, with most of the rise occurring between 2007 and 2008. Adjusted for inflation, that’s about 11 percent, EIA said.

But those averages mask differences that vary widely from mine to mine and state to state.

The price tag associated with Powder River Basin shipments to Wisconsin utilities rose by 57 percent, from $0.0095 per ton-mile in 2001 to $0.0149 in 2008.

Similarly, coal shipments from the Powder River Basin to points in Missouri increased nearly 43 percent, from $0.0094 per ton-mile in 2001 to $0.0134 in 2008, according to EIA.

Tags: Business and Finance, Captive Shipper, Coal, Power Rates