According to a new study by Resource Data International, the annual Outlook for Coal and Competing Fuels, U.S. electric load growth is accelerating, with actual utility generation growth expanding at rates comparable to the nation's real economic growth rate for the past two years.
Several electric measures suggest that in the mid-1990s, the nation is becoming more electric intensive. The 1996-1997 report suggests the nation's coal producers should see firm prices and strong demand growth in most producing regions in 1997. Conditions favoring strong coal consumption should persist through 2000. Electric deregulation, contract rollovers, sulfur-dioxide caps and other factors will result in increased coal demand.
Also, it is "virtually certain" deregulation will make electricity cheaper in the U.S. In fact, despite tightening coal supplies in some regions, delivered coal prices are expected to continue to decline over the next 10 years. RDI predicts that for the near- and mid-term, the lowest, marginal-cost, fossil-derived electric power will be available from existing coal-fired units that are not yet fully used. Productivity improvements in mining will help keep prices low, while new efficiencies and competition will keep transportation costs in check.