Coal - Economics of Coal for West Coast Power Generation -

mountain region to M tht Coast points for domestic consumption and for export are shown in Table 11. There is considerable disparity in rates from both Rock Springs, Wyo., and Castle Gate, Utah, to the four coast cities where the slack coal is to be used for purposes other than export. The rate on coal to be exported is the same from either starting point to any of the four coast cities even though there is a difference of as much as 341 miles in the shipping distance. It is interesting to note that the freight rate between Sunnyside, Utah, and Fontana, Calif., on coking coal is $5.05 per ton and that coal up to 8 in. can be moved on this rate if it is suitable for coking. This rate was published late in 1942 on a contemplated annual movement of more than 500,000 tons. There have been decreases in freight rates since 1923 on movements of slack coal from Utah into Seattle and Portland due to pressure on the railroads and to greater. quantity of coal shipped. It is the author,', opinion that a movement of slack coal in excess of 3 million tons of coal per year from Utah to any point in central California would justify a freight rate equal to that puhlished for Fontana, Calif.. or $5.05 per ton. The movement of 3 1/2 million tons of coal per year on the basis of 240 mine working days per year would require that 14,600 tons be handled each mine working day. If it is assumed that shipments could be arranged for a 6-day week, the average railway movement would he 11,200 tons, or approximately 3 trains containing fifty-five 70-ton coal cars per day. Such movements of coal would require railroad equipment represented by the investment amounts stated in Table 12 and entail the services of 250 men. Table 12 ... Railroad Equipment and Investment Required To Move 11,200 Tons of Coal a Day from Utah to California Railroad Equipment Cost 2800. 70-ton coal cara at $6.000 each $16,800.000 32 locomotives at $310.000 each. 9.920.000 Miscellaneous eauiument:.......... .5;000:000 Total........................ $31,720,000 It therefore appears that, under presently known mining methods, the lowest price at which coal could be sold f.0.b. the mine in amounts of 3 1/2 million tons per year for generation of power in central California would be $4.60. It also appears that the lowest freight rate that could be expecled between intermountain points and the central California area would be $5.05 per ton, making a total cost of coal delivered at a plant site of $9.65 per ton. Conelusions The following are the author's conclusions: 1. Coal mines in Utah and in the Kemmerer and Rock Springs districts of Wyoming could increase annual production by 6 1/2 million tons per year. 2. Under present conditions coal could probably be delivered to any steam electric plant in central California at a price not to exceed $9.65 per ton. 3. The use of coal at such a price, while higher than the equivalent present price of fuel oil, is entirely feasible. 4. There are adequate railroad facilities for movements of large quantities of coal from the intermountain region to the Rest Coast. 5. In a national emergency it probably would be extremely difficult, if not impossible, to obtain sufficient oil to meet requirements of the greatly expanded West Coast steam electric generatsing capacity. 6. The intermountain region contains ample coal reserves to supply all conceivable demands for West Coast power generation for a number of generations. 7. Increasing demands of labor threaten to lessen, if not eliminate, savings in cost of coal production through the use of new mining machinery. 8. Continuation of experiments in socialism by the Federal Government through construction of hydroelectric generating plants, particularly those unrelated to land-use reclamation, defies justification. Rates under this concept of a governmental function are subsidized through greater taxation of its people. Private capital is available to construct steam plants, or hydro plants where feasible, and should be permitted to continue in order to preserve the principles of our free enterprise system. DISCUSSION (L. C. McCabe and Robert P. Koenig, presiding) C. C;. BALl*—I was asked to lead off the discussion, but it is not with the thought that I might be able to add anything to the paper. The thoroughness with which it was prepared rather forestalls the asking of many questions. Your treatment, Mr. Heiner, is a very valuable contribution. I do want to suggest—that although you have limited your study to this specific question, with certain geographic limitations, many of the things in your paper apply just as well to the eastern coals. I want to agree 100 pct with your final conclusion concerning government-subsidized construction. Id. C. McCabe*—It is certainly worthwhile to take stock occasionally to see where we are going in problems of this nature. I agree with Mr. Heiner that ultimately the only reliable source of fuel that the West Coast has is coal hut the time factor is the difficult element to evaluate. Just before I came here I discussed this subject with N. B. Hinson, Vice President and Executixe Engineer of the Southern California Edison Company, and Chairman of the West Coast Inter-Power Exchange Committee. He has given much thought to utilities' fuel supply and it was very helpful to me in preparing a discussion of the paper to talk with him beforehand. Stock taking and forecasting of future development are essential to the continuing success of any enterprise. Mr. Heiner has called attention to the unprecedented growth of central and southern California and to the increased demands for fuel and power which have accompanied it. He discusses the increased fuel oil and natural gas requirements and the probable limits on the future use of these fuels and of hydroelectric power. In contrast to the calculable limits of these sources of electric energy, the author points to the availability of enormous reserves of coal in the Rocky Mountain States adjacent to the Pacific Coast which can be utilized for power generation. That there will be increased use of coal for power generation in the area under discussion is generally accepted hut it is in the timetable of such development that there is not complete agreement. In a recent report, Mr. Hinson reviewed the future power outlook for the Pacific southwest area. He pointed out that the use of steam plants in connection with water power plants in this region has made the maximum use of hydroelectric energy possible, and that the correct balance between hydro and steam generating plants produces the most economical overall system. Steam plants in the area which had been installed to protect against deficiency in hydro energy in dry years were used to carry war loads. Fortunately, no dry