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Show s .., Western Ulesoy rces 1 Western Fuels' track record ! BvHeleneC.Monberg ,fcly owned Western coal 'I to offer a positive opportunity bodies to hold down fuel costs osequently, to help halt the race ::-3er electricity costs "-Ken - General Manager, Western :'.f Assn., Inc., Power Review, '.'!:,. 'i98i. r,shington-Western Fuels 'ation Inc., a seven-year-old non-'" non-'" -- -.Vvorning corporation, continues T' -Yii new ground and buck current time when the coal market is ;"1;s newcomer to the coal business 3;to deliver 10 million tons of coal 'members in 1981, "and we will '.,"se delivering substantially more million tons of coal annually," ing to Ken Holum, Western 'general manager. Most of this uill be from the West. ,. a (jme when construction Is in the ms Western Fuels has just built '0 mine, the Brushy Creek unbound un-bound mine at Harco, 111., in-a in-a railroad spur and loading ; and it broke ground for the rado underground mine east of ely, Colo., in August. y Colorado mine includes the suction of a 35-mile-long electric -. joad to move to coal to a new power j ;3t of 400,000-kilowatt size at anza, Utah, being built by Deseret j station & Transxission Cooperative quartered at Sandy in nor- I eastern Utah. Coal deliveries to vera Fuels members began from ' v Brushy Creek mine in early 1980 i are scheduled to begin from the ;erado mine in 1984. j! a time when the Reagan Ad--titration is trying to cut back on ---rgy impact aid programs in its all-. j drive to balance the budget, and -pect aid to energy-producing areas aging in Congress, Western Fuels agreed to pay more than $5 million impact aid to the town of Rangely, to b Blanco County, Colo., and to local vital, library, fire and recreation nets, and it made the first of three ;;ments to these entities during the A week. They will be completed by :!. -slern Fuels was organized during ' moratorium on new federal., coal .. - Jg by the Interior Department. !r the Carter Administration, "we in t get in the door to talk coal ?i ;'sag" with key Interior officials lii ''cause they didn't believe in public n 1 leasing," Holum told Western r; ' -wees Wrap-up (WRW) during an a- '"iew on Sept. 28. moratorium wasn't lifted until ij ! U, 1980, but in the meantime, n vern Fuels had lined up more than 5: :; million tons of coal in the Powder f Basin of Wyoming through others (1 "huld federal coal leases. ij- -im told WRW .Western Fuels ; !, "wstopush for more federal coal a!' , "H 'm the Powder River Basin, U, 4 Western Colorado, New Mexico js : Alabama." He predicted the lii an Administration will offer new, ssi Sr Weral coal tracts to lease in the V -r River Basin in both Wyoming ; j ntana in the near future to af- (,i opportunity for some of the r; ;rc"al companies, "such as Island f 'and Consolidation to stake out a e!i J1;" there. They missed the boat" W ' jeases were offered in the Powder j Sln in 'he 1960's, according to l'i '-IDLY COAL-BASED me . ' ,f ? the time when all types of reforms of energy are being 0r , tern Fuels is solidly coal-'I coal-'I is on the verge of entering into act to line up aDout 8no,ooo tons . ;ii New Mexico annually to serve o;r -kilowatt power plant under e : iion by one of its members, i r.ric of Albuquerque, near & "n northwestern New Mexico, outlook for a coal source in 10 ve Pacific Northwest ;;.'nB Co., of Portland, Ore., of its members "currently ..fo additional coal-fired accrding to the Western V ." annual report. K Fue's is interested in . - ..;.P of fuei as well guch as ... " Louisiana,' where Cajun Cooperative of New . . is a member, and in peat in K jf !na' where e North ' v 'bw t ; ,C Membrship Corp. is ' V Both are forms of coal, of 5 fS'S peat "young coal." r !h.i, vPredicts in its annual ' '.Ir 'onh Carolina member ,v W in Raleigh "could K ,rstU-S- "tility to make & Wl.?f,Peatas a boiler fuel : JCs bl lt' studies prove up." 'V mentioned in the fi ";Sncluderubbe'-tire chips, ; hufe and refuse-derived fuel! w ' ara r,i-r snibeA ' one of Western , . r v Ji citv lnterested in mixing ;i! ' "fu a" ;fusetotry to come up & Waeptable ler fuel on ' nou t0 reduce the volume f space int0 its "mited e? ai t? 6 other- What about "lnirra?"fNodirectin-at "lnirra?"fNodirectin-at the present time, Holum told WRW. HOW FINANCED Western Fuels is a unique "one-of-a-kind" organization born out of the strong rural cooperative movement in the Upper Midwest. It is a non-profit, though taxable, corporation with 29 members, including rural electric power cooperatives, municipally-owned municipally-owned public utilities, public power districts, and the Puerto Rico Electric PowerAuthority(PREPA), the second-largesf second-largesf state-owned electric utility in the United States. It lines up, supplies and arranges for the delivery of fuel to each member's point of use. In the future, Holum said at a coal conference in Pittsburgh on Sept. 14, it is likely that "Western Fuels will, in selected instances. ..own the coal handling facilities at a member's power plant and the coal stockpiles." It will also have to line up port facilities and shipping to move coal offshore to serve Puerto Rico. It operates on loans from its Class A members Basin Electric Power Cooperative of Bismarck, N.Dak., Tri-State Tri-State Generation and Transmission Assn., Inc., of Thornton, Colo., and Cajun Electric Power Cooperative, Inc., of Cajun, La.; on a $10.5 million loan that it received in 1977 from the National Rural Utilities Cooperative Finance Corporation; on a small charge of "less than 10 cents per ton of coal delivered" to each member, and by providing specialized services to specific members under contract, Orren Beaty, Western Fuels assistant general manager, told WRW on Sept. 29. The only organization which is comparable to Western Fuels in TUCO, Inc., established by Southwestern Public Service Company of Amarillo, Tex., to help investor-owned utilities line up fuel, Holum told WRW, and TUCO is not nearly as far along in its development as Western Fuels. TUCO has come to Western Fuels for pointers, he said. Western Fuels established two subsidiaries, Western Fuels-Illinois, in 1978, and Western Fuels-Utah in 1980, to . provide coal to specific members. Western Fuels-Illinois built the Brushy Creek mine which will soon have an annual production rate schedule of 1.2 million tons -to1, serve the , 235,000-.... 235,000-.... kilowatt teara plang in Sikeston, Mo., and the 240,000-kilowatt steam plant of Kansas City, Kan. Western Fuels-Utah has geared its construction of its new Deserado Mine near Rangely, Colo., to dovetail with the construction of the new coal-fired steam plant currently being built by Deseret G&T near Bonanza, Utah. "If . all goes well, first delivery of coal from the new mine over the new railroad to the new power plant's stockpile will take place in late 1983," the 1981 Western Fuels annual report stated. The Deserado Mine will provide 1,350,000 tons of clean coal per year to the first unit of the steam plant and 2.7 million tons annually when the second unit is completed. Completion dates of the units, each listed as having a new output of 360,000 kilowatts, are 1985 for the first unit and 1998 for the second, according to Deseret G&T. Cost of Western Fuels are escalating with the construction of the Deserado mine. In the next two-week period the number of people working for Western Fuels will jump about 20 percent, and an environmental specialist, safety director, senior project engineer for mining, and a project engineer for the transportation system, accountants and computer specialists are added to the Rangely office, Beaty told WRW on Sept. 29. Currently 44 work for Western Fuels. In mid-October the number will be 54, he said, as follows: Rangely office, 23; Washington, D.C., office, 18; Denver office, 5; Alliance. Neb., office, 2; Gillette, Wyo., office, 2; Wheatland, Wyo., office, 2 and Southern Illinois office, 2. To finance the increased staff, Beaty said Western Fuels is considering increasing in-creasing slightly the amount of charge per ton of delivered coal that Western Fuels makes to its members. FRONT-LOAD ENERGY AID Western Fuels has been both praised by local government leaders and criticized by industry for sitting down and bargaining with local officials in Rio Blanco County and Rangely to provide up-front money to mitigate the impacts of 400 new people coming to Rangely to work in and around the new-mine. new-mine. Holum shrugs off criticism of Western Fuels' apparent generosity. "Industries which have not provided for socio-economic impacts in the past are likely to want to do so in the future to have good working relations with the community and a stable work force." he told WRW. Rangely has about 2.100 population and will grow about 20 percent with the advent of Western Fuels and its 400 new jobs in the area. Here is what Western Fuels has allocated to the various entities in the Northwestern Colorado area, with payments to be made from 1981-83 in three equal amounts: Public Entity in Colorado-Town of Rangely for expansion ex-pansion of water and sewer facilities-$1 facilities-$1 515 000; Rio Blanco County for road and bridge construction, $1,500,000; Rangely Fire District, $120,000; Rangely Hospital District for trauma unit-$876,000; Rangely Library District? $105,000;Rangely Recreation District, 820,000; other community facilities may be built later. (Source: Western Fuels Association, Inc., 9-81.) In addition, Western Fuels has agreed to pay the County $60,000 and the town of Rangely $25,000 to monitor the agreement over a two-year period. Western Fuels also guarantees housing for its new employees and for "any government-sector induced population," and it will provide aid to senior citizens "if necessary" if housing becomes a problem to them with the influx of new people. Other contingencies are also provided for. Rio Blanco County has agreed, as a part of the above agreement with Western Fuels, "to require similar mitigation payments ' from other energy developers proposing to operate in the County under similar circumstances," according ac-cording to Western Fuels. IMPACT OF NEW BUDGET CUTS The Congressional Budget Office (CBO) the weekend of Sept. 26 predicted major cutbacks in natural resource and energy programs as a result of the 12 percent across-the-board additonal 1982 budget cut in domestic programs proposed by President Reagan on Sept. 24. Cuts of that magnitude could result in fewer Forest Service timber sales, "thereby decreasing timber receipts," " and lower royalties from public lands "due to loss of management ability" in the Bureau of Land Management, CBO told Congress. Recreational features of water projects being built by the federal water construction agencies and other "lower-priority" features of such projects are likely to be delayed, according ac-cording to CBO. Only one new construction con-struction start in the Bureau of Reclamation program for 1983 is under consideration, and that is contingent on the federal budget deficit, Assistant Interior Secretary Garrey Carruthers said here on Sept. 30. CBO also predicted major cutbacks in solar energy programs, energy conservation, fossil energy programs including synthetic fuels, and a termination ter-mination of the Solar Conservation Bank. Federal regulation of the Clean Air Act and over hazardous waste cleanup will be slowed, CBO said. |