As Emily Regis recounts, Arizona Electric Power Cooperative (AEPCO) has been getting coal by train from northern New Mexico and from Wyoming’s Powder River Basin for decades.

“The New Mexico coal, we’ve been moving to Apache Station for about 40 years now,” she said. “It’s the same route, it goes on the same tracks to the plant.”

Regis would know. As fuel services manager for AEPCO, she manages detailed records on every train delivery for the utility’s planning and contract compliance purposes.

Regis told Power Engineering she started hearing about rail service issues, including crew and train shortages, in the western U.S. as far back as 2018. But AEPCO started feeling the squeeze in 2021.

“You know what your typical cycle times should be for moving a unit train of coal to a power plant from the same source: it just moves back and forth and back and forth,” she said. “But the cycle times got longer and longer.”

AEPCO’s standard round-trip cycle times for New Mexico coal delivery have increased from 3-5 days, to as long as 10 days, Regis explained. These times for Wyoming PRB coal jumped from 8-9 days, up to 10-14 days.

Regis said AEPCO is far from the only utility facing delayed coal shipments. She is president of the National Coal Transportation Association (NCTA), a group of 80-90 utilities and coal producers, railcar manufacturers and other members involved in the in the transportation and use of coal. She is also vide president of the Freight Rail Customer Alliance (FRCA), which represents shippers, largely utility members.

Because of the rail delays, coupled with a surge in demand for coal due to high natural gas prices, Regis said utilities started seeing their coal stockpiles shrink in 2021. Many utilities curtailed their coal-fired generating units for several weeks or months to try and conserve coal. AEPCO did this in last fall to rebuild inventory.

Regis even heard of one utility that was days away from running out of coal. Other anecdotes include trains parked on the railroad for days, awaiting a replacement crew for loading or unloading.

“[AEPCO] would have run out if we had not curtailed coal fired generation at our facilities,” she said.

Regis said rail service began deteriorating again in 2022 due to rail labor shortages, which affected commodities across the board.

“We expected things to get better by this time,” said Regis.

Federal rail regulators are taking notice.

The Surface Transportation Board (STB) announced it would require certain railroads to submit service recovery plans, as well as provide additional data and regular progress reports on rail service, operations and employment. Class I rail carriers will be required to participate in bi-weekly calls with STB staff.

The increased oversight followed extensive testimony in late April on rail service issues from a wide range of stakeholders, including coal interests.

“We’re really happy they jumped on it so quickly, and I hope it will be helpful,” said Regis. “We’re looking at a hot summer and I’m not sure they can respond fast enough.”

The railroads have largely attributed rail capacity issues to factors outside their control, like the broader supply chain issues and widespread labor shortages. But shippers, regulators and rail labor groups believe the heart of the problem is budget and personnel cuts made by railroads in recent years in the name of efficiency.

STB Board Chairman Martin Oberman has said the major freight railroads placed too much emphasis on lowering costs and satisfying stakeholders as they eliminated 45,000 jobs in the past six years and cut “their workforce to the bare bones.”

Groups like FRCA, NCTA and the National Rural Electric Cooperative Association have created an on-time performance survey to collect members’ experiences with railroad shippers. The results of the latest survey covering July-December 2021 were shared during testimony from April’s STB meetings.

According to the survey results:

-92% of the respondents reported that rail service issues have impacted their company’s coal transportation

-60% reported that rail service was worse than 2021 than it was in 2019 and 2020

-64% reported their companies had to modify operations in the second half of 2021 due to poor service

-50% of the respondents quantified the adverse impact at $1 million to about $10 million per utility

-20% quantified the impact at $10 million to $20 million per utility

Companies across the country are reporting shipping problems, but some of the worst rail issues have been reported in the western U.S.

“As with other utilities in the U.S., we are concerned and are monitoring supply chain issues, including those related to the delivery of coal,” said Mark Stutz, a spokesperson for Tri-State Generation and Transmission Association, a power supplier with generating capacity in Colorado and New Mexico. “We hope this effort will begin to resolve many of the issues our industry has been facing in these admittedly challenging times.”

Regis said AEPCO is holding its own with its coal supply but doesn’t know what the next few months will bring. Many utilities have ongoing contracts with railroads, giving them a volume request for certain trainloads based on the forecasted demand.

“We don’t know how to plan for this,” she said. “I’m not really sure how long it’s going to go on, and we haven’t really been hearing when relief and help is coming.”

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