Growing head count in West, South to open market for coal power

London (Platts)--27Dec2006

Utility officials are describing the western fast-growth pattern as a
long-standing trend with important implications for coal-fired generators and
coal consumption.

Jim Owen, spokesman for utility interest group Edison Electric Institute, said
electric utilities in the fastest growing states will need to face up to the
challenge of meeting the consequential increase in electricity demand.
Coal-fired generation is expected to play a role in meeting the increased
power needs.

"The growth in population is going to create additional demand for electricity
from all sources, including coal and natural gas," he said. "The need for new
capacity will be only partially offset by efficiency measures such as demand
side management, and what this means is that we will need to look into
building more power plants, whether coal-fired or natural gas plants, and,
down the road, expanding nuclear and renewable energy use."

In population data recently released, Texas added the most residents over the
past year, while the populations of two other states ? Arizona and Nevada ?
grew at the fastest pace.

According to US Census Bureau data released December 22, the population of
Texas grew by more than half a million residents between July 2005 and July
2006. Florida, which posted the second-biggest growth over the same period,
added more than 300,000 residents. The West and South dominated the bureau's
list of the top 10 fastest growing states, with the populations of Arizona and
Nevada increasing at 3.6% and 3.5%, respectively.

Owen added that coal and natural gas play an important role in the electric
generating mix in Texas and other western states where populations are
increasing, but the reliance on wind and other renewable energy sources is
also rising.

California, which had an increase in population of slightly more than 300,000,
has virtually banned coal-fired generation. Although no other state has
followed California's example, many are engaged in a debate on how to meet
their growing energy needs while reducing emissions.

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