US power sector coal stockpiles are elevated after a mild winter and the warmest March on record reduced coal-fired generation demand, limiting the need for utilities to make spot coal purchases ahead of the summer cooling season.
US generators currently hold inventories that are generally at or above target levels, market participants told Argus. While the stockpiles at most power plants are not high enough to make generators resell coal, the inventories are sufficient to keep some buyers from purchasing more coal for delivery this year.
Tennessee Valley Authority "is fully contracted for coal in calendar year 2026," the utility said. "We have and will have solicitations for 2027 and beyond."
Some power generators have already deferred portions of their 2026 contracted coal tonnage into 2027 or 2028, some coal suppliers said.
Other utilities are waiting until summer to evaluate delivery strategies. Omaha Public Power District's coal stockpiles currently "are in line with our targets", the utility told Argus. The company expects to follow its typical coal procurement strategy of issuing multiple solicitations during the year, but "as we complete our [spring maintenance] outage season over the next few weeks, we anticipate we'll gain additional clarity on needs for coal for the remainder" of 2026.
Coal deliveries in most of the US so far this year appear to be higher than in similar months of 2025. Some of this reflects purchase agreements participants entered into last year after higher-than-expected coal consumption.
Faster railcar turnarounds, combined with elevated coal inventories, also have contributed to rising power plant coal stockpiles, market participants said. To try to mitigate the increases, some utilities have extended unloading times or are considering reductions in railcar sets. More than half of the coal delivered to US power plants arrives by rail.
Power plant operators typically draw down coal inventories during summer and winter periods —when generation for cooling and heating climbs — and rebuild stockpiles during the spring and fall shoulder months.
This year, however, unusually mild weather limited the winter season coal stock drawdowns. From December-February the average winter temperatures in the contiguous US was 37.1°F (2.8°C), which was 4.9°F above the 20th-century norm for those months and made the period the second-warmest meteorological winter in the National Oceanic and Atmospheric Administration's 132-year climate record. The average temperature across the country last month was 50.85°F (10.47°C), making it the warmest March on record.
Lower year-to-date natural gas prices have further pressured coal consumption by making it more economical for generators to run gas-fired plants at higher rates. Day-ahead prices at the Henry Hub and Chicago Citygates in February and March were significantly lower than in the same months of 2025, a downward trend that has continued this month.
Mechanical failures and unexpected outages across the US additionally limited coal use in certain areas. Unit 5 of OPPD's North Omaha power plant was offline for most of last quarter following a steam tube failure inside the facility's boiler that dislodged external insulation. Prolonged outages at Xcel Energy's Comanche unit 3 in Colorado and LS Power's Sandy Creek Station in Texas also limited demand for coal, while recurring outages at Dominion Energy's Mt. Storm power plant in West Virginia led coal producer Alliance Resource Partners' to cease operations at its Mountain View mine.
With the lower coal generation and steady deliveries, coal inventories at US power plants are likely to grow by an average of 3mn short tons/month (2.7mn metric tonnes/month) from January to June, the US Energy Information Administration projected in its 7 April Short-Term Energy Outlook. In contrast, during the same period in 2025, power sector coal stocks fell by an average of 2mn st month-over-month. The agency expects inventories to fall by about 1mn st/month over the back half of 2026, similar to the pattern for July-December 2025, as coal generation ramps up from earlier this year. But coal power in July-December may still lag behind year-earlier levels, suggesting continued higher inventories and less need for spot coal purchases through the end of this year.
