edison mission energy services
provide fuel and transportation services to midwest generation for coal and fuel oil
Coal is used to fuel 5,471 MW of Midwest Generation’s generating capacity. The coal is purchased
from several suppliers that operate mines in the Southern PRB of Wyoming. The total volume of coal
consumed annually is largely dependent on the amount of generation and ranges between 17.5 million to
19.5 million tons.
All coal is transported under long-term transportation agreements with the Union Pacific Railroad
and various delivering carriers. As of December 31, 2008, Midwest Generation leased approximately
4,000 railcars to transport the coal from the mines to the generating stations and the leases have
remaining terms that range from less than two years to 11 years, with options to extend the leases or
purchase some railcars at the end of the lease terms. The coal is transported nearly 1,200 miles from the
mines to the Illinois Plants.
Coal for the Fisk and Crawford Stations is typically shipped by rail to the Will County Station where
it is transferred from the railcars, blended as necessary to meet station specifications, and loaded into
river barges. These barges are towed to the stations by an independent contractor under a transportation
agreement with Midwest Generation. Occasionally, third-party transloading facilities are utilized.
Midwest Generation has approximately 305 MW of peaking capacity in the form of simple cycle
combustion turbines at the Fisk and Waukegan Stations. These units are fueled with distillate fuel oils.
See ‘‘Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources—Contractual Obligations, Commitments and
Contingencies,’’ for additional discussion of contractual commitments related to Midwest Generation’s
fuel supply and coal transportation contracts.
In the past three fiscal years, EME’s merchant plants sold electric power generally into the PJM
market by participating in PJM’s capacity and energy markets or by selling capacity and energy on a
bilateral basis. Sales into PJM accounted for approximately 50%, 51% and 58% of EME’s consolidated
operating revenues for the years ended December 31, 2008, 2007 and 2006, respectively. Beginning in
January 2007, EME also derived a significant source of its revenues from the sale of energy, capacity
and ancillary services generated at the Illinois Plants to Commonwealth Edison under load requirements
services contracts. Sales under these contracts accounted for 12% and 19% of EME’s consolidated
operating revenues for the years ended December 31, 2008 and 2007, respectively. For the year ended
December 31, 2008, a third customer, Constellation Energy Commodities Group, Inc. accounted for 10%
of EME’s consolidated operating revenues. Sales to Constellation are primarily generated from EME’s
merchant plants and largely consist of energy sales under forward contracts.