Appendix B presents background information on the characteristics of coal supply contracts as they are reported on the Federal Energy Regulatory Commission (FERC) Form 580, "Interrogatory on Fuel and Energy Purchase Practices." Table B1 presents detailed information on individual coal supply contracts effective in 1997, organized by electric utility company, power plant, and contract expiration date.

Coal supply contracts are binding agreements, usually lasting 1 year or longer, between utility companies and coal producers and/or brokers. Coal supply contracts contain provisions that are binding upon the utility company and the vendor for the duration of the contract agreement. Typically, such provisions address:

1. Term or length of contract, possibly with contract extension provisions

2. Minimum quantity to be purchased

3. Source(s) of the coal and/or its quality characteristics

4. Base rate in terms of dollars per ton as of the effective date of the contract

5. Rate adjustment, which is used to adjust rates for inflation or deflation. Rate adjustment may be annual or quarterly and may be partial or total. It may be based on various indices, such as the gross domestic product (GDP) implicit price deflator. Adjustment may be aggregate or component-by-component, and may include adjustment for productivity change.

Other items addressed by the contract agreement are price, base quantity, quality specifications, quality incentives, quality penalties, supplier name, fuel production location, contract sign date, expiration date, and renewal and renegotiation options.

Coal supply contract information, including transportation- and shipment-related data, is listed in Table B1 for each plant receiving coal under contract reported on the FERC 580. Table B1 contains contracts, effective in 1997, that are to expire in 1997 and beyond.