Kansas Power Company: Blackjewel Defaulted on Coal Deliveries
The ripple effects of Blackjewel LLC's recently filed bankruptcy are starting to be felt outside of the Cowboy State.
On Monday, attorneys for Westar Energy filed a motion in federal court alleging that the Kansas electricity provider isn't receiving adequate coal shipments from Blackjewel. Blackjewel is listed as the exclusive supplier of coal to Westar Energy's Jeffrey Energy Center located in Topeka Kansas.
Blackjewel filed for Chapter 11 bankruptcy on July 1.
"(Blackjewel) has failed to adequately supply the Energy Center with the quantities of coal needed by Westar Energy under the Coal Supply Agreement," the filing reads.
If U.S. District Court Judge Frank Volk approves the motion, the agreement between Westar and Blackjewel could be canceled and Westar would be from other suppliers. If that doesn't happen, Westar could suffer "irreparable harm," the energy supplier's attorneys said in the filing.
Westar energy supplies electricity to 700,000 Kansans.
Blackjewel's contract with Westar is set to expire at the end of 2020. The energy company is also contracted with BNSF and Union Pacific for coal deliveries. Those contracts also expire at the end of 2020.
During a court hearing on Friday, a judge approved an additional $900,000 to an already-approved $5 million loan in order to keep skeleton operations going at Blackjewel's Belle Ayr and Eagle Butte mines. Both mines are in Campbell County.
Hundreds of employees were sent home from the mines after a Blackjewel's request to enter Chapter 11 bankruptcy was denied.