This business segment ships coal and dry bulk commodities on the Ohio, Illinois and lower Mississippi rivers and on the Kanawha River and the Great Lakes, and ranks among the largest full-service dry-bulk carriers in the nation. A total of roughly 2,600 barges, 45 towboats and 25 harbor boats – owned and leased – are used in River Operations. Another 634 barges and 16 towboats are dedicated to moving coal to our power plants. We delivered more than 73 million tons of cargo in 2011, including more than 30 million tons of coal to our plants. Deliveries were slightly higher than in 2010.

River Operations’ ongoing net income increased $5 million to $45 million in 2011, mainly due to higher coal exports, increased barge fleet size, and 2010’s cost-reduction initiatives. But fuel, maintenance and flood-related expenses were higher in 2011. Flooding negatively affected operations in the spring; for the first time ever, river height temporarily prevented the ability to load coal from railcars to barges at our Cook Coal Terminal in Illinois. Fortunately, Cook Coal’s largest customer – the Rockport Plant in Indiana – had sufficient coal inventories.

GAAP net income was $45 million in 2011, up from $37 million in 2010.

The M/V Michael G. Morris plies the Mississippi River along New Orleans on its dedication voyage Aug. 31, 2011. The tugboat is one of more than 70 that AEP River Operations uses to haul coal and commercial freight on the Mississippi and Ohio rivers.