Reclaimed surface mine chosen as site for Va. clean-coal plant

Washington (Platts)--12May2006

A reclaimed surface mine in Wise County, Virginia, is the site of a proposed
clean-coal power plant that could have as much as 600 MW of generating
capacity. The plant, which has been discussed for years, will be built by a
consortium of power companies, cooperatives and economic development agencies.

The consortium members include Dominion, American Electric Power unit
Appalachian Power, Old Dominion Electric Cooperative, Virginia Municipal
Electric Association and Blue Ridge Power Agency. They announced the site
selection Thursday afternoon.

In early 2005, Dominion said the consortium was studying five sites in
Buchanan, Lee, Tazewell and Wise counties. These sites originally were
proposed by the Virginia Coalfield Economic Development Authority.

A site near St. Paul, Virginia, in Wise County, known as the Virginia City
site, came up the winner for final evaluation. Fluidized-bed technology will
be used and the plant would burn 2 million short tons/year of Virginia coal.

"We reached a major milestone in selecting a site to proceed, but there's
still a long way to go before the plant becomes reality," Dominion spokesman
Dan Genest told Platts Thursday. "We would like to build it, but it's too
early to say we will build it."

For one thing, the plant has to qualify for an air permit from the state
Department of Environmental Quality, "which is really the big one," Genest
said, "and the next big hurdle is to get the State Corporation Commission to
set a level of cost recovery as well as a return on equity."

"I suspect trucked [coal] will be primary, but rail also will be considered,"
CEDA Executive Director Charles Yates told Platts Thursday. "The construction
phase will last at least four years; I think they're looking at 2012 for the
plant to come online."

"One of the reasons for building it in southwest Virginia and for choosing
that site is the availability of coal," Genest said. "But we wouldn't begin to
solicit vendors until we determine it is economically feasible and
environmentally feasible."

The ownership of this plant is "to be determined," Genest said. "It could be
all of the members of the consortium, or some of the members of the
consortium."

The selection of the Virginia City site "is consistent with a 2004 Virginia
General Assembly initiative ... encouraging the development of a coal power
station in Southwest Virginia to provide energy for Virginians," the
consortium said.

-- Steve Hooks, steve_hooks@platts.com

For more information, take a trial to Platts Coal Trader at
http://www.coaltrader.platts.com.


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.