Feb 24 - Knight Ridder/Tribune Business News - Stan Choe The Charlotte Observer, N.C.

Duke Power has signed a multi-year deal for higher-sulfur, Appalachian coal from CONSOL Energy Inc. to burn in its power plants.

The Charlotte-based utility will use the higher-sulfur coal only in plants where it has installed scrubbers, devices that reduce sulfur-dioxide emissions. Duke is spending over $1.5 billion on scrubbers to comply with the N.C. Clean Smokestacks Act.

Sulfur dioxide has been linked to respiratory illness, acid rain and haze. The N.C. Clean Smokestacks Act is more stringent than the federal Clean Air Act.

CONSOL Energy Inc. said the coal will be delivered to Duke by rail beginning next year. The higher-sulfur coal is cheaper for Duke, which has been trying to keep its fuel costs down.

Duke is allowed to pass on higher fuel costs, whether it be for coal or natural gas, to its 2.2 million customers.