Nov 16 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Greg Edwards Richmond Times-Dispatch, Va.

Virginia is a coal-producing state, but it is importing coal, too.

In January, Dominion Virginia Power plans to begin buying coal from foreign sources to fulfill the needs of its Chesapeake Energy Center on the Elizabeth River.

The power plant, built in the 1950s and '60s, burns 1.6 million tons of coal annually. It can produce 606 megawatts of electricity, enough to supply 152,000 homes.

Dominion Virginia Power spokesman Dan Genest said importing coal becomes economically feasible because it will help the utility save money by delaying the need to install expensive environmental equipment at the plant.

The low-sulfur, cleaner-burning imported coal will enable the utility to comply with new regulations on mercury emissions and the interstate movement of air pollutants, Genest said. A bill sponsored by Del. John S. Reid, R-Henrico, that was passed this year tightened state air-pollution rules governing power plants.

Coal-hauling ships eventually will unload their cargo directly onto power plant property. Work began this summer on dredging the channel and constructing a pier to accommodate 100,000-ton vessels.

Until the pier is completed in June, ships will unload at a nearby cement plant, and the coal will be trucked or moved by barge to the plant, Genest said.

The utility has been buying coal for the plant from mines in central Appalachia. The coal has arrived on 100-car Norfolk Southern trains, 10,000 tons at a time. The imported coal will displace that mining and railroad business.

It will come from South America and possibly Canada, Indonesia or Russia, Genest said.

According to the U.S. Energy Information Administration, the United States imported 16.9 million tons of coal during the first half of 2006, about 14 percent more than during the same period last year. South American coal, mostly from Colombia, accounted for 82 percent of the imports.

Coal imports have risen steadily this decade. The average contract price of imported coal, according to the federal agency, was roughly $50 per delivered ton during the first half of the year. The average non-contract price of central Appalachian, low-sulfur coal is $47 per ton, not including delivery.

Genest said not all the coal burned at the Chesapeake plant comes from Southwest Virginia and that the impact on Southwest Virginia mining should be minimal. The utility is planning to reopen a 63-megawatt power plant in Hopewell that burns coal and plans a 500-megawatt coal-burning plant for Wise County in the coal fields.

Dominion Energy, a sister company of Dominion Virginia Power, found itself targeted by activists this year over its importation of coal from a Colombian mine to its power plant in Salem Harbor, Mass. At issue were the impacts of the mine, which is partially owned by Exxon, on surrounding communities -- dust, noise and the loss of farmland.

The company no longer buys coal from that mine, Genest said.