Dec 24 - McClatchy-Tribune Regional News - Russell Ray Tampa Tribune, Fla.

About 1.7 million customers served by a group of rural electric cooperatives face the specter of higher electricity bills because the fee to transport coal by rail will be doubled by CSX Transportation in 2009.

The increased rate to move coal could lead to higher bills for 400,000 customers in Pasco, Polk, Hernando, Sumter, Citrus, Manatee, Hardee and Hillsborough counties.

Already, Withlacoochee River Electric Cooperative of Dade City has received state approval to raise electricity rates 4.7 percent beginning in January. The cooperative provides power to more than 200,000 customers.

Sumter Electric Cooperative, which has 170,000 customers, has no plans to raise rates, although it has not ruled out that option.

The cooperatives get their power from Tampa-based Seminole Electric, which operates a large coal-fired power plant near Palatka in Putnam County. The plant uses about 4 million tons of coal each year, and the only reasonable way for the plant to receive coal is by rails controlled by CSX, Seminole said.

Seminole's 10-year contract with CSX expires this year, and two years of negotiation failed to produce an agreement. As a result, Seminole will be charged rates that are more than twice as high as the old rate.

"We offered fair and reasonable proposals for service that were comparable to other electrical utilities served by our railroad," said CSX spokesman Gary Sease.

Seminole contends the new coal shipment rates are unreasonably high and has filed a formal complaint against CSX with the federal Surface Transportation Board, a process that could take two years to complete.

Seminole, which provides power to 10 rural cooperatives statewide, said its transportation cost for coal will increase by about $100 million a year under CSX's new rates. For the 1.7 million co-op customers, the cost of electricity would increase 6 percent, or $6.50 a month, Seminole estimates.

Copyright © 2008The McClatchy Company