Mar 8 - McClatchy-Tribune Regional News - Greg Edwards Richmond Times-Dispatch, Va.

An upward trend in coal prices could mean higher electricity bills for consumers.

The cash price for coal that utilities burn to generate electricity exceeded $101 per ton this week at a West Virginia mine served by Norfolk Southern Railway.

The price was reported yesterday in Platts, a trade publisher for the energy industry. The price adds an exclamation point to a trend that saw the average price of high-quality, Central Appalachian coal climb from less than $50 per ton on the spot, or cash, market in October to roughly $85 per ton at the end of February.

High-heat, low-sulfur coal from Central Appalachian mines is popular with utilities because it burns cleaner and helps them comply with federal clean-air rules. Five years ago, the same coal was selling for around $30 per ton.

With half the state's and half the nation's electricity produced from coal, the price trend could mean higher electricity prices for Virginians. Utilities generally are allowed to pass along the increased cost of fuel for their power plants.

Behind the higher coal prices is a global shortage of utility coal that has led to increased U.S. coal exports. Also playing a role is a weaker dollar compared with foreign currencies that has made U.S. coal attractive abroad, said Ted Pile, a spokesman for Alpha Natural Resources Inc. of Abingdon, the largest producer of Virginia coal.

"The coal industry has never seen anything like this, at least in recent history," Pile said.

A severe winter in China caused that heavily coal-dependent country to halt its coal exports, Pile noted. Coal shortages also hit utilities in India and South Africa, the latter of which has seen blackouts.

Alpha Natural Resources was the largest U.S. coal exporter last year, shipping 8 million of the 59 million tons exported by U.S. mines. U.S. export numbers are expected to jump at least 20 million tons this year and could exceed 100 million tons total, Pile said.

At the same time, some utilities, such as Dominion Virginia Power, have found it economical to import coal for some of its plants from places such as South America.

Contact Greg Edwards at (804) 649-6390 or gedwards@timesdispatch.com.