Georgia Power signs long-term coal contract

GILLETTE, WYOMING - Georgia Power Co. has signed a long-term contract to buy more of the Powder River Basin's low-sulfur coal.

The contract begins January 2004 and gives Burlington Northern Santa Fe Railway Co. exclusive rights to carry the coal to Memphis, Tenn.

From Memphis, the coal will be moved under a separate contract to Georgia Power's Plant Scherer in Juliette, Ga.

``In general we are, it is no secret, going to be purchasing more low-sulfur coal and that is part of this contract,'' said Mark Tyndall, a spokesman for the Southern Co., parent company of Georgia Power.

Low-sulfur coal is attractive to power companies because it can help them meet federal clean air requirements by reducing sulfur emissions. Those emissions contribute to air pollution and acid rain.

BNSF already delivers about 12 million tons of Powder River Basin coal to an Alabama plant run by Alabama Power, another Southern subsidiary.

BNSF spokesman Richard Russack said he couldn't disclose the terms of the new contract but said it extends beyond this decade.

``The contract represents a general trend in the electricity generation industry, especially in the southeast, toward buying more low-sulfur coal, Russack said.

By 2004, Plant Scherer will be able to burn 12 million to 14 million tons of Powder River Basin coal annually, according to BNSF officials.

Triton Coal Co. spokesman Scott Deppe said the contract is good for the region's mining industry.

Transportation makes up the biggest portion of Wyoming coal costs. But Deppe said as the price of delivery comes down, cleaner burning Powder River Basin coal will become more attractive to electrical utilities in the East.