WASHINGTON -- Virginia's newest coal-burning power plant, in its coalfields, could be approved without limitations on the release of climate-changing gas.

To the south, Duke Energy got a green light to build a coal-fired plant near Charlotte, N.C., only after agreeing to limit carbon-dioxide emissions.

Of the fuels commonly used to run power plants, none releases more of the global-warming gas than coal. In the Southeast, coal produces more electricity than any other fuel.

In the past several years, power companies have pushed to build more than 150 coal-fired plants. But with Congress poised to restrict carbon-dioxide emissions and a trend toward greater environmental concern, some analysts say the boom may be fizzling.

Last year, plans for nearly 60 coal plants were canceled or delayed, according to the Sierra Club.

Utilities say that population growth and rising demand for electricity require more plants, even with energy conservation. In most cases, coal facilities are the most expedient and cost-efficient approach, they say.

The Southeast's dependence on this fossil fuel has helped prevent the carbon-emission argument from gaining traction here, industry and environmental officials say. With the exception of North Carolina and Florida, plans for new coal facilities are moving ahead with little regard for how much carbon dioxide they will release into the atmosphere.

"We're in a position of flux," said Cale Jaffe, an attorney for the Southern Environmental Law Center, which has brought several lawsuits against proposed coal plants in the region.

A coal boom

The rising cost of natural gas, another popular power-plant fuel, provided utilities incentives to consider coal more strongly in the recent past after two decades in which few coal plants were built in the U.S.

Regulatory hurdles that made nuclear plants virtually impossible to build provided another.

And more environmentally friendly energy sources, such as wind and solar, were too expensive and not reliable enough to provide a constant supply of power, utilities said.

According to the Energy Department and the Sierra Club, plans for about 170 coal plants have been announced since 2005.

Utilities say that unless more power plants are built, the country will face energy shortfalls within the next decade.

In South Carolina, the quasi-public utility Santee Cooper is seeking permits to build a coal-fired plant near Florence. The utility projects that without the plant, the growing region will see a shortage of 525 megawatts by 2013, enough to power more than 250,000 homes.

But coal is a more expensive fuel if the pollution costs are considered. Factor in the cost of capturing carbon or paying to offset the environmental impact -- and the cost jumps markedly.

A recent report by Synapse Energy Economics, a Massachusetts firm, estimated that electricity rates from coal plants would leap about 75 percent under a mandate for carbon-capture technology.

Scientists are working to improve technology to capture carbon, but it will likely be decades before it is made available for commercial use.

Environmental groups are skeptical of the industry's need-energy-now rationale for the coal boom, thinking it's trying to beat a law change curbing carbon emissions. The Sierra Club, which is waging a nationwide legal battle with other groups to stop the construction of coal plants, has termed this boom period a "coal rush."

Although federal regulations are still under development, they likely would require utilities to pay for carbon emissions under a "cap-and-trade" system, eventually install technology to capture carbon or both.

The legislation, America's Climate Security Act of 2007, sponsored by Sen. John W. Warner, R-Va., and Sen. Joseph I. Lieberman, I-Conn., is expected to reach the Senate floor in June.

A coal bust?

Though Congress has not yet regulated carbon emissions, several states have raised the possibility of future regulation in blocking plant construction. In the most notable case, Kansas last fall became the first state to deny an air permit to a coal plant on global-warming grounds.

The uncertainty over the scope of climate-change legislation also has reduced enthusiasm to bankroll new plants.

"It seems likely that the new administration in Washington will try to make its mark on greenhouse gas sometime in 2009," a January report from credit-rating firm Standard & Poor's concluded.

For now, funding is available for proposed plants. But the likelihood of future costs to control carbon have made the plants a riskier bet for lenders. More risk generally means higher borrowing costs.

"Funding from the street has not dried up. But has it become more expensive? Yes. Every indication is that borrowing will be more expensive in the future," said Patrick Lavigne, a spokesman for the National Rural Electric Cooperative Association.

"It's not necessarily if, it's when we'll have carbon regulation," he said. "Look at the positions of the three major candidates. It will be a priority."

Not convinced

Although scientists are convinced that global warming is a real phenomenon worsened by rising carbon levels, some state regulators in the Southeast remain skeptical that the positives of restricting emissions outweigh the negatives.

According to the National Conference of State Legislatures, only five states have enacted binding plans to restrict carbon emissions -- California, Hawaii, Minnesota, New Jersey and Washington state. Twelve other states -- including Southeast representatives Florida and Virginia -- have set nonbinding goals to reduce carbon.

During a hearing this year on a proposed plant in Wise County, proposed by Richmond-based Dominion Virginia Power, a top utility regulator complained that "this country will go back to the Dark Ages if this carbon hysteria takes over."

"Sometimes I wish we had never gone to the moon, because everybody says, well, we can change the climate in this country, we went to the moon," said the regulator, Theodore Morrison, who recently retired as a State Corporation Commissioner.

The commission approved the plant last month, but the state's Air Pollution Control Board still has to sign off on the project. At least one member of that board, Vivian Thomson, raised questions last week about the quantity of greenhouse gases the plant would emit.

Environmentalists say a state-by-state approach is especially problematic because airborne pollutants do not stop at state boundaries.

Though utilities building in the Southeast refer to their facilities as "clean coal" plants, environmentalists complain they will use outdated pollution-control technology.

For example, none of the plants under way in Virginia, South Carolina or Georgia will make use of a newer coal-plant technology called Integrated Gasification Combined Cycle. These plants cost more, but generate electricity more efficiently and emit fewer pollutants by transforming coal into gas under high heat and pressure.

Energy analysts predict IGCC plants will be the most cost-effective type to adapt to carbon-capture technology when it becomes commercially available.

Jim Martin, Dominion's senior vice president for business development, said in an interview that the Wise County plant would use the latest pollution-control technology and be carbon-capture compatible. A carbon-capture system would be installed once it becomes commercially available and affordable, he said.

"We've thought a lot about it," he said.

Virginia regulators, however, criticized the company's contention that the plant was compatible simply because it had set aside space to install such a system and that it was located near Virginia's coalfields, which scientists think could one day store captured carbon.

"Under this standard, it would seem that virtually any facility that is located in the coalfield region of the state . . . and has extra space available on its site would qualify as carbon-capture compatible," John A. Stevens, a senior utility engineer for the state regulator, testified. "In the staff's view, this is not logical."
Sean Mussenden can be reached at smussenden@mediageneral.com or (202) 662-7668