U.S. Coal Plant Boom Poses Big Questions

Coal is loaded into a truck at the TXU Mining Big Brown site Thursday, Aug. 24, 2006, near Fairfield, Texas. The mine provides coal for the neighboring TXU Corp's power plant. (AP Photo/David J. Phillip) (David J. Phillip - AP)

DALLAS -- A building boom that would add scores of new coal-fired power plants to the nation's power grid is creating a new dilemma for politicians, environmentalists and utility companies across the United States.

Should power companies be permitted to build new plants that pollute more but are reliable and less expensive? Or should regulators push utilities toward cleaner burning coal plants, even if it means they will cost more and are based on newer, yet still unproven, technology?

How those questions are answered will have huge implications over the next few decades. It could determine how Americans light, heat and cool their homes and business, the rate of return on utility investments and the potential environmental impact of the new plants.

Nowhere do these competing interests play out with such force as in Texas, where 16 new coal-fired plants are proposed _ 11 of them by Dallas-based TXU Corp., the state's biggest power company.

The scope of TXU's 5-year, $10 billion plan is considered bellwether and being closely watched by industry analysts, lawmakers, competitors and environmentalists across the U.S.

"TXU put its stake in the ground and said it will (build the plants) faster and cheaper than anyone else," said Daniele M. Seitz, analyst with investment firm Dahlman Rose. "So they have something to prove."

The company is hardly alone, however.

Some 154 new coal-fired plants are on the drawing board in 42 states. Texas and Illinois are the only states where 10 or more plants are planned, according to the National Energy Technology Laboratory.

Energy analysts say factors driving coal's resurgence are soaring power demands, volatile natural gas prices and a favorable investment market.

Coal now accounts for about 50 percent of the power generated in the U.S. By the year 2030, that share will increase to 57 percent, according to Energy Department forecasts.

The U.S. has the world's largest coal reserves, enough to last for the next 200 to 250 years, analysts believe.

Larry Makovich, managing director for consulting group Cambridge Energy Research Associates, said the urgency to bring more power-generating plants online cannot be understated.