Allegheny, Alliance rewrite coal deal

DENVER, COLORADO - Electric utility Allegheny Energy has modified a coal mine development and supply deal.

Greensburg, Pennsylvania-based Allegheny, which has operations in Virginia and West Virginia, says the changes give it a more secure supply of coal while Tulsa, Okla.-based mine operator Alliance Resource Partners gains flexibility.

Under the new terms, Alliance will supply 20 million tons of coal between 2010 and 2020 from several sources, including Illinois.

Alliance will keep leasing reserves in Washington County, Penn., from Allegheny as it seeks mining permits. Allegheny would receive royalty payments when production begins.

The original agreement, signed in 2005, allowed Alliance to seek the permits and Allegheny to buy up to 2 million tons annually once the mine opened.