See if you can connect the dots.

First this, from Greenwire ($ub. req’d):

West Virginia regulators have approved American Electric Power’s plan to build a $2.3 billion clean coal plant.

Appalachian Power Co., a subsidiary of Ohio-based AEP, received approval for the project Thursday from the Public Service Commission. Regulators say the 629-megawatt Integrated Gasification Combined Cycle plant is needed to help AEP meet demand for electricity.

Then this ($ub. req’d):

Merrill Lynch has raised its forecasts for contract prices of coal for power plants and steel mills in 2008, predicting that prices will jump by as much as 200 percent, after recent supply disruptions resulted in a severe global shortage.

Merrill Lynch previously had forecast 2008 thermal coal prices at $80 per ton.

And finally, this:

Power Companies Shock PSC: $156 Million Rate Hike Request is Largest Ever By West Virginia Utilities

The rate increase request filed Friday by Appalachian Power and Wheeling Power is the largest ever by a West Virginia utility, a state Public Service Commission official said Monday.

“It’s pretty shocking,” said Byron Harris, head of the PSC’s Consumer Advocate Division. “I expected them to file some type of increase, but certainly not of this magnitude.”

The two power companies, both subsidiaries of American Electric Power, asked Friday for a 17 percent rate increase, which would raise about $156 million — more than any utility request ever made of the PSC, Harris said.

That’s $3700/kW from AEP, which would easily drive power prices north of 10 cents/kWh, in a state accustomed to half those prices.

Stay tuned, because the biggest rate increase in WV history will soon be topped. All in the name of cheap coal, of course.