Westmoreland Coal Co. has announced it is changing its power supply agreement with a subsidiary of Dominion Resources Inc.

On Dec. 28, Westmoreland announced it will no longer be under obligation to run the Roanoke Valley Power Facility starting March 1, 2017, and will provide power purchase contracts to Dominion Virginia Power in lieu of using the Roanoke plant to provide contracted energy.

"Amending the ROVA contract is a successful step toward our goal of reducing the impact of our non-core assets," said Kevin Paprzycki, Westmoreland's CEO, in a release. "This amendment allows us to meet our future capacity obligations through purchase contracts, instead of running our ROVA facility. By no longer operating ROVA, we will reduce our projected cash flow burn by $13 million through March 2019, with the most meaningful cash savings occurring in 2019. Additionally, we are now more aggressively pursuing the sale of the remaining physical facility. I'd like to thank the team for their great efforts in 2016 which resulted in this transaction."

Westmoreland said that it anticipated the release in 2017 of around half of the $22 million in restricted cash that has been in place since Sept. 30 as collateral for existing ROVA power contracts. It said that higher power prices will likely drop the cash collateral levels needed.