Major power producer Dominion Resources Inc's Virginia unit said it plans to convert three power stations from using coal to biomass.
If the conversion is approved, the plants could begin burning biomass in 2013, it said in a statement.
The company said the total economic impact over the 30-year life of the stations would be more than $350 million, including $30 million in local taxes and $180 million for the creation of more than 300 hundred jobs in the forestry and trucking industries.
Once converted, the power plants will generate 50 megawatts (MW) each and operate all the time, compared with the current peak production of 63 MW.
Biomass, a renewable energy source, uses biological material to generate electricity or heat. The company said the stations would use waste wood left from timbering operations to produce fuel.
Dominion also added that the fuel switch would meet the new emissions standards established by the U.S. Environmental Protection Agency and reduce nitrogen oxides, sulfur dioxide, mercury and particulate emissions.
The power stations, which started operations in 1992, are located in Altavista, Hopewell and Southampton County.
Dominion Resources' shares closed at $44.7 Thursday on the New York Stock Exchange.
(Reporting by Swetha Gopinath; Editing by Jarshad Kakkrakandy)