There are different aspects to grid upgrade proposals.

On the retail and distribution end -- where utilities are regulated by state PUCs -- there is smart metering which would bring the benefits of IT to the management of household usage. It would make possible "time of use" pricing, allowing consumers to save money by shifting usage to off-peak hours. This would reduce need for new peak-load generation capacity. Seems to make sense. Feds could help by including tax breaks for cost of smart meters in the stimulus plan. (Who will pay for new meters and how has been a stumbling block so far.)

Transmission is a separate discussion although sometimes included with smart metering. The key idea here is federal eminent domain power for new transmission lines to overcome local opposition. While there has been much discussion of connecting wind and solar, who can guarantee that new federal eminent domain power will not be used to accelerate "coal-by-wire" projects, especially if a stringent climate policy is not in place first?

Furthermore, it would seem that smart metering might reduce the need for additional capacity. Efficiency first!

If the coal generation is IGCC with sequestration in spent oil basins which presently need added CO2 for enhanced oil recovery (and are now drilling for CO2 and extracting it for the purpose, similar to Nat. Gas), then coal-by-wire makes a lot more sense in every way than railroading the coal across 1/2 a continent to the customers.

Putting the captured CO2 into oil deposits as a way to sequester it (and enhance recovery) has a problem. The mass of CO2 is 3.67 times the mass of carbon captured (because of the added oxygen). It can be liquefied for shipment form the power plant to the oil field, but still weighs as much (good old conservation of mass). Coal is nearly pure carbon. A power plant burns _many_ tons of coal per day. Multiply by 3.67 to get the tons per day of CO2 to be shipped to an oil field that is, perhaps, half way around the world. IMHO, the cost of shipment will be very high.

To the extent that coal is not pure carbon, the remainder becomes ash. This is another distressing disposal problem.

So if I grind up a good quality coal and put it into my soil, is that "terra preta"?

I don't know. It depends on your belief system. I incline to the beleif that 'good quality' is not an appropriate modifier for 'coal', but I'm undecided as to whether 'terra preta' is 'good quality' whatever. ;-)

Coal is loaded with toxins. Mixing either coal or coal ash with soil will just terribly pollute the soil.

The goal would be to put captured CO2 into domestic oil fields, not OPEC's.  This eliminates most of the shipping problem and also improves balance of trade.  There would be more CO2 available than fields to take it, so the balance could go into deep saline aquifers (including those below the oil level in oil fields; oil is only a fraction of what's in oil fields) and unmineable coal seams.  The reduced oil imports might pay for the conversion from PCC to carbon-captured IGCC.

Once CO2 is dealt with, ash is a problem secondary only to the mining itself.  I suspect this problem would also be addressed by IGCC; a gasifier handling molten ash and quenching it to solid slag would produce all the ash as glassy pellets, which would be relatively un-leachable and would drain water rather than forming mud-like fluids.