Planning for a diverse economy is not anti-coal
First appearing in The Parkersburg News and Sentinel
Aug 4, 2019
(Last) Tuesday, the legislature ended business and occupation (B&O) taxes for the Pleasants Power Station in Willow Island. Much of the discussion of the bill revolved around the impact of the tax cut ($12.5 million annually), how many jobs are located there (160), and whether other merchant power plants in the state pay B&O taxes (currently, none others do). But there were two delegates — Del. Bill Anderson (R, Wood) and Del. Evan Hansen (D, Monongalia) — who spoke about a much more interesting and important issue: ensuring a just economic transition in West Virginia.
My interest in Pleasants began a few years ago when the plant’s owner, Ohio-based FirstEnergy, filed an application with the West Virginia Public Service Commission (PSC) to require Mon Power and Potomac Edison ratepayers to pay for operation costs of the plant. Up to that point, Pleasants had to compete on the open market, but market analysis showed it was not economical long-term. I was an attorney for two community groups that sought to protect ratepayers from this costly proposal. Our expert estimated that this plant would lose a total of $470 million over the next fifteen years. The PSC required FirstEnergy to bear the market risks of the Pleasants’ future loses, so FirstEnergy withdrew its request. For that reason, I do not expect the $12.5 million tax break will make the plant profitable, but hopefully the tax cut will give Pleasants County more time to plan for the plant’s seemingly inevitable eventual closure due to free market forces.
Possible plant closures relate directly to the speeches that caught my ear on Monday. Longtime Republican Delegate Bill Anderson not only spoke strongly in favor of the tax break, but also about the importance of planning for the future of this state. He said he believed the legislature had a responsibility to better understand energy market forces and “manage it in such a way that, as the transition occurs in the future — and economic forces are going to drive this transition whether we like it or not — we can move to mitigate the trauma upon the citizens of this state.” Freshman Democratic Delegate Evan Hansen similarly spoke of a “just transition.” He said that, while it is difficult to talk about, we need to think about ways to diversify the economy so we are not as dependent on a few industries, as coal continues to decline in prominence relative to other energy sources.
Diversifying our economy is not anti-coal. It is not anti-anything. It merely means that we as a state should be saying “yes” to more small business economic development and should give more opportunities in a wider array of sectors. What happens to the coal industry depends on factors that are far beyond the control of even the state government. But the state government does have the opportunity to make small, simple changes to help catch us up to other states in small business growth.
I’m familiar with the energy efficiency industry. Our state regulatory environment is ranked 49th in the nation for being energy efficient. For example, very few governmental entities monitor or reduce their energy use, which would save taxpayers money, and our utilities’ energy efficiency programs are lagging or nonexistent. Creating jobs through improving our building stock (paid for through savings on utility bills) makes our homes and businesses more comfortable, more affordable, and safer. There are, I’m sure, many other examples of businesses that could grow here with a few tweaks by state and local governments.
I am hopeful that forward-thinking legislators like Bill Anderson and Evan Hansen will inspire others in government to work together to catch up with our neighbors in economic diversification. We shouldn’t wait until a coal plant or mine closes to create jobs in our communities — we need to start making them now.
Emmett Pepper is executive director of Energy Efficient WV, in Charleston.