Whenever time runs short, pressure typically mounts. This is especially true in politics. House Bill 2014, commonly known as the
“microgrid bill,” is no exception, and time is indeed running short.
Governor Morrisey considers this bill a cornerstone of his legislative agenda and his economic vision, the “Backyard Brawl,” introduced during his inauguration speech. Despite passing the House by a comfortable 88-12 margin—defying early skepticism—the Governor now faces significant hurdles in the Senate.
The bill aims primarily to establish certified microgrid districts, allowing certain businesses, notably data centers, to generate their own electricity and sell surplus energy directly to neighboring industrial customers independently of the state’s electric utilities. Additionally, it exempts these districts from specific Public Service Commission (PSC) regulations. Advocates assert the bill will attract data centers, generate considerable property tax revenues, and create construction and (some) permanent jobs.
However, not everyone is convinced. Senator Rupie Phillips of Logan County coined the phrase, “Mamaw can’t afford it,” highlighting concerns over potential lost benefits for average electric customers. Phillips correctly notes that when large customers like data centers rely on traditional utilities, all customers share the benefits by spreading fixed infrastructure costs across more users, thus lowering individual bills.
But the complexities of this bill extend beyond energy production. It proposes reallocating the substantial property tax revenues generated by data centers away from the counties hosting these facilities. Instead, the revenue would be spread across multiple areas, including a fund to further reduce West Virginia’s personal income tax (PIT). This reallocation isn’t sitting well with county commissioners expecting these funds.
Berkeley County Commissioner Eddie Gochenour Tuesday on Talkline criticized the bill as unfair, emphasizing his county’s rapid growth and critical need for revenue to support essential services such as fire, police, and infrastructure improvements. He says Berkley County is looking for a fair deal to move forward.
Positions vary. Senator Mike Woelfel – Cabell, in a discussion at the AARP broadcast location at the Capitol, argued that decades of coal severance taxes from his district and others have historically funded growth and infrastructure in places like the Eastern Panhandle. He sees the current tax revenue proposal as a chance to repay this long-standing imbalance.
Negotiation and goodwill are essential if this bill is to succeed before the clock runs out. Here’s what a reasonable deal might include:
1. Equitable Revenue Sharing: Counties hosting data centers should receive a fair share of the resulting property tax revenues. While the exact percentage warrants negotiation, allocating a minimum of 10% directly to host counties seems fair, reflecting the local burdens and responsibilities these centers create.
2. Existing Deal Exclusion: Economic development deals already in progress, particularly in Berkeley County, which rely on traditional electric utility infrastructure, should remain unaffected by the microgrid bill. If deals were struck without the bill as law, they should continue independently as they aren’t needed to close it. Any deal that is closed after passage would fall under the law accordingly. If a development does not utilize a microgrid, despite the bill becoming law, it is fair to question why revenues would revert back to the State at all.
3. Bill Simplification: The legislation should be simplified significantly. Current elements such as regulating power plant capacity factors, coal stockpile mandates, and overly restrictive siting guidelines that undermine local input complicate and detract from the bill’s core purpose. Lawmakers should eliminate extraneous measures and evaluate the bill strictly on its fundamental merits. Tweaks and unrelated measures should come later and separate.
Lawmakers and the Governor have until 11:59:59 pm Saturday to make a deal that works for all or not. We await the results.
Editor’s Note: Meadows is a former director of federal policy for American Electric Power. His views are his own and not those of any other entity.