On the final evening of the regular session, lawmakers completed approval of one of the governor’s priorities, intended to allow developers, particularly data centers, to harness localized, self-sufficient energy systems.
“It’ll open up a lot of opportunities for the state of West Virginia. These data companies, they are looking time to power,” said Senate Economic Development Chairman Glenn Jeffries, R-Putnam, referring to how long it takes for a new facility to receive its electrical power from the grid.
“Most of them, they want to have some type of generation within 16 to 18 months, and this gives them that option. And we’ve put guardrails in place to make sure the ratepayer is not going to pay for any of the infrastructure, anything to do with the microgrid.”
The Senate voted to approve a final version of the bill, 32-1.
The one voting in opposition was Senator Rupie Phillips, R-Logan. In a speech on the Senate floor, Phillips again expressed concern that if most of the big, energy-consuming data centers choose to use their own power supply, then they would not contribute to lowering rates for other energy users.
“I’m not going to sit here when my constituents are paying out the wazoo on their power bills. So this is for Mamaw,” Phillips said before casting his ‘no’ vote, dropping a name he uses for an average West Virginian.
Delegates, earlier in the day, made several changes to the complicated legislation, including how to divvy up the property tax base generated under the terms of the bill.
“We have the location, we have the energy, and we have the grit,” said Delegate Clay Riley, R-Harrison.
The House majority proposed:
50% for a personal income tax reduction fund;
30% to the county or counties where the data center is located;
10% to go to all counties on a per capita basis;
5% to be used for an economic enhancement grant fund; and
5% for an electric credit stabilization and security fund.
The amount of money going to local governments that rely on property taxes for local services has been a matter of concern as the bill has progressed through the Legislature.
That continued to be the case on Saturday.
“I’m appreciative that there is now a percentage that’s going to counties. I think our county leaders came to the Capitol, they spoke up, they were heard at least somewhat, and a change was made,” said Delegate Evan Hansen, D-Monongalia.
“But I’m concerned that while counties are now going to share in some of the benefits, should these microgrid projects be built — I’m concerned about our municipalities not getting a piece of the pie, and I’m concerned about our local school districts, which were not being given a piece of the pie.”
HB 2014 introduces a Certified Microgrid Program and a High Impact Data Center Program for West Virginia, aiming to attract and support these industries.
Gov. Patrick Morrisey and his administration have touted the bill’s focus on data centers, the physical facilities that house computer structures like servers and storage.
“This bill will dramatically increase West Virginia’s ability to play a major role in data economic development projects, improve our standard of living, and help reduce our income tax,” Morrisey said in a statement after the bill’s passage.
The governor continued, “This is the economic development bill of the session, and I applaud the Legislature for acting on it.”
Data centers are enormous energy users, and that is only expected to grow as artificial intelligence and other computing innovations gain traction.
They are prolific in states like neighboring Virginia, but they are also controversial among residents because of their aesthetics and noise. They are not major employers but can contribute significantly to local property taxes.
“Other states that have data centers did not have to go through legislative process of passing a handout through a microgrid bill, and there’s major uncertainty on what will happen to consumers prices, and we know that that’s surging through the roof now,” said Delegate Shawn Fluharty, D-Ohio.
“If you actually talk to West Virginians, they’re very concerned about the utility costs. But we haven’t addressed that, and we’re certainly not addressing with this legislation. If anything, we’re going the opposite way. But one benefit potentially is that if a company like Microsoft would come to West Virginia, they could bring their DEI program with them.”
The bill offers a possibility for data center developers who might want their own energy framework, the microgrids in the bill’s name.
In the microgrid piece of the legislation, the secretary of the Department of Commerce can identify and certify the districts following conclusions that there would be a significant and positive economic impact for the state.
An industrial plant or facility choosing to locate and operate within a certified district must represent a new electric generating load to take advantage of the program’s provisions.
“Data centers do not — do not, underline, do not — require a micro grid,” said Delegate Marty Gearheart, R-Mercer, speaking against the bill.
He continued, “I will tell you that my vote on this particular bill does not have to do with distribution of tax dollars. It has to do with the poor guy who goes home once a month and looks at that power bill and has seen it over the last few years continue to incline.”
Delegate Daniel Linville, R-Cabell, said the bill could lead to fruitful rounds of development.
“There’s been questions as to why we need micro grids,” Linville said. “The answer is, we want to be the most impactful place in the nation to be able to to to put these to put these data centers, and we want to be on the forefront of being able to to get this construction done.”