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Legislature wraps up steel-recycling plant package, closes special session

The West Virginia Legislature on Tuesday cautiously put the bow on a legislative package to seal the deal on a business development for Gov. Jim Justice and Economic Development Secretary Mitch Carmichael.

Most of the work Tuesday happened in the House of Delegates, where one delegate said lawmakers had been pushed to pass the package in a rush so Justice could put on a “dog and pony show” during his State of the State address Wednesday.

Unknown at the time was that the governor would not be able to deliver his speech in person, as he tested positive for COVID-19 on Tuesday. The address will instead be delivered to lawmakers by written message, according to the Governor's Office.

Delegates were more measured in their consideration of the six-bill package than the Senate during the two-day special session and ultimately accepted the package.

The new laws set up a deal that would see a steel recycling facility set up in Mason County, House Speaker Roger Hanshaw, R-Clay, said Monday.

The deal also includes an incentive for the company to invest in developing a facility in the Northern Panhandle.

“West Virginia has been working at this for years,” Hanshaw said. “We’ve been working our way into big-league economic development for years. We created the [Department of Economic Development Closing Fund] specifically for this purpose, and this bill funds it to the tune of what’s necessary to recruit what will be the biggest economic investment in the state’s history. I’m excited about it.”

The Senate finished its work on the bills package Monday and briefly convened Tuesday to accept the House’s actions on the bills. Both chambers adjourned from the 2-day special legislative session less than 24 hours before the 2022 regular legislative session was scheduled to begin.

Overall, the majority of lawmakers said they support the deal with the hope for a development they expect to create 800 jobs and spur up to $25 billion in economic activity in the next 10 years, according to an analysis by the West Virginia University Bureau of Business and Economic Research.

Lawmakers held their hope with caution about the governor’s convening the Legislature two days before the session to make the deal happen.

Delegate Todd Longanacre, R-Greenbrier, wasn’t a fan of having to consider such big financial transactions in a short amount of time, especially considering that he felt like it all was meant to give the governor’s State of the State address a little oomph on Wednesday.

“I’ll tell you what the rush is,” Longanacre said Tuesday. “There’s State of the State address coming up tomorrow night, and there’s a dog and pony show planned. That’s the rush, but my constituents have the right to hear these deals play out in the proper committees.”

Lawmakers likewise were concerned that West Virginia, flush with $1.35 billion from the American Rescue Plan, would be susceptible to bad deals after a history of getting taken in with deals that either went bad or never came to fruition, including an announced $80 billion natural gas investment deal with China in 2017 and 2018, negotiated by former president Donald Trump.

“This is a huge, huge deal for our state, the largest we’ve ever had,” said Delegate Lisa Zukoff, D-Marshall. “I’m a little concerned about the hyperbole that we hear from the [Economic] Development Office. Hyperbole scares people, because we’ve all heard these deals that have never come to fruition before.”

Senate Majority Whip Ryan Weld, R-Brooke, wasn’t concerned about the stability of the deal Tuesday, saying the company in question has a proven track record.

“It’s a publicly traded company that I really think has a history — when they have promised, they have delivered,” Weld said. “In the legislation we passed, there’s certain benchmarks that they will have to live up to in order for the state to come through with what is in that legislation. So, over the next months and years, I’ll look forward to those benchmarks being hit, showing everybody that this is a real opportunity.”

The legislation complies with the terms of a potential $315 million investment by the state that lawmakers estimate will bring in $480 million in tax revenue annually.

That investment is part of a deal with the company that is anticipated to invest almost $3 billion for a steel recycling facility in Mason County and, potentially, a supporting facility in the Northern Panhandle.

They also passed a law that clarifies how a company can be eligible for a minimum of $1 billion’s worth of tax exemptions if it meets certain financial investment and job creation requirements. The legislation includes incentives that are part of a memorandum of understanding with the company that state officials haven’t been able to name as of late since they signed a nondisclosure agreement as part of negotiations with the company.

North Carolina-based Nucor Corp. announced in September that West Virginia was among three states in which executives were considering establishing a $2.7 billion steel recycling facility. Pennsylvania and Ohio were the other states.

Nucor manufactures steel and steel products and brokers certain steel components through The David J. Joseph Co., according to the company’s website. It is the largest recycler in North America, according to its website.

Justice is scheduled to give his State of the State address at 7 p.m. Wednesday in the House chamber.

Money moves

The bulk of the work lawmakers did this week amounted to the financial transactions of moving $315 million from the Department of Health and Human Resources and the Department of Homeland Security to the Department of Economic Development, and then restoring the balance of Health and Human Resources and Homeland Security with money from the American Rescue Plan, which President Joe Biden signed into law last year.

Delegate Larry Rowe, D-Kanawha, had a lot of questions for House Finance Chairman Eric Householder, R-Berkeley, and Justice’s chief of staff, Brian Abraham, about the means by which the money goes from the state to the company.

The state can give the company $315 million in three stages as matching funds for the company’s investment, Abraham said Monday.

Once the company has spent $500 million for the business development, the state will match that with $125 million. After the company invests another $250 million, it will receive $150 million from the state.

The state would make the third payment of $40 million, the one that would realize its full $315 million investment, only if the company invests in a second facility in the Northern Panhandle, Brian Abraham, chief of staff for the governor, said Monday.

State officials legally feel like they’re “on solid ground” to use the American Rescue Plan money to backfill Homeland Security and Health and Human Services, Abraham said Monday.

Tax exemptions in the billions

Most of the debate about the bill bundle came for Senate Bill 1001, which established the tax incentive package that representatives of the company asked for, Hanshaw said.

Under the new law, if a manufacturing company invests $2 billion in West Virginia and hires at least 500 full-time employees at twice the federal minimum wage, then that company can be exempt from 50% of its corporate net income tax.

That means an investment of $2 billion could exempt a company from paying $1 billion in taxes, if it meets the job creation requirements.

The tax incentive was something representatives of the to-be-announced company specifically asked for, saying existing state code for corporate net income tax exemptions wasn’t clear.

The new law also provides that a company meeting those investment and job requirements does not have to pay state or municipal sales taxes.

Hanshaw said Tuesday that the tax exemption is not the state giving away $1 billion to any company, and it is his position that any company that invests in West Virginia and uses that tax exemption will be adding revenue to the state’s tax base.

“Over the course of time, they will incur significant tax breaks as a result of locating here,” Hanshaw said. “That’s a tax break against investment and against taxes that they are not paying today. This has not cost the state of West Virginia.”

The floor outside the House of Delegates chambers is machine cleaned Tuesday, the day before the start of the 2022 regular session.

Fiesta Tableware announces pinky hue for 2022

The Fiesta Tableware Co. has announced that Peony is its new color for 2022. It is the first shade of pink the West Virginia-based company has produced for the Fiesta Dinnerware line since the retirement of Flamingo in 2013.

“Peony is coming at just the right time for our 2022 color,” Rich Brinkman, vice president of sales and marketing at Fiesta Tableware Co., said in a news release. “The shade is optimistic, pleasant and comforting. Coming on the heels of our anniversary, Peony takes our colors in a new direction where we can explore our softer side.”

Fiesta Dinnerware is manufactured in Newell, Hancock County. The company unveiled the new color at the Atlanta International Gift & Home Furnishings Market Tuesday morning. It is the 54th color the line has produced since its introduction in 1936.

The initial response on social media after the announcement was largely enthusiastic, as Fiesta collectors and fans have long asked for a shade of pink in the line. The company has said pink pigments are difficult and expensive to produce.

“Fiesta Dinnerware is fired at an extremely high temperature. Because of this high-fired process, certain colors can be very difficult to make, for instance, any shade of pink,” the company wrote in a blog post in 2012, when Flamingo was launched. The shade was retired just a year later.

The only other true pink that has been in the Fiesta line is Rose, which was in production from 1951 to 1959 and 1987 to 2005. Persimmon, a pinky-red hue, was produced from 1995 to 2008.

Peony will be available for preorder on May 15 and will begin shipping on June 1.

The company typically has 13 to 16 colors in production, the news release said. Last year saw the retirement of two longtime colors, Cobalt Blue and Shamrock. They had been a part of the line since 1986 and 2002, respectively.

DEP approves air quality permit for Longview Power gas-fired plant in Monongalia County despite pollution concerns

West Virginia environmental regulators have approved a key permit for a natural gas-fired power plant in Monongalia County.

The decision dismisses opponents’ arguments that planned air quality protection measures are inadequate and the project’s greenhouse climate emissions are unacceptable amid worsening climate change.

The Department of Environmental Protection approved the air quality permit for Longview Power’s Mountain State Clean Energy LLC to construct the 1,275-megawatt facility to be located north of the Longview coal-fired plant in Maidsville.

The project is slated to be a gas-fired, combined-cycle plant that will supply electricity to the power grid, linking to it via an interconnection used by the coal-fired plant.

The DEP’s Division of Air Quality issued Mountain State Clean Energy the permit on Jan. 5, concluding that the project would meet all applicable state and federal regulations.

The permit allows annual carbon dioxide equivalent emissions of 2,227,260 tons per year for each emission point for a Mitsubishi Hibachi Power Series M501JAC combustion turbine and 2,563,571 tons per year for a General Electric 7HA.03 combustion turbine.

Mountain State Clean Energy may construct either two of the former or two of the latter combustion turbines under the permit. Carbon dioxide equivalent is the number of metric tons of CO2 emissions with the same global warming potential as one metric ton of another greenhouse gas.

The final permit added a condition to limit the annual discharge of carbon dioxide equivalent by specific combustion turbine model after the Division of Air Quality said the permit, as previously proposed, did not have a reasonable cap for annual carbon dioxide equivalent emissions.

Jim Kotcon, conservation chairman of the Sierra Club’s West Virginia chapter, was among the environmentalists and residents who objected to the project at the DEP’s October public comment hearing on the proposed permit.

“The WV Chapter of Sierra Club is very concerned about proposals for large new sources of greenhouse gases, such as the misnamed ‘Mountain State Clean Energy’,” Kotcon said in an email Monday. “It is not clear how a facility emitting millions of tons of greenhouse gases could claim to be ‘Clean Energy’.”

The allowed limit in carbon dioxide equivalent per megawatt hour of gross output rises from 852 pounds in years one through six gradually up to 939 in years 31 and later, incremental degradation that Kotcon objected to in written comments.

Kotcon said allowing for up to a 10% increase in carbon dioxide equivalent emissions in years 31 and later directly contradicts the need to reduce greenhouse gas emissions.

The Division of Air Quality replied in its own written comments that unit degradation is inevitable, and that setting a lifelong achievable carbon dioxide limit “would not encourage [Mountain State Clean Energy] to implement a good maintenance program and focus on maintaining unit performance from day one.”

The International Energy Agency, an intergovernmental organization consisting of 30 member countries, said in May that investors should not fund any new coal, oil or natural gas projects if the world is to reach net zero carbon dioxide emissions by 2050.

Earth must meet the mid-century deadline to limit the rise in global temperatures to 1.5 degrees Celsius and avert the worst effects of climate change, the agency reiterated in a road map for the global energy sector that included the new recommendation to end all new fossil fuel projects.

Area union officials pushed state environmental regulators to approve the permit at the October hearing. They argued that constructing the plant would create jobs for their members.

The Division of Air Quality noted in its final determination that Mountain State Clean Energy had questioned the need for leak detection and repair requirements in the permit. But the company did not justify why proposed leak detection and repair measures weren’t necessary to minimize natural gas leaks.

The permit requires Mountain State Clean Energy to implement a plan to monitor all fugitive emissions.

The permit also requires the company to repair any such emissions within 30 days of detecting them, or ensure repair or replacement during the next scheduled facility maintenance shutdown, after a planned vent blowdown, or within two years — whichever is the earliest — if the repair or replacement is technically infeasible, would require a vent blowdown, a facility shutdown or is unsafe to address during unit operation.

In response to U.S. Environmental Protection Agency concerns about the fence line used in a modeling demonstration in the permit application, the Division of Air Quality added a requirement that Mountain State Clean Energy install and maintain an industrial fence or other physical barrier system around the facility to keep the public from accessing the facility.

Located 3,000 feet west of the Monongahela River, the site is slated to operate two pipeline-gas compressor units.

The proposed start-up date for the facility is Jan. 1, 2025, according to the DEP.

Mountain State Clean Energy LLC formally changed its name from Longview Power II LLC in November. That name change came seven months after the West Virginia Public Service Commission issued a certificate to the company to construct and operate the gas-fired facility and a 70-megawatt utility-scale solar facility — 20 megawatts to be located in West Virginia and 50 megawatts in Pennsylvania.

The commission also approved construction and installation of a 500-kilovolt electric transmission line extending approximately three quarters of a mile north from the gas-fired facility.

Longview Power II LLC and Longview Renewable Power LLC, a separate company granted the solar siting certificate that subsequently changed its name to Mountain State Renewables LLC, estimated that the cost to construct the gas-fired facility would be $1.1 billion, according to the Public Service Commission.

The Monongalia County Commission approved a 30-year, $58 million payment-in-lieu-of-taxes agreement with the Longview parties in December 2020.

Mon Valley Clean Air Coalition coordinator and Morgantown resident Duane Nichols argued in written comments to state environmental regulators and at the October hearing that it would be environmentally unjust for the plant to be located near West Virginia University medical facilities, University High School, health centers and other public sites of importance.

Nichols decried what he said was an excessive number of diesel coal trucks per day traveling along Fort Martin Road, causing air and noise pollution.

Nichols said greenhouse gas emissions from the planned plant would add to long-term exposure for area students, patients in medical treatment and older residents in care facilities, exacerbating an environmental justice issue he contends already exists with Longview Power’s 700-megawatt coal-fired plant and FirstEnergy’s 1,107-megawatt coal-fired Fort Martin Power Station nearby.

Those two plants emitted a combined 11,720,168 tons of carbon dioxide in 2019, resulting in health impacts that included 82 deaths and 4,173 lost work days, according to a Clean Air Task Force analysis of state data derived from a federal screening model.

“Perhaps these plants will need to shut down in a few years, when our nation decides to take ‘climate change’ seriously,” Nichols said in an email. “For now, there will not be a ‘new normal’ for Monongalia County and the surrounding region.”

Mountain State Clean Energy could not be reached for comment for this report.

Audit: State-owned lab facilities “insufficient,” out of date to meet needs

West Virginia’s state-owned laboratories are housed in buildings that are too small and too old, complicating some agencies’ ability to meet the demand of their services, according to a report from the state’s legislative auditor that was presented to lawmakers on Tuesday.

Most of these buildings — which include former schools and business warehouses — were not designed to be laboratories. In some instances, the services now housed within them are causing more wear to the buildings due to chemical usage. There have been reports of theft and other breaches due to limited security. Nearly all laboratories are too small to properly accommodate the needs of the agencies within them, according to the report.

“Each of the State’s lab testing programs do not have sufficient lab space in their current facilities, and no facility upgrades or remodeling have occurred to maintain modern standards,” the report read. “The lack of space and upgrades has made it difficult to maintain scientific standards under each laboratory’s accreditation standards, which in turn, puts at risk current lab testing programs, and precludes the State from conducting new lab testing programs.”

The facilities and agencies toured by members of the auditor’s office and analyzed in the report included:

  • The Department of Agriculture’s laboratories at the Gus Douglass Agricultural Center in Guthrie.
  • The Department of Environmental Protection’s Air Quality Laboratory.
  • The Bureau of Public Health’s Public Health Laboratory in South Charleston and the Newborn Screening Laboratory at the West Virginia Regional Technology Park.
  • The Division of Labor’s Weights and Measure Laboratory in St. Albans.
  • The State Police Forensic Laboratory in South Charleston.
  • The Office of the Chief Medical Examiner’s autopsy suite and laboratory in Charleston.
  • The Bureau of Public Health’s Environmental Chemistry Laboratory in Big Chimney.

In an interim committee presentation Tuesday, Keith Brown, a senior research analyst with the Legislative Auditor’s office, said the most pressing issues exist for the state Office of the Chief Medical Examiner.

The agency has never been accredited, in large part due to the limitations present in its current facilities. Staffing issues persist because there is not enough space to employ more workers.

The autopsy suite currently houses two permanent exam tables and one mobile. Matt Izzo, chief administrator for the Office of the Chief Medical Examiner, said at least nine permanent exam tables — and thousands more square footage — would be needed to meet standards for accreditation.

Upgrading and expanding lab space would allow the agency to perform more autopsies, quicker and would improve turn-around time for death investigations and death certificates, Izzo said.

“Our current physical plant is grossly inadequate for our caseload and the depth of services we provide,” Izzo said. “My sincere hope is that this committee and the Legislature as a whole will strongly consider the findings in the PERD audit.”

Auditors presented legislators with three options for the future of state-run laboratories: Build separate, upgraded facilities for each lab; “co-locate” and combine the labs to operate in vacant structures at the West Virginia Regional Technology Park in South Charleston, and upgrade those that cannot be accommodated there or build one laboratory facility for all agencies to share.

Option one and option three could cost between $170 million to $226 million. Option two — potentially the most feasible of the three, according to the auditor’s report — could cost between $105 million and $160 million, depending on the size of the facilities and the needs of the agencies.

The report said no decisions should be made until an independent architectural study is ordered by the Legislature.

State Agriculture Commissioner Kent Leonhardt warned lawmakers against potential risks of combining laboratory settings.

Different agencies, he said, have different biological security levels. Agriculture, for instance, has a security level of three. The Office of the Chief Medical Examiner is a two.

He said there are potential risks to be had by placing those programs — along with programs from the Department of Health and Human Resources, which may study different diseases and other human-focused issues — alongside each other.

“I’m all about making sure the citizens of West Virginia are safe — that’s the primary importance,” Leonhardt said. “I don’t really think we want to combine the animal labs and the human labs ... we can’t share everything.”

Some diseases studied on the animal side “are communicable for humans,” he continued. He urged lawmakers to think of potential risks that could pose if there were a cross-contamination, especially in light of the COVID-19 pandemic, which developing studies suggest transferred from animals to humans.

Senate President Craig Blair, R-Berkeley, said that under no circumstances would labs be set up to use the same materials or equipment, or to allow for any contamination. Instead, if they were located in the same general facility — such as the Tech Park — state agencies could collaborate more on issues and share expertise between them that could otherwise take days or weeks to coordinate.

“I never once envisioned the use of work facilities to where they’re sharing equipment — that’s not the case at all — but they can share resources,” Blair said. “One agency would be able to talk to another in quick fashion. We should be able to do that.”

Leonhardt said the Department of Agriculture previously hired an architectural and site selection firm to look at potential options for the agency’s labs. He said that report was returned saying “the best fit for the government” would be “for the labs to be rebuilt” where they currently stand in Guthrie.

Leonhardt would be open to another study, he said, but asked lawmakers how many studies would be performed before any action is taken for the state-owned laboratories.

House Speaker Roger Hanshaw, R-Clay, concurred that many studies had been widely performed. His first job out of college was at a Department of Agriculture lab, Hanshaw said. It’s been well known for decades that the facilities are in dire need of upgrades.

“We do have a bit of study paralysis here. We’ve studied this and studied this and then studied the studies,” Hanshaw said. “We need to take action.”