No one wants to see 160 good-paying jobs disappear in West Virginia. So it’s understandable the West Virginia Legislature would want to step in and “save” the coal-fired Pleasants Power Station by giving it $12.5 million in annual tax breaks.
But there’s a lot to this that doesn’t add up.
Firstly, the plant was scheduled to shut down this year. It’s life was extended to 2022 after owner FirstEnergy announced it had reached a deal in its bankruptcy case to keep the plant open for three more years.
Lawmakers somehow arrived at the conclusion that cutting $12.5 million in annual business and occupation taxes will keep this plant, which FirstEnergy spends $400 million on annually to operate at a loss, open past 2022. Every other sign — from the plant’s financial losses to the changing national energy landscape — says this plant will inevitably close. If the operation isn’t competitive in its market, why are taxpayer dollars being sacrificed? Who is going to make up that $12.5 million in lost revenue?
What’s to stop FirstEnergy from seeking more tax breaks in 2022? A proposed amendment to cap the tax cut at five years was rejected.
The method in which this was done is also concerning. The bill was announced by Gov. Jim Justice at 6 p.m. on a Friday during a special session, and Democrats said they didn’t see it until Sunday evening. The bill was rammed through the House of Delegates and Senate with the rules suspended. Is there anything resembling regular process in this Legislature anymore?
It’s not as if the bill was controversial. It passed overwhelmingly in both chambers. But did legislators really have the time and resources to properly review this proposal? The rushed nature, especially given the actions of GOP leadership in this particular Legislature (don’t forget the bypassing of committees and shuffling of committee members in both the regular session and a separate special session on the controversial education overhaul bill) invites suspicion.
The tax cuts were justified by the rationale that keeping these workers employed will more than make up for what B&O taxes would’ve provided, but that hinges on the plant lasting longer than its expected closing date of 2022. Electricity from natural gas and renewable energy sources is killing coal faster than any environmental regulations could. Since 2010, 289 coal-fired power plants have shut down.
If the Legislature’s real motivation is saving jobs, it’s understandable to want to take this action. But it begs the question of whether these jobs are are actually being saved long-term or if the state is again hanging onto something for as long as it can until it’s gone, rather than exploring alternatives.