Does the Longview Power Plant Offend the Public Interest?
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by Frank Slider |
One of the most controversial issues before the WV Public Service Commission in recent years is the proposed Longview Power Plant in Monongalia County.
One of the most controversial issues in recent years is now before the WV Public Service Commission. The PSC must decide whether to issue a siting certificate
for the proposed Longview Power plant in Monongalia County.
The relevant sentence in state law says, "The commission may issue a siting certificate only if it determines that the terms and conditions of any
agreement relating to the abatement of property taxes do not offend the public interest, and the construction of the facility
will result in a substantial positive impact on the local economy and
So how would one determine whether the tax breaks offered to this facility will "offend the public interest"?
In enacting that law, the WV Legislature did not define those terms, so the PSC is left to figure out such things on a case by case basis.
Certainly, a polluter who wants to emit mercury into the air, where it will rain into our streams and contaminate our fish is offensive to the public interest. EPA recently concluded that one in six American women of child-bearing age already have enough mercury in their body to threaten the health of their unborn children.
A polluter who would increase acid rain in areas like Dolly Sods Wilderness Area, where sensitive soils and poorly buffered streams are already being damaged, is offensive to the public interest.
A polluter who would increase the emissions of nitrogen oxides that exacerbate the ozone pollution is offensive to the public interest, especially since the EPA recently declared six of the eight West Virginia counties with ozone monitors as "nonattainment areas" because ozone levels already exceed health limits.
Offering tax breaks for such a company is certainly offensive to anyone who cares about our environment.
And it is doubly offensive to offer such tax breaks to out-of-state developers whose only consistent statement is that they intend to sell off the project as soon as possible and take their profits back to Massachusetts. But lets face it; economic development
officials in West Virginia simply are not concerned about our environment.
So lets look at simple economic issues. When is a tax break for new investment "offensive" to the publics economic development interests?
Longview has obtained a tax agreement that requires them to pay between $3 million and $5 million per year in property taxes, a total of $105 million over 33 years. The County Assessor estimated that the full property tax burden would be in the neighborhood of $6-12 million per year, depending on how pollution control equipment is assessed. For the sake of argument, call it $300 million over 33 years.
Longview argues that this tax break is essential, and that the project could not be built if they had to pay their fair share of property tax. But Longview has never offered a single shred of evidence to support their claim that they cannot pay their fair share of
Studies submitted to the Monongalia County Development Authority indicate that Longview earns over $300 million dollars when they sell one of these power plants. They testified that they have spent about $3 million on the Longview project. That is a
pretty hefty profit margin. Could the PSC conclude that such an unseemly profit is "offensive to the public interest"? Certainly Longview is entitled to a FAIR profit, but when it means depriving West Virginia school children of $200 million in property tax
revenue, why not ask Longview to settle for a mere $100 million in profit, and pay their fair share of taxes? At a minimum, why not ask Longview to share windfall profits with the taxpayers of West Virginia who do pay their fair share of property taxes?
But Longview supporters insist that such tax breaks are justified because it will create jobs. Unfortunately, every job study submitted to the PSC assesses the number of new jobs created without looking at the number of existing jobs lost. While any
new facility creates construction jobs for a couple years, the long-term employment is limited. The bulk of the permanent jobs will be in new coal mining employment.
But West Virginia already produces all the electricity we need. Longviews own Market Impact Analysis projects reductions in output at other nearby power plants if Longview comes on line. This includes reductions at Harrison, Fort Martin, and other
Most of the coal supplying those power plants comes from union mines in West Virginia. Most of the coal for Longview will be from Pennsylvania, and it will all be from non-union mines.
By the way, what happens to West Virginia's severance taxes if out-of-state coal displaces West Virginia coal? Is that another hit to our already depleted tax base?
Giving a huge tax break to a facility that will simply shift employment from one facility to another is bad enough, but if it shifts employment from West Virginia to out-of-state mines, isnt that offensive to the public interest in West Virginia? I would hopethat the UMWA might think so. Will the PSC?