Longview can build power plant, but shouldn’t get tax breaks
Op-Ed Letter to State Journal, WV News, December 16, 2019
The December 2nd editorial by Jeffrey Keffer (President, Longview Power) asks for our support for the proposed Longview II gas-fired power plant and complains about “extreme environmental organizations” opposing the project. In particular, they are asking us for multi-million dollar tax breaks to make their proposal economically competitive.
Unfortunately, Keffer and his supporters simply refuse to acknowledge the reality of climate change. Although he touts the plant as “cleaner,” it would produce 3 million tons per year of greenhouse gases, and that does not include the upstream emissions from pipelines, compressor stations and wells.
Unfortunately for Keffer, the “extreme” organizations keep citing facts from respected organizations such as the National Academy of Science, the United Nations, and virtually every major scientific society.
Unfortunately for Keffer, the demand for electricity simply is not keeping pace with the number of new generating facilities. According to the US Energy Information Agency, the U.S. has installed almost three times as much new generation capacity as it has seen in retirements in 2019 (23. 7 GW versus 8.3 GW) (https://www.eia.gov/todayinenergy/detail.php?id=37952).
The bad news for West Virginia is that the majority of that new generation is from renewables, and little of it is in West Virginia.
Too much of the rhetoric from the fossil fuel industry simply ignores the issue of climate change, as if pretending it does not exist will mean it goes away.
The result is an echo chamber of preaching to the choir, instead of facing reality. How many fossil fuel companies insisted “Our best days are ahead” right up to the day they declared bankruptcy.
Longview’s proposal for a 20-MW solar farm makes long-term economic and environmental sense, but a 1200-MW gas-fired power plant does not.
Of course, America is still a free country, and Keffer and Longview are free to propose more unneeded fossil fuel construction, in spite of the damage it causes to our communities and our environment.
Just don’t ask us to give them tax breaks for it.
Jim Kotcon, Conservation Chair
West Virginia Chapter of Sierra Club
Morgantown, WV 26504
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RSVP — Public Hearing on the Proposed Longview Gas Plant,
Monday, January 6, 2020 @ 5:30 PM, Mon. County Courthouse
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FACT SHEET — Longview Power Proposed Gas-Fired Power Plant | WV Sierra Club, Morgantown, WV
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{ 2 comments… read them below or add one }
A beautiful letter.
The only thing that would improve it would be to spell out why the tax breaks are “possibly illegal.”
PILOT Agreements Cost State Millions in Tax Revenue: An In-Depth Look at Longview Power Plant, Ted Boettner, WV Center for Budget & Economy, October 19, 2019
In West Virginia, there are no rules or laws that govern local property tax abatements or PILOT agreements. If fact, there is a pending lawsuit questioning whether even property tax abatements are even legal under our state constitution. That said, there are best practices that can help increase transparency, reduce waste, and ensure a more democratic process in the abatement process. These include:
1. Giving school boards decision-making power over approving PILOT agreements and tax abatements including negotiating the PILOT with the interested parties.
2. Ensuring that a portion of collected PILOTs go to affected governments (county, municipality, schools boards).
3. Granting abatements only when necessary to attract development that would not occur otherwise.
4. Limiting abatements only to areas in need of rehabilitation or redevelopment and to those that maximize beneficial outcomes (Emphasis should be on infrastructure improvements, creation of quality jobs, revenue gains from other sources, and anticipated improvements in surrounding areas).
5. Limiting the number of years of the abatement that is necessary to attract the development sought.
6. Conducting a cost-benefit analysis to ensure that the deal is worthwhile over the short- and long-term of life of the project, including the forgone property tax revenue over the term of the PILOT agreement.
7. Including appropriate enforcement mechanisms, including claw-back and recapture provisions, job creation requirements, and the imposition of penalties or other measures to ensure for when the developer fails to fulfill its obligations.
8. Ensuring that the state plays an active role in the abatement process by increasing guidance on granting and implementing property tax abatements, including disclosing all PILOT agreements online, their impact on the state budget, and increased monitoring of local property tax abatements.
To improve the accountability and transparency of PILOT agreements and the resulting tax abatements, it is imperative that the public, and especially local schools boards that rely on about two-thirds of all property tax revenues, has the tools needed to approve or disapprove PILOT agreements and to evaluate their short and long-term impact.
At the very least, PILOT agreements in West Virginia, especially those where almost all of the economic impact happens during construction, like Longview Power, should require that the new tax revenue from the project exceeds the property tax abatement and that there are job creation and retention requirements.The assessments should also include the value of foregone revenue for local and state governments.
While there have been several economic impact studies of the Longview Power Plant, and the other new gas-fired power plants that have received PILOT agreements, those studies should be conducted by neutral third-parties instead of the companies themselves. When companies or the local economic development authorities pay for these economic impact studies it can create a perverse incentive which can lead to inflated expectations and the loss of more tax revenue.
https://wvpolicy.org/pilot-agreements-cost-state-millions-in-tax-revenue-an-in-depth-look-at-longview-power-plant/