MVCAC January 2020

mvcac@lists.osenergy.org

1 participants
10 discussions

Airborne measurements point to low EPA methane estimates in south central US | Penn State University
by Duane Nichols via MVCAC 27 Jan '20

27 Jan '20

Airborne measurements point to low EPA methane estimates in south central US | Penn State University, January 27, 2020 In prior research, Barkley determined EPA estimates for methane from natural gas facilities were also low in a portion of Pennsylvania’s Marcellus Shale region. https://news.psu.edu/story/605629/2020/01/27/research/airborne-measurements…

1 0

Appalachian Stewardship Foundation & Longview Power, LLC
by Duane Nichols via MVCAC 27 Jan '20

27 Jan '20

DOMINION POST OPINION 26 JANUARY 2020 “APPALACHIAN STEWARDSHIP FOUNDATION” By LARRY HARRIS, ASF Chairman In response to a recent article that appeared in The Dominion Post on January 16th, the Appalachian Stewardship Foundation (ASF) would like to correct several inaccuracies. ASF is an independent 501(c)3 grant-making foundation. ASF activities are funded in the amount of $500,000 per year through 2021, and $300,000 thereafter by the terms of a settlement agreement of a 2004 legal challenge to the air quality permit of Longview Power, LLC. The three environmental groups challenging the permit — Trout Unlimited, Sierra Club and National Parks Conservation Association — entered into the settlement, as did Longview Power, LLC. All parties at the table signed and accepted the terms of legal settlement agreement. The environmental result of that challenge process was a cleaner plant: lower SO2 (sulfur dioxide), NOx (mono-nitrogen oxides) and particulate emissions, the first mercury monitor on a coal-burning plant. That has led to less pollution within the heavily populated area immediately surrounding the plant, West Virginia as a whole and across its neighboring states. The other outcome of the legal permit challenge process was the funding by Longview Power, LLC of the Appalachian Stewardship Foundation, with an independent governing structure of one voluntary board representative each to be appointed from the three environmental groups as well as one non-voting board representative each from Longview and AMD Reclamation. The funds would be used to: @ Reduce greenhouse gases; @ Restore streams and fisheries; @ Promote public awareness; @ And create innovative carbon-reduction research and projects, including programs directed at the reduction, offset, sequestration, mitigation and storage of carbon dioxide and other greenhouse gases. The geographical range of the foundations’ activities includes West Virginia, parts of Virginia, Maryland and Pennsylvania. Since its first granting round in 2012, ASF has received $4 million from Longview Power and approved grants totaling over $2.2 million to groups across West Virginia and Virginia through our twice annual grant distribution process. A description of that grant process and a complete list of those grants awarded to date is available on the ASF website at appalachianstewards.org A statement (contained in an internal email from Longview’s president and CEO) that ASF has paid $1.2 million to lawyers, individually or collectively, is false. ASF has not paid legal fees to any lawyer. As noted, the terms of the legal settlement provide for $500,000 annually for the first 10 years ASF operates, and then a drop down to $300,000 annually thereafter, for the life of the Longview plant. ASF has set aside a portion of its annual funding to date to establish an endowment fund to mitigate against that 11th year drop. This fiscally responsible setaside, now totaling just under $1.6 million, will ensure that ASF is able to continue granting at its current levels even after funding from Longview decreases, and will ensure that the environmental work ASF supports will continue into the future. ASF has not, nor will it, take a position on the expansion of generating capacity at Longview. Monies from Longview do not pass through other groups before arriving at ASF. In addition, ASF is not funded through tax dollars or public funds of any sort. We are happy to have the opportunity to share the above information. >>> LARRY HARRIS, Ph.D., is chairman of Appalachian Stewardship Foundation’s Board.

1 0

Letter to Editor: All parties should study report on PILOT deals
by Duane Nichols via MVCAC 18 Jan '20

18 Jan '20

Letter to Editor: All parties should study report on PILOT deals >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Letter to the Editor, Morgantown Dominion Post, Submitted January 16, 2020 Mon County is Losing Millions in Tax Revenue, Exposed to Power Plant Emissions An in-depth look at the PILOT agreement for the Longview Power plant that is now operating has been performed by Ted Boettner, Director of the WV Center on Budget & Policy. This was published to their web-site on October 15, 2019. PILOT is the “payment in lieu of taxes” agreement approved by the Monongalia County Commission back in 2003. According to the analysis, the tax abatement (taxes not collected) is estimated at $457 million over 30 years. The proposed new Longview II power plant tax abatement that might be approved by the Monongalia County Commission, would forgive $217 million over 30 years. Thus, the total tax abatement for Longview according to Boettner is $674 million. Everyone should read and study the document on the web-site of the West Virginia Center on Budget & Policy as it covers PILOT agreements in general. It is about 10 pages long. And, this document contains eight (8) guidelines or “best practices” that can help increase transparency, reduce waste, and ensure a more democratic process in the abatement process. The Monongalia County Sheriff, the School Board and the County Commission should study and use the facts and information in the above referenced document if approving another PILOT agreement, in the best interest of the public health and welfare. This is the reference: “PILOT Agreements Cost State Millions in Tax Revenue: An In-Depth Look at Longview Power Plant,” Ted Boettner, October 15, 2019. The source is: https://wvpolicy.org/pilot-agreements-cost-state-millions-in-tax-revenue-an… The Mon Valley Clean Air Coalition is concerned about putting another large power plant where so many will be affected, the Ft. Martin community, Maidsville, Star City, Stewartstown, Cheat Lake area, Pt. Marion, etc. Already we have over 300 diesel trucks per day on the Ft. Martin hill. The location of University High School and all the health care facilities of Mon General Hospital and the WVU Hospital system are downwind and subject to concerns especially during adverse weather conditions as thermal inversions in the atmosphere. My information is that the proposed new Longview II power plant will have emissions of over 10 tons per year of “hazardous air pollutants” (HAPs), 200 tons per year of fine particulate matter (PM), 500 tons per year of “volatile organic compounds” (VOCs), and 4 million tons per year of greenhouse gases, based upon data from the WV Department of Environmental Protection. All this would add to the even greater emissions from the existing Longview I and Ft. Martin coal fired power plants. We don’t want over 35 thousand residents and 35 thousand students to be exposed to these conditions. Duane G. Nichols, Stewartstown, WV 26508 > A truncated or edited version appears today in the Morgantown Dominion Post, as letters are limited to 300 words. > SEE ATTACHMENT > >

1 0

Meet the woman who first identified the greenhouse effect
by Duane Nichols via MVCAC 12 Jan '20

12 Jan '20

https://www.climatechangenews.com/2016/09/02/the-woman-who-identified-the-g… Meet the woman who first identified the greenhouse effect Article by Megan Darby, Climate Change News, 02/09/2016 Eunice Foote demonstrated the heat-trapping properties of carbon dioxide at a scientific conference in 1856, newly digitised records show Irish physicist John Tyndall is commonly credited with discovering the greenhouse effect, which underpins the science of climate change. Starting in 1859, he published a series of studies on the way greenhouse gases including carbon dioxide trapped heat in the Earth’s atmosphere. A recently digitised copy of The American Journal of Science and Arts suggests a woman beat him to it, however. It includes a presentation by Eunice Foote to a top US science conference in 1856. She describes filling glass jars with water vapour, carbon dioxide and air, and comparing how much they heated up in the sun. “The highest effect of the sun’s rays I have found to be in carbonic acid gas,” she writes, using the contemporary term for carbon dioxide. “The receiver containing the gas became itself much heated – very sensibly more so than the other – and on being removed, it was many times as long in cooling.” She goes on to speculate that concentrations of carbon dioxide in the air could influence global temperatures. “An atmosphere of that gas would give to our earth a high temperature; and if as some suppose, at one period of its history the air had mixed with it a larger proportion than at present, an increased temperature from its own action as well as from increased weight must have necessarily resulted.” Climate scientist and communicator Katharine Hayhoe found Foote’s contribution after a colleague asked why there were no women in the history of the discipline. Her interest piqued, Hayhoe has approached local historians and Foote’s descendents through a family history website to try and find a picture of her or more information. Foote’s results were not definitive, Hayhoe says, with too many uncontrolled factors in the experiment. She could not have anticipated that atmospheric CO2 levels would rise from 290 parts per million at the time to 400ppm, prompting a global crisis. Still, her hypothesis was prescient and a version of her experiment is used to teach high school children today. “There was a bit of luck involved,” says Hayhoe, “but I think it is amazing that she connected the dots and came to a conclusion that subsequent science has proved to be correct.” Hayhoe is not the first to resurrect Foote’s legacy. In 2011, independent researcher Raymond Sorensen got an article published in the journal AAPG Search and Discovery. He relied on an observer’s account of Foote’s presentation, not having access to her own words. The report, by a David Wells in the Annual of Scientific Discovery for 1856, hints at how unusual it was for a woman to appear at such a gathering. It states: “Prof. Henry then read a paper by Mrs. Eunice Foote, prefacing it with a few words, to the effect that science was of no country and of no sex. The sphere of woman embraces not only the beautiful and the useful, but the true.” Eunice Foote, born Newton, would have been unlikely to get the opportunity without the support of her husband, Elisha Foote. Judging by the related paper Elisha presented at the same conference, it seems the married couple worked together. They feature in The Road to Seneca Falls, an account of the women’s rights movement of the time. Elisha was a judge specialising in patent law and patented several inventions himself, according to author Judith Wellman, including a skate, drying machine and a reaping and binding machine. Eunice patented a “filling for soles of boots and shoes” in 1860. Tyndall does not appear to have heard of Foote’s work when he started on a similar line of inquiry. His publications are more extensive and include accurate quantification of how much different gases absorbed infrared radiation – “radiant heat” – from the sun. “With the exception of the celebrated memoir of M. Pouillet on Solar Radiation through the atmosphere, nothing, so far as I am aware, has been published on the transmission of radiant heat through gaseous bodies,” he wrote when presenting his initial results to the Royal Society of London in 1859, as cited by Sorensen. “With regard to the action of other gases upon heat, we are not, so far as I am aware, possessed of a single experiment.” It can be hard to assess claims of priority in science, says Sorensen, particularly if work is not in the public domain. But he adds: “It is clear that Eunice Foote deserves credit for being an innovator on the topic of CO2 and its potential impact on global climate warming.”

1 0

Living on Earth: This Week's Show
by Duane Nichols via MVCAC 11 Jan '20

11 Jan '20

AUSTRALIA’S WILDFIRES POINT TO THE FUTURE (PRI: Living on Earth) Australia is in the throes of its worst fire season in modern history. As thousands of homes are incinerated and an estimated billion animals perish, the world is getting a glimpse of our future in a warming world. Penn State University climatologist Michael Mann joins Host Steve Curwood from Sydney, where he is taking a sabbatical to study the influence of climate change on extreme weather events. Prof. Mann explains the clear link between climate disruption and wildfire disasters, and discusses Aussies’ frustration with the response of their government to the climate crisis. (13:48) Living on Earth: This Week's Show, January 10, 2020 http://www.loe.org/shows/shows.html?programID=20-P13-00002

1 0

GREEN Newsletter, Volume 30 Issue 1
by Duane Nichols via MVCAC 10 Jan '20

10 Jan '20

West Virginia Environmental Council, Box 1007, Charleston, WV 25324 GREEN Newsletter, Volume 30 Issue 1, January 10, 2020 https://wvecouncil.org/green-volume-30-issue-1/

1 0

Write your letter or make your online comments now: Longview II
by via MVCAC 06 Jan '20

06 Jan '20

So I got back a little while ago from the Public Service Commission's hearing about Longview II (or Son of Longview, as I think of it) in Morgantown at the Mon County Courthouse. The PSC has received only SIX letters or online comments opposing the plant and 103 letters and comments in support of the plant. So now is the time for you to submit a comment or letter, the PSC will accept them until late January when they have evidentiary hearings, so please, do it now! File a Letter of Protest with the WV Public Service Commission or File a Comment Online and ask that the Certificate of Site Approval be denied as it is written now. Please be sure to reference Case # 19-0890 in your letter or comments and state you are opposed (you are filing a 'letter of protest'). * Mail letters to (and don't forget to mention Case # 19-0890): * Ms. Connie Graley, Executive Secretary * West Virginia Public Service Commission * 201 Brooks St * Charleston, WV 25301 * Or Comment Online Protesting Case Number 19-0890 at: http://www.psc.state.wv.us/Scripts/OnlineComments/formalComments.cfm?CaseID= 73056 <http://www.psc.state.wv.us/Scripts/OnlineComments/formalComments.cfm?CaseID =73056&CaseNumber=19%2D0890%2DE%2DCS%2DCN> &CaseNumber=19%2D0890%2DE%2DCS%2DCN Things you may want to consider as you write your letter or comment: * Why are we subsidizing a fossil-fuel plan that will be obsolete by the time it comes online? Rather, let's put all of our hard-earned tax money into renewable energy, which is growing faster and becoming cheaper than gas-fired generation. Gas plants will soon be what coal plants are now: obsolete. Longview II proposes a little bit of solar generation (mostly in Pennsylvania) so it can pretend it cares about the environment. As one of the speakers tonight said at the PSC hearing, "This is Greenwashing." * Why are we, Mon County and state taxpayers, giving a tax break to this for-profit company to build an antiquated power plant? ... especially when this same company has already bilked us for many millions of dollars? Read this West Virginia Center on Budget & Policy article for the facts about why giving tax abatements (tax breaks) to Longview II through a payment in lieu of taxes (PILOT) scheme is a bad idea: https://wvpolicy.org/pilot-agreements-cost-state-millions-in-tax-revenue-an- in-depth-look-at-longview-power-plant/. The Mon County Commission has not even released the final PILOT agreement. No one has calculated if the last PILOT we gave Longview was worth it. There is no transparency and no accountability. West Virginians are poor. We should not be giving corporate welfare to rich, for-profit companies polluting our air and water to produce electricity for people outside our state. * West Virginia generates three times more electricity than it consumes: we should not be subsidizing electricity for people and business outside our state. We don't need the electricity here in Mon County or in West Virginia. We already generate much more power than we use. The Beechurst plant may stop burning coal, but it will burn gas and continue to operate. Fort Martin isn't going anywhere soon. Longview II will not replace the Fort Martin Power Plant (which, by the way, is in West Virginia, nor Pennsylvania). Proponents of the original Longview said Longview I would do that, but the Fort Martin Power station is still operating over 20 years past it's designed life expectancy. Huge coal-fired power stations still operate just north of us in Masontown, PA and south of us in Harrison County, WV. Other, smaller power stations are all around us. * The "gas is clean" argument does not hold up. Natural-gas extraction has adverse real-time consequences for West Virginians in addition to climate change. From polluted air and water near well pads and compressor stations to constant noise and dangerous roads. Once again people in West Virginia pay the price, with their taxes and their lives, for dirty electricity used outside our state. The Dominion Post constantly publishes Longview's BS line about how their current coal-fired facility is so clean and wonderful (the cleanest in the universe), when in reality, Longview took our money and went bankrupt after its plant cost more than DOUBLE the $900 Million Longview Power said it would cost, and then the plant did not completely function when it eventually came online. Coal-fired Longview finally became fully operational only after many more millions of dollars were sunk into the plant by its creditors, just in time for natural gas prices to plummet and make coal uneconomical. Longview lies. They lied to us before, they are lying now, and they will lie in the future. Longview knows it can get money from us again because we fell all over ourselves to give it money last time. Yes, we are suckers. As the saying goes, "Fool me twice, shame on me." We are being fooled again. Please, write the letter. -paula

1 0

Satellite Images Show Australia's Devastating Wildfires From Space – NASASPXA.COM
by Duane Nichols via MVCAC 04 Jan '20

04 Jan '20

https://nasaspxa.com/2020/01/04/satellite-images-show-australias-devastatin… From Kathryn Madison, Facebook, Morgantown, WV, January 4, 2020 NASA operates a group of 26 satellites collectively known as the Earth Observing System (EOS), and its flagship satellite, a bus-sized spacecraft named Terra, hit its 20-year mark in space in December 2019. Other NASA satellites, like Aqua and Suomi NPP, also contribute data to EOS, a mission tasked with taking global measurements of the air, land and water to help scientists learn how those systems fit together and morph over time. The Worldview tool from NASA’s EOS Data and Information System transforms satellite data into an interactive page with over 900 imagery layers. You can view current natural disasters, like the Australian wildfires, on Worldview by date and information layer (such as thermal anomalies, borders and place labels). You can also watch an animation of activity by selecting a time range.

1 0

Longview can build power plant, but shouldn't get tax breaks | Opinion | wvnews.com
by Duane Nichols via MVCAC 03 Jan '20

03 Jan '20

https://www.wvnews.com/statejournal/opinion/longview-can-build-power-plant-… Longview can build power plant, but shouldn't get tax breaks The December 2nd editorial by Jeffrey Keffer 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

1 0

» PILOT Agreements Cost State Millions in Tax Revenue: An In-Depth Look at Longview Power Plant
by Duane Nichols via MVCAC 02 Jan '20

02 Jan '20

Longview Power Proposed Gas-Fired Power Plant | Sierra Club Position — What you can do: File a Letter of Protest with the WV Public Service Commission. Ask that the Certificate of Site Approval be denied unless Longview installs carbon capture to reduce emissions of greenhouse gases. Be sure to include the reference to Case # 19-0890. Mail letters to: Connie Graley, Executive Secretary, West Virginia Public Service Commission, 201 Brooks Street, Charleston, WV 25301. Or file comments Protesting Case Number 19-0890 on line at: http://www.psc.state.wv.us/scripts/onlinecomments/default.cfm Attend the Public Hearing. The PSC will hold a public hearing on Monday, Jan. 6, 2020 at 5:30 PM at the Monongalia County Courthouse, 243 High Street, Morgantown. You can present your comments in person at that time. SEE THE FACT SHEET DOCUMENT ONLINE ..... https://www.sierraclub.org/west-virginia/longview-power-proposed-gas-fired-… ######################################### https://wvpolicy.org/pilot-agreements-cost-state-millions-in-tax-revenue-an… PILOT Agreements Cost State Millions in Tax Revenue: An In-Depth Look at Longview Power Plant By Ted Boettner, WV Center on Budget & Policy, October 15, 2019 Over the last decade or so, local governments entities in West Virginia have used a myriad of business property tax incentives to reward or induce local economic development projects. These can include tax increment financing or TIFs, lease agreements, tax credits (e.g. local B&O), issuing bonds to purchase property, and the use of Payment in Lieu of Tax (PILOT) agreements. A PILOT agreement is a property tax abatement where a company (sometimes a non-profit) agrees to make annual payments to local governments instead of paying the property taxes it would normally owe. Usually these payments are just a fraction of what otherwise would have been paid over the time of the PILOT agreements or a fixed percentage of property taxes owed. While it is unknown how many PILOT agreements and property tax abatements exist in West Virginia and what their impact is on our revenue systems or economic development, there are several options that policymakers can pursue to provide the accountability and transparency needed to discern whether they are a sound use of public funds. PILOTs in West Virginia The way PILOTs usually work in West Virginia is that a government entity – usually the county or a local development authority, but sometimes the WV Economic Development Authority – purchases the property (sometimes by issuing revenue bonds) to be developed and then enters into a long-term lease with the company when construction begins. Since ownership of the property is with a government entity or economic development authority (and pursuant to WV Code §7-12-10 or §8-19-4), it is exempt from real and personal property taxes (along with the leasehold interest). Instead of paying property taxes, the company agrees to make annual payments to local governments – including the school board, the country commission and municipality (if applicable). The terms of the payments can differ greatly depending on the size of the project and the negotiation that takes place with the interested parties. Over the last several years, some of the largest business expansions or new operations have included PILOT agreements as part of a package of business economic development incentives. For example, a proposed PILOT agreement between Jefferson County government officials and Rockwool (a controversial insulation manufacturer) in Ranson, WV included an agreement where the local economic development authority would purchase $150 million worth of property to build the plant by selling revenue bonds that Rockwool would then make payments on so they would not have to pay property taxes (although the terms on this deal have changed). Neighboring Berkeley County has signed several PILOT agreements with companies, including Quad Graphics (commercial printer), Macy’s (warehouse and distribution center), Procter & Gamble (product manufacturer), Knauf Insulation (insulation manufacturer), and Argos (cement factory). For most of these PILOT agreements, the WV Economic Development Authority has issued billions in revenue bonds to purchase property that is leased back to these companies so they do not have to pay property taxes. More recently, there have been a flurry of PILOT agreements made between local governments and electric power plants in Harrison, Brooke and Monongalia County. In June of 2003, Monongalia County officials, including the Mon County Commission, Sheriff’s Office, Assessor, and Board of Education and Mon County Development Authority signed a PILOT agreement with Longview Power on a $2.2 billion coal-fired power plan. The agreement provided a 100% abatement of property taxes in exchange for $105 million in payments over a 30 year period. More recently, Longview Power is negotiating a new PILOT agreement in Mon County for a $1.1 billion expansion that includes a 1,200 megawatt natural gas fired power plant and 50 megawatt solar installation (located close to their plant in Pennsylvania). Transparency & Accountability of PILOT Agreements There is very little in the way of transparency or accountability with regard to local property tax abatements or PILOT agreements, including how much revenue the state or local governments lose each year. In the executive state budget released every year, there is a section on the estimated forgone revenue from economic development tax expenditures (page 75), but according to the budget report, “no accurate estimate is available for county-imposed payment in lieu of tax (PILOT) arrangements. Based on available PILOT payment data, however, the net PILOT tax expenditure is likely similar in magnitude to the value associated with certified capital additions.” If that’s true, these agreements cost the state over $40 million per year. When it comes to PILOT agreements in West Virginia, there is not only very little transparency but there is no evaluation of these property tax abatements at the state or local level. Unlike some of the state business tax credits that have capital investment and job creation requirements, and claw-back or recapture provisions, these requirements do not exist for local property tax abatements. A new accounting rule from the Government Accountability Standards Board (GASB) – Statement Number 77 – is supposed to require local government entities that use General Accounting Acceptable Practices (GAAP) to disclose annually the yearly lost revenue from “tax abatements” (aka corporate tax breaks in the name of economic development). While many counties and school boards discuss GASB 77 in their annual audits, few if any estimate the tax revenue lost from these abatements. For example, neither Berkeley or Jefferson County estimate the tax revenue forgone from the PILOT agreements mentioned above in their annual audits. And the school boards don’t fare much better. In Monongalia County School Board’s 2018 audit, the PILOT agreement with Longview Power is mentioned under “tax abatements” but the audit says “property tax revenues were reduced by an unknown amount.” A recent WV Supreme Court case brought by coal companies challenged whether some PILOT agreements were in the “public interest” because local governments failed to disclose the forgone property tax revenue from these property tax abatements. Longview Power PILOTs While state and local governments do not disclose the forgone revenue from these agreements, it is possible to estimate the value of the tax expenditure by looking at what Longview would be paying if it paid the same tax rate as most businesses in Mon County. The chart below looks at the value of PILOT payments from Longview Power’s first PILOT agreement (Longview #1) and the second PILOT agreement proposal (Longview #2) over the life of the agreement. These estimates are based on the capital investments in each project ($2.2 billion and $1.1 billion, respectively), an average annual depreciation rate of 2.76% on public power utilities in West Virginia, and Class 3 Mon County property tax rates (2.08% in FY20). The difference in PILOT payments and the estimated property taxes owed without the abatement is stark. The estimated tax abatement for the first Longview Power PILOT agreement is $457 million compared to $217 million for the second proposed PILOT agreement with Longview Power. Altogether, the property tax abatement over 30 operating years for both PILOTs is estimated to be $674 million. These estimates should be taken with caution because the assessed valuations of the property could vary significantly depending on the depreciation rate used for the property and capital improvements over time. According to an economic impact analysis (paid for by Longview Power) of the proposed project that includes a 1,200 MW natural gas-fired combined cycle turbine power plant and a 70 MW utility scale solar power facility, it will create 628 permanent jobs and 5,002 job-years during the 3-year construction phase of the project (or an average of 1,667 job per year for three years). Based on the above estimates (which is very debatable), this adds up to 794 full-time jobs per year over the 30 years of the PILOT agreement. This means that the cost of the property tax abatement amounts to an estimated $273,000 per job created. To put this in perspective, the state’s Economic Opportunity Tax Credit program has a cost of just $25,000 per job created. It is important to keep in mind that the estimated employment impacts of this proposed project are jobs not just within West Virginia or to local workers. Only a share of the new jobs (30%) will be to local workers, with many construction workers working temporarily in West Virginia on the project. And the permanent full-time jobs estimated (628) rely on a very high multiplier (for every one direct job created 16 other jobs will be created). Like all economic impact analysis that uses models (IMPLAN), the results are based on the economic assumptions being made and what is included in the “black box” to inform the results. Furthermore, no economic analysis is complete until it also includes a fiscal impact analysis. This should include an examination of the the costs of direct public services (e.g. schools, waste water, etc.) generated by the project and population growth, the cost of expanded infrastructure capacity required to handle the new business activity and population, and the cost of the tax incentives themselves on public services. IMPLAN models do not provide these types of cost feedbacks. While it is difficult to compare the property tax owed by similar plants in surrounding states, a close look at two new gas-fired power plants in Pennsylvania reveal that similar plants do not pay much in property taxes. For example, the Caithness Moxie Freedom Generating Station in Salem Township in Luzerne County Pennsylvania, which is a new $1 billion 1,000 megawatt gas-fired power plant that went online in 2018, had an assessed value of $42.5 million and a total property tax bill of just $752,000. Meanwhile, a new 940 megawatt gas-fired power plant in Westmoreland County Pennsylvania that had a direct construction cost of around $500 million with 24 full-time employees was assessed at just $1.9 million in 2019 with a total property tax bill of just $179,000. The Lordstown Energy Center operates a 940 megawatt gas-fired power plant in Ohio that went online in 2018 and received a 100 percent tax abatement for 15 years while having to make annual payments that total $19 million over 15 years. One reason for the low amount of assessments and taxes paid by these facilities in Ohio and Pennsylvania is because these state do not tax business personal property. Another new gas-fired power plant owned by Duke Energy in Anderson County, South Carolina (W.S. Lee Station) is estimated to pay $4.4 million in taxes in 2019. The W.S. Lee is a 750-megawatt plants that cost an estimated $700 million to construct. Another way to compare the above PILOT payments with property tax payments is to look at what publicly regulated electric power utilities pay in West Virginia. For example, Mon Power owns the Harrison County Power Plant in Haywood, WV, which was built in 1994 and has a assessed value of $210 million and a property tax liability of $4.8 million. The Mitchell Power Plant in Moundsville, WV, which is owned by Wheeling Power (AEP) and is a 1600 megawatt unit built in 1968, has an assessed value of $257 million and a property tax liability of $5.2 million. Best Practices for PILOT Agreements and Property Tax Abatements There are several reasons for the proliferation of PILOT agreements. Property taxes comprise a large share of total state and local business taxes paid in the United States and in West Virginia. In West Virginia, they make up about 36 percent, compared to 39 percent nationally. Unlike the state corporate income tax, which is easier for large corporations to avoid paying by shifting their taxable income offshore (yes, there are ways to fix that in West Virginia), the property tax is harder to avoid. And that’s one reason companies go out of their way to avoid paying it. Often the result is an economic race to the bottom between states (think Amazon HQ2). The best evidence to date shows that economic development incentives don’t play a large role in tipping the decision for companies on where to locate. In exhaustive review of over 30 studies, economist Tim Bartik found tax incentives are the determining factor in location decisions between two and 25 percent of the time. This means in most instances that business location or expansion decisions would have happened anyway. This doesn’t stop companies, however, from doing all they can to shift their business costs on the public and workers. 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. While states and local governments have varying levels of transparency and accountability with regard to property tax abatements, Shelby County Tennessee’s economic development authority called EDGE (Economic Development & Growth Engine) provides a good example of transparency and some accountability of PILOT agreements. Since 2003, EDGE has approved 95 PILOTs and lists each of them on its website. EDGE also requires a cost-benefit analysis before any PILOT can be approved to help ensure that the amount of tax abatements do not outweigh the new tax revenue from the business expansion or relocation and investment. For example, EDGE estimates that its PILOT program has a benefit-to-cost ratio of 2.60, meaning every $1 dollar of tax abated created $2.60 in new tax revenues. 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 forgone 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. Property tax abatements included in PILOT agreements have a significant impact on state and local budgets and they often occur behind closed doors. They can also be highly controversial (see Rockwool). It is incumbent upon our state and local governments to ensure that PILOT agreements and local property tax abatements provide a good investment for our communities. And they must ensure that we are not just shifting costs on to workers and taxpayers for investments that businesses would have made anyway. While state and local government can improve the process for property tax abatements and PILOT agreements by including more transparency and accountability, they should also ask whether alternative development measures such as enhancing local infrastructure, investing in education and job training programs, or undertaking local beautification projects provide a better return on investment.

1 0

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

MVCAC January 2020