What the Century Case Can Teach WV Politicians, If They Will Learn

I have focused Century Aluminum’s attempt to get West Virginians to pay its Ravenswood smelter’s electric bill, because the case illustrates so much of what is wrong with our state’s political and regulatory approach to electricity.

Here are three important questions that the Century case raises, and no one in the media is talking about:

  1. Why is the most important issue restarting a plant that is very inefficient and uses technologies that are, in many cases, 30 years old, instead of creating investment in innovation and future industrial development?
  2. Why isn’t increasing the electrical efficiency of the Ravenswood plant the highest priority for WV’s political leaders and the PSC, before anyone offers Century rate or tax breaks?
  3. Are there other industries and technologies that WV should be encouraging with special deals, instead of trying to resuscitate a dead plant owned by a company that is extorting special treatment from our state’s citizens?

So, question 1.  It appears that WV politicians are continuing to pursue their policies of looking backward to recreate some kind of past industrial glory instead of building a strong economy based on current and future realities.  New technologies for recycling waste heat and building energy efficiency into manufacturing apparently have no place in WV, although they are at the forefront of business development around the US and the rest of the world.  In addition, waste heat recovery and efficiency provide businesses with new profit centers for their existing business.  Instead of supporting combined heat and power technologies that would create hundreds of new good paying jobs across WV, Gov. Tomblin and Sen. Manchin are settling for 350 jobs, maybe, in Ravenswood with an out of state company that has clearly demonstrated that it doesn’t care anything about West Virginia or its citizens.

Question 2 is related to question 1, but it is a little different.  In the last legislative session, the WV Legislature rushed to cut taxes revenue from on the coal industry as an indirect subsidy from all WV tax payers to Century Aluminum.  Wouldn’t common sense have dictated that legislators first require Century to do everything it could to reduce electricity use, and therefore the electric bills we all will have to pay for Century, before they gave our money back to the coal industry used it as a gift to Century and APCo?  It seems like a no-brainer to me, but then again, I’m not a legislator.

And question 3.  Why aren’t WV’s political leaders focusing on building markets for the cutting edge companies around the US that are champing at the bit to do new energy recycling projects in WV’s old and wasteful manufacturing plants?  Here is a link to one of the earliest posts on The Power Line about Recycled Energy Development’s project to recapture process heat at the Alloy plant near Gauley Bridge.  That project, ready to go in 2010, has not happened because AEP’s APCo won’t buy power from the project, and the WV Legislature has not changed our state law to require our Ohio-based power monopolies to buy power from recycled energy producers.  That’s all it would take.  One new law to create standard offer contracts, and the Alloy project could move forward.  We’re still waiting.

WV’s Ohio-based electric companies may object, as has WV Consumer Advocate, that standard offer contracts will raise WV electric rates a little bit.  So, how much is the Century fiasco going to cost WV rate payers?  How much will the new coal plant capacity being dumped on AEP and First Energy consumers cost?  It’s time to stop the wishful thinking about electricity in WV and start doing the math about energy efficiency.

We’re still waiting for real innovation and real business development that is growing elsewhere, because WV’s political leaders are stuck on their nostalgia trip of resuscitating dead plants.  The rest of us need to push them for change — and push hard, because it is clear they can’t figure it out for themselves.

3 thoughts on “What the Century Case Can Teach WV Politicians, If They Will Learn

  1. Excellent reading for all our elected officials!

    The way I read the legislation is that the severance tax credit ends up in AEP’s pocket. Instead of the coal companies paying the tax to the state for distribution to localities, they would pay it to AEP as a credit toward Century’s electric bill. The only perk the coal industry got out of it is some outrageous “administrative fee” of something like 3% of the $30M. In addition, that’s $30M EVERY YEAR, and if it’s not all used, it can be carried over to a succeeding year, making future year credits higher than $30M. It’s in AEP’s best interests to make sure energy efficiency at Century isn’t explored. It would cut their profits.

    It’s a big, ridiculous drain of consumer funds at a time when they can least afford it. Shame on our legislators who passed this bill without completely understanding it or allowing their “understanding” to be spoon-fed to them by industry lobbyists.

    • Yes, Keryn, you are right that the coal industry will essentially pay the same amount they were paying before. But instead of that severance tax revenue going to the state budget, it will go to APCo. That means all WV tax payers, including people like us who are not APCo rate payers, get to share in this boondoggle for Century.

  2. So, now APCo = WV state tax department.

    Bravo! That was pretty slick!

    And APCo postures in the press about how they are on the side of ratepayers…. nice touch!

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