WV lawmakers have concerns with Morrisey admin's economic development oversight

Addressing the Joint Government and Finance Committee at Stonewall Resort State Park in Lewis County, Office of Energy Director and Department of Commerce Deputy Secretary Nicholas Preservati said the state Department of Economic Development is finalizing a comprehensive review of economic development “from top to bottom.�

The Department of Economic Development is slated to operate under the Department of Commerce starting July 1, per House Bill 2008, requested and signed into law by Gov. Patrick Morrisey. HB 2008 will rebrand the department as the Division of Economic Development under the Department of Commerce.

“We've been instructed to push as fast and as hard as we can on an energy policy that incorporates our baseload generation,� Preservati said, adding that that direction encompasses coal, gas and nuclear. “We’re pushing hard on that.�

'It's all about the sites'

Preservati said state economic development is being pursued with a focus on technology, energy and advanced manufacturing.

Preservati reported that West Virginia has received an “overwhelming response� from companies looking to work with utilities and establish a microgrid following state passage of HB 2014, a Morrisey-requested bill aimed at easing in-state data center development in part by facilitating development of microgrids.

HB 2014 has drawn the ire of local government officials and advocates. It prohibits counties and municipalities from enforcing or adopting ordinances, rules or regulations that limit creation, development or operation of any certified microgrid district or high-impact data center project. The law eliminated a requirement that electrical service to business development districts be generated from renewable sources.

Preservati said Oak Ridge National Laboratory, a federally funded research lab managed by nonprofit UT-Battelle LLC for the Department of Energy in Tennessee, is working with West Virginia officials to “help us do our data centers.�

Echoing what HB 2014 proponents asserted during the legislative session, Preservati said “speed to power� — how quick the path is to connecting to a power grid and becoming operational — is top of mind for prospective data center developers.

“So, the biggest thing that we've heard from them is we need to be as a state able to move with them on site readiness,� Preservati said. “It's all about the sites.�

Preservati admits companies 'being very frustrated'

Preservati reported that state officials had whittled a list of 100 priority sites down to 10 to each be allotted $75,000 site-readiness grants for economic development. He noted the state has another $50 million available that had been set aside for a forgivable loan for Cleveland-Cliffs to reopen an idled plant in Weirton to make steel for electric grid transformers before the company pulled the plug on its plan this spring.

But Preservati said he didn’t know when he anticipated announcing the 10 sites, responding to a question from House of Delegates Finance Committee Vice Chair Clay Riley, R-Harrison.

The state needs to determine its financing priorities, what kind of investment method (such as grants or loans) it intends to use and whether to focus on emerging or more established companies, Preservati said.

Riley said he had heard from “a couple� of companies that they “can’t get answers on their investments out of the executive branch.�

“They’re not getting a final decision,� Riley said.

“I believe there are some instances where final decisions have not been made, and I will tell you that the Governor’s Office is well aware of that issue,� Preservati said. “They're well-aware of some of the companies being very frustrated and wanting those decisions, and we're working as quickly as we can to get them out.�

Riley expressed concern in response, saying he knew of at least two companies that had “walked away from West Virginia.�

“Obviously, they're making hundreds of millions of dollars in investments,� Riley said. “When they're trying to get a final decision, that becomes very frustrating.�

Riley indicated banking industry sources had reported they couldn’t get a state decision on underwriting, deterring them from filing applications.

Senate President Randy Smith, R-Preston, said West Virginia lost one business to a neighboring state because it “couldn’t get anybody to call back.�

“I’m hoping it was just because of the transition of power,� Smith said, alluding to the Morrisey administration’s January takeover. “It kind of concerned me that we couldn’t get anybody back from the Governor’s Office to contact them.�

“I don't know anything about that,� Preservati said, adding that he would look into the issue “because I think we all agree we have to call people back.�

Preservati contested an observation from House Finance Committee Chair Vernon Criss, R-Wood, that the Morrisey administration “sounds like you’re trying to reinvent the wheel again, because you had a change in administration.�

“But what we are doing is saying, the projects from the previous administration in a pipeline, are they part of a comprehensive, cohesive strategy? Do they work for West Virginia? And we're reviewing that,� Preservati said.

No project has been rejected, Preservati said, adding that Department of Economic Development staff have been participating in the review.

“But we do feel like we have to be a little more focused,� Preservati said, “with more of a direct strategy.�