West Virginia lawmakers eliminated local authority to regulate data centers and similar projects

Associated Press

3 days ago

In late March, Pamela Moe was at her dining room table, skimming the local paper when something caught her eye.
A legal notice, by a company she had never heard of, for a facility near the city of Thomas.
Curious, Moe looked up the coordinates listed on the ad. She noticed the list of air pollutants the project would release. And then she pulled out her phone, took a photo and sent it out to a group of almost four dozen people all from or around the community, asking them what they knew.
But she soon learned that no one knew anything.
As news of the project spread quickly, so did the effort to learn more.
The community raced to fill in details about the project. They looked to confirm their suspicions that the project was intended to power a data center. Residents reached out to their local, county and state officials.
And as the news reached the broader public, worries also swirled among those who routinely visit Davis and Thomas for their scenic vistas, sprawling trails and dark skies.
But by the time the community had mobilized to get answers, West Virginia lawmakers in Charleston had stripped what little power they had over such a project. Counties lost potential tax revenue. Localities lost oversight. And residents lost a say.
'All of it just dovetailed so neatly and closely, it seems suspicious,' Moe said.
Morrisey and state lawmakers pitch West Virginia as data center haven
In December, months earlier, lawmakers were gearing up for a last minute special session where they could have considered legislation related to a data center project in Logan County. But the session never materialized after confusion on who was allowed to vote following the November election.
Then in February, during his State of the State address, Gov. Patrick Morrisey offered up his economic vision for West Virginia: Data centers, supercomputers and cryptocurrency.
A measure to help aid that vision was introduced into the House of Delegates on March 18, the last day to introduce legislation into the chamber.
Immediately following the day's House floor session, Morrisey held a press conference urging lawmakers to pass the bill, dubbed the Power Generation and Consumption Act, to encourage the development of small local energy grids.
These developments would allow projects like data centers to operate independently instead of connecting to the larger electrical system.
'West Virginia will be the most attractive state in the country for data centers after this bill is passed,' Morrisey said.
A few hours later, an air permit application for a natural gas-fired power plant in Tucker County landed in the inbox at the West Virginia Department of Environmental Protection's Division of Air Quality.
Days later, the House Energy Committee took up the bill, approved an amended version and sent it to the floor for a vote.
In the bill, lawmakers diverted all the tax revenue from such projects to the state, leaving local governments without. Lawmakers also forbid local communities from restricting noise, lighting, or land use, stripping residents of any authority.
News of data center and Morrisey's bill raise questions in Tucker County
As the committee was wrapping up its late March meeting in Charleston, a Tucker County postman delivered Moe her newspaper with the public notice by the Virginia-based Fundamental Data LLC.
'I didn't get to read the rest of the paper right away because that just really spurred me into action,' Moe said.
Moe, who's been involved in environmental efforts for decades, had never heard of the company, but she had heard of the air pollutants. She also was familiar with the project's proposed location between the towns of Thomas and Davis.
She emailed out a picture of the ad to environmentalists, business owners and other residents, asking them what they knew. Then Moe sent the full 77-page permit application, following up with a brief three-page analysis.
The proximity of the project to the towns of Thomas and Davis worried Marilyn Shoenfeld, one of the email recipients. So, early the next morning, Shoenfeld, president of the West Virginia Highlands Conservancy, called the mayor of Davis to find out what he knew.
Except, he also didn't know anything, and neither did other officials.
'From a local leadership standpoint, none of us were aware that this was even a possibility,' said Al Tomson, mayor of Davis.
But, the news was quickly spreading through the community, and so were the concerns.
Sheena Williams stressed about the air pollution's impact on her asthmatic daughter. Joseph Lewandowski worried how the project would harm the protected and public lands treasured by both its residents and visitors. And almost everyone was alarmed about how little information there was.
They knew that the application was for a natural gas-fired power plant independent of the electric grid, but not much else.
The number of combustion turbines wasn't identified. The types of air pollution control devices weren't listed. And the sources and types of fuel were missing. The company had redacted those details on its permit application, citing business confidentiality.
'That's the main gripe I think most people have with this — all the redactions and just the lack of transparency,' said Lewandowski, a Thomas native.
The project's independence from the grid, along with the company's name, fed suspicions that the power plant would ultimately power a data center, despite no public confirmation.
Data centers can use several million gallons of water a day for cooling, which has already caused issues in local communities where they are located. They also are a source of noise pollution and can reach concerning decibel levels.
As news of the project made it through the county, so did knowledge about Morrisey's bill and the potential ways it could impact the community and projects.
'There was just so much variability in terms of what we don't know,' said Moe.
Lawmakers vote to take data center regulation and benefit away from local governments
At the Capitol, the bill was moving through the House. On March 31, two House Democrats tried to amend the bill and reinstate local oversight.
'My amendment doesn't have anything to do with the specifics of microgrids, whether you like microgrids or don't like microgrids,' said Del. Evan Hansen, D-Monongalia. 'My amendment is purely about local control.'
The restrictions are needed because large data centers have statewide impact, said Del. Clay Riley, R-Harrison. This bill would make sure a town or county isn't 'stopping investment and stopping job creation.'
'Data centers have significantly, or can significantly, benefit the local economies through job creation, attracting investment. This bill, as it sits, could facilitate that development and boost economic growth,' Riley said.
In a voice vote, the chamber rejected the amendment. As the House prepared to vote on the bill the next day, some lawmakers said they worried it would raise the cost of electric bills. Those concerns ultimately led some Republicans to join the Democrats in voting against it.
Del. Marty Gearheart, R-Mercer, said he was voting no 'not because I don't want data centers here, but because in this particular instance, in my ignorance, I'm going to decide with the ratepayers in the state of West Virginia.'
On April 1, the House passed the bill, 88 to 12, and sent it over to the Senate.
As lawmakers in Charleston sent the bill to the other side of the Capitol, residents throughout Tucker County began mobilizing.
The opposition organizes in Tucker County
The community organized meetings. Residents made calls to Charleston. They emailed their delegates and senators. And news continued to spread.
By then, Country Roads News, a newsletter covering the Canaan Valley, Davis and Thomas communities, broke the story about the permit application.
That's also when county officials began learning about the implications of the governor's bill and how counties would lose both oversight and tax revenue, if it passed.
A week later, when the Senate Economic Development Committee took up the measure on April 8, there was a steady stream of testimony from officials from several counties across the state.
'I'm concerned that this bill, as presented, will ultimately discourage local counties and municipalities from attracting data centers to their community,' Tammy Tincher, president of the County Commission of West Virginia, told the committee.
Tincher, also a Greenbrier County Commissioner, said that tax revenue from developments is critical to how counties fund services and infrastructure for local communities.
Eddie Gochenour, president of the Berkeley County Commission, said that officials wouldn't have worked to bring a data center to the county if they knew they would lose so much tax revenue. He called the bill 'probably one of the most overreaching pieces of legislation that I've ever seen.'
'We want to be a true and equal partner, and I don't think that's too much to ask,' Gochenour added.
After more than three hours of testimony, the committee amended Morrisey's bill to allow counties to receive a fraction of the tax revenue earned off a project.
That same day, state air quality engineers inspected the project site with representatives from the development and land owner companies less than a mile outside of Thomas.
Over the next few days, lawmakers ironed out the details and passed the final version of the bill on April 12, the last day of the legislative session.
Now, instead of all tax revenue going to the state, 30% would go to the county where the project is located while 5% would be divided up across the other 54 counties. The bill still removed local authority over data centers and microgrids.
The community meets to learn more
The next day, nearly 300 people packed into the Davis Volunteer Fire Hall with a lot of questions and very few answers.
Tomson stood at the lectern and microphone set up in the front of the room. In a blue button down and his glasses, the mayor of Davis addressed the room.
'House Bill 2014, we'll talk about that first,' he said. 'It's a done deal. It was passed.'
'It really demonstrates, unfortunately, how much Charleston values local opinion,' Tomson added. 'They didn't want it.'
For many in the community, this was the first time they learned about the legislation.
In the nearly four-hour meeting, Steve Leyh, executive director of the Tucker County Development Authority, told the room that 'this project came out of the blue.'
'Usually that doesn't happen with real projects. Usually projects you start talking about months in advance,' Leyh said, adding that typically companies have conversations with the county commission, development authority and other local officials when looking to propose a project.
Michael Rosenau, president of the Tucker County Commission, also told the room that he had no knowledge of the project or the bill until Tomson called him.
'Everything that we're talking about now is just guesswork,' said Rosenau. 'Once I know the facts, then I can take a stance one way or the other.'
Governor Morrisey declares West Virginia 'America's energy state'
Soon after the meeting, residents formed a grassroots group called Tucker United.
With the bill awaiting Morrisey's signature, the group turned their efforts toward him. A few days after the town hall meeting, the group started asking the governor to veto the bill, going so far as to start an official petition.
In the meantime, the community sought to find answers.
Moe filed records requests. Amy Margolies continued emailing elected officials. Nikki Forrester kept spreading word. And they all, collectively, bombarded the DEP with public comments about the air permit application, asking the redacted information be released.
On April 25, spurred by the influx of comments, the DEP asked for clarification on the information Fundamental Data had redacted.
Five days later, in Mason County, near another location slated to host a data center, Morrisey signed the Power Generation and Consumption Act into law alongside several state lawmakers.
'West Virginia is America's energy state, and this law is going to demonstrate it to the whole country that we are ready for action,' Morrisey said.
The governor had still not replied to Tomson's official requests for a meeting.
On May 7, Fundamental Data replied to the DEP, saying that they believe they met the state's confidentiality standard. Days later, the DEP agreed.
And a few days later, a new wave of panic surged through the community.
In a May 18 article, representatives for Fundamental Data told the Wall Street Journal that their facility could be 'among the largest data center campuses in the world' and, if fully built, could span 10,000 acres across Tucker and Grant counties.
It 'broadened our fears more than we could ever imagine,' said Sheena Williams, a longtime Tucker County resident.
When asked in July, about whether the governor would meet with the mayor or community, spokesperson Drew Galang said that the executive branch, through the DEP, had 'already conducted significant public participation efforts.'
'As with most large‑scale economic development projects, there are multiple avenues for public participation,' he said, adding that Morrisey will always welcome feedback from communities 'so that we are bringing in business the right way and addressing citizens' concerns appropriately.'
The community questions state regulators
In the evening of June 30, more than 300 people filed into the Canaan Valley Resort State Park in Tucker County. Members of the DEP's Division of Air Quality sat at the front of the room, with their backs facing a wall of windows that peered over the valley.
Standing at one of the two lecterns in the room, Terry Fletcher, DEP's chief communications officer, addressed the room.
'Our purpose here is to provide the information and answer questions relevant to Fundamental Data's air quality permit application,' he said.
But residents wanted to talk about more than air quality.
As the meeting stretched on for nearly five hours, folks cycled through a range of feelings beyond anger and frustration. Some begged and pleaded with the state regulators while others bargained, asking them to help their community.
As state air quality engineers answered questions about the project's permit, they explained that the community's other concerns — water, noise, light and zoning — were outside their control.
When one engineer suggested residents speak to their local officials, someone from the crowd shouted: 'They've been cut out of the process.'
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This story was originally published by Mountain State Spotlight and distributed through a partnership with The Associated Press.