West Virginia House Committee Approves Portion of $290M in Battery-Plant Incentives

February 6, 2023

Mountaineer News

WV Business News

CHARLESTON, WV - West Virginia’s House Finance committee approved a bill on Monday that will help to finance part of the promised $290 million to Form Energy for its planned iron-air batteries production facility in Weirton.

The batteries are being touted as significantly increasing the ability for utility companies to store energy at a large scale for up to 100 hours instead of the current average of 4-6 hours. House Bill 2882 includes a transfer of $105 million from an unappropriated surplus from last year’s budget to the Economic Development Project Fund, which would then be used toward Form’s incentives. The deal was announced in December with Form promising up to $750 million spent on the project and 750 new full-time jobs. The project land and facility will remain state property on 55 acres in the northern panhandle of West Virginia, along the Ohio River.

A summary of the projected economic benefits of the project, posted by Metro News, has been used to justify the impact of the project.

John Mozena, president of the Center for Economic Accountability, said that some of the assumptions in the report do not make sense, such as an assumption that the batteries will be consistently priced at $3 million per megawatt for the six years after battery sales are projected to begin in 2024.

Mozena cited data from the U.S. Department of Energy National Renewable Energy Laboratory and the International Renewable Energy Agency predicting prices will drop by more than one-third by 2030.

Mozena also said that the report isn't a "study" and the numbers were not independently verified by the researchers. Instead, all of the numbers were supplied by Form and the West Virginia Development Office, meaning it was "garbage in, garbage out" with the impact numbers.

“Regardless, these kinds of big projects aren’t what drive economic growth in a state,” Mozena said. “Back in 2009, one of the authors of the Form Energy economic impact study, Dr. John Deskins, was a co-author of a research study that quantified how important small business formation is to a state’s economy. The best way for a state or region to grow is to be a welcoming place to start and grow a business that creates good jobs as it expands, not try to bribe big companies or big projects into locating there with taxpayer dollars.” Deskins confirmed that the $3 million estimate and the numbers in the report all came from the West Virginia Development Office and Form.

"The idea was that the current price (in December) was higher than the figure that we used and that the price was expected to drop over the period under consideration," Deskins said. "Thus, the figure that we used was reflective of an average over the entire period."

In a Jan. 24 letter from Rep. Pat McGeehan, R-Hancock, posted by Metro News, questions about Form's funding were asked, including about the company's financial ties to Saudi Arabia, Singapore, China and Bill Gates.

During Monday’s discussion, Rep. Douglas Skaff, D-Kanawha, said he feels the Form deal is better than many others that have been approved over recent years in West Virginia.

“It gives us the biggest rate of return to an area that has been decimated for years,” he said. But Marty Gearheart, R-Mercer, said that he didn’t want to be the “Debbie Downer” but “I don’t think we have a good deal in front of us.”