January 26, 2024 - At the same time, but on opposite sides of the West Virginia Capitol, two legislative committees approved two bills that would tip the scales in favor of fossil fuels. One would reduce the taxes for coal companies while the other would increase taxes on wind power projects.

The share of energy generated in the United States by renewable energy sources, including wind, is expected to grow over the next two years, according to the Energy Information Administration, while coal-fired generation is expected to significantly decrease over the same period.

However, a measure approved by the Senate Energy, Industry and Mining Committee earlier this week could hinder such energy growth in West Virginia as it would increase taxes on wind power plants.

Sen. Randy Smith, R-Tucker, during a legislative committee hearing.

Will Price/WV Legislative Photography

SB 231 would increase taxes on wind projects by changing the tax category of the wind turbine and tower. The bill would potentially shift the property tax burden onto the landowner, according to a note from the Department of Revenue.

The change in tax policy would result in an annual increase of about $6.1 million in revenue, according to estimates.

The national expansion of the clean energy sector has spurred a string of recent renewable energy investments in the state, which hold promises of job creation and energy development.

In 2022, wind energy accounted for almost 4 percent of West Virginia’s net generation, according to the EIA. But this bill threatens to stunt that growth.

Chris Hall, a representative for renewable energy company Clearway Energy, warned lawmakers that the bill would potentially make wind energy investments in West Virginia more difficult and that companies may opt to build wind farms in other states.

The committee advanced the bill to the Senate Finance Committee, where lawmakers plan to “try to work out a compromise” among all stakeholders, including those in the wind energy industry, said Energy, Industry and Mining Committee Chairman Sen. Randy Smith, R-Tucker.

While Senate lawmakers considered a measure that could stunt wind power investments in the state, delegates passed a bill that would reduce the severance taxes paid by coal companies.

Under HB 4722, companies that pay severance taxes would be able to get a tax credit for up to $100,000 spent on road and highway improvement projects. The projects would have to be approved by officials at the Department of Transportation.

The cost to the state is expected to be $53 million to $65 million during the next fiscal year based on current prices and trends, according to a fiscal note by the state Department of Revenue.

These bills are yet another example of how state lawmakers have been hesitant to embrace the rapidly changing energy landscape. Last week, the Senate Economic Development Committee derailed into a heated discussion over a single line about net-zero carbon despite the bill’s main goal to help struggling coalfield communities.