State officials say there’s still a chance to pursue a major economic development project for southern West Virginia, although it would still require legislators to sign off on some changes to state law.
Officials have said the opportunity is a major corporation’s data center that could be located in Logan County, using a West Virginia energy mix of coal and renewable sources. The particular ratio, though, could be a sticking point between a national company wanting more renewables in the mix and coal-focused West Virginians. The project could have been the focal point of a special legislative session this month, but that has been set aside for now.
West Virginia officials have valued the possibility in the billions of dollars.
Senator Shelley Moore Capito, R-W.Va., said her office has been looped in and that her optimism for the project’s potential remains.
“Here’s what I would say to any — the coal industry, natural gas, wind, solar, nuclear, thermal, whoever: The appetite for power is going to be so huge, everyone’s going to win here. Everyone’s going to win. Certainly a place like Logan County could use the economic development,” Capito said in a briefing with West Virginia reporters last week.
“But yes, we have been involved very much in trying to push this over the edge, push this into the win column.”
Data centers are the large facilities that house and manage the ever-growing amount of computing and networking equipment for storing and processing data for businesses and organizations. When people talk about the cloud, that’s not actually in the sky; it’s these blocky, windowless buildings with data processing and storage equipment inside.
They are enormous energy users, and that is only expected to grow as artificial intelligence and other computing innovations gain traction. Data centers are prolific in states like neighboring Virginia, but they are also controversial among residents because of their aesthetics and noise. They are not major employers but can contribute significantly to local property taxes.
Capito said there is room in West Virginia.
“I knew this was in the making, and we’ve tried to be as helpful as we can to try to attract data centers to West Virginia,” Capito said.
“I cannot tell you how many conversations I have weekly on data centers, the need for power, how much power they need, where they can be sited. Some states don’t want them any more. We want them in West Virginia. They’re massive investments, billions of dollars of investments, and they’re going to be exceedingly necessary if we as a country are going to win the race to capitalize on AI and what it can do but also to run these enormous companies.”
State Senator Glenn Jeffries, R-Putnam, has been involved with recruitment of the developer to the state. Jeffries, this week on “The Dave Allen Show” on WCHS Radio, said the opportunity remains if West Virginia continues to work in a timely manner.
“I believe everyone will win out of this,” Jeffries said. “It’s not dead.”
Like other state officials, Jeffries said he could not name the developer but he described an opportunity long in the works.
“About six months ago, I met with them and had approached them. I want to make sure everybody understands that we approached them about bringing economic development here,” Jeffries said.
“And so we’ve been working together for about six months, and they came to us and said ‘We’ve got a project; we think we have a project here. But to get this project moving forward, there are certain pieces that have to be in place, and this was one of them.”
The possible changes to state law would build on legislation that was developed just a couple of years ago. In 2022, West Virginia lawmakers passed a bill meant to pave the way for a large manufacturer wanting to be assured of an on-site source of alternative energy. The manufacturer, which wasn’t named in the moment, turned out to be Berkshire Hathaway.
That legislation opened the state up for establishment of two districts allowing renewable energy to be produced and provided without going through the state Public Service Commission. West Virginia officials seemed to only have one development in mind, and that turned out to be in Jackson County — but they tailored the bill for the possibility of replicating it in the future.
This month, in advance of a possible legislative session that wound up not happening, state lawmakers received a draft bill that was aimed at laying the groundwork for the big project.
“It basically was going to take the 2022 legislation that we did for microgrids, and it was going to add an additional microgrid in one of the regulated territories and then add three in another one — and then it was increasing the size of what the microgrid would be,” Jeffries said.
The special session fell apart, largely over the question of whether outgoing or incoming lawmakers would take responsibility for the change of the law. To keep the possibility going, Jeffries said, the state will need to act on an aggressive timetable.
“We need to move at their speed,” Jeffries said. “These types of businesses that are looking across the country — we’re not on our own timeline; we’re on their timeline. When they make a decision, we need to react to it. So I’m hoping the legislation will be picked up really quick, and we can continue, get it passed and be able to move forward.”
While this specific project has tremendous possibility, the president of the West Virginia Manufacturers Association suggested West Virginia should consider broad changes that would position the state strategically to take advantage even more broadly of similar opportunities in data centers, artificial intelligence, cybersecurity and the energy required to drive those sectors.
The political coordination could be a challenge, just as the state is transitioning to a new governor and administration along with newly-elected legislators being seated and a new Senate president coming aboard. Yet Bill Bissett of the Manufacturers Association said West Virginia should think big. He said that will require vision, coordination — and significant production of energy.
“These calls are going to continue to come,” Bissett said in a telephone interview.
“It is a massive increase that is needed, and West Virginia is poised to do very well in this field but we may have to look at a legislative framework that is more welcoming to them and doesn’t require this quick speed of action that can be difficult, especially when we have so many new faces and leadership changes across the board in West Virginia.”
Gov. Jim Justice and his administration are giving way in a few weeks to the new administration of Governor-elect Patrick Morrisey. Justice’s chief of staff, Brian Abraham, called the development a real opportunity and expressed hope that state officials will continue to pursue this project even in a time of transition.
Abraham estimated the project could be valued at $30 billion. He described the project as being spearheaded by a large, multinational company in partnership with one of the state’s major utilities to bring a major data center into southern West Virginia on an expedited timeline.
“Our hope is it can be taken up, but I can’t answer that question with certainty. That’s something that’s going to be between those businesses. We certainly have a great relationship with them, but they operate at their own pace,” Abraham said on MetroNews’ “Talkline.”
Abraham said the project would be beneficial to a range of West Virginia energy producers.
“That was the purpose of the utility that came with the company: they were prepared to deliver a power source. Quite frankly we have capacity issues in the State of West Virginia that without more energy being produced we would have trouble taking on one of these large data centers. And that was the point: the utility was willing to step up and be a partner in the project, and it made for a great opportunity.
“In my opinion, as a lifelong resident of southern West Virginia this would have been the project of a lifetime. You’re talking about not only the employment of several hundred jobs — thousands during the construction phase but ongoing beyond that several hundred — but the tax opportunities there even at the rates we’d be doing for data centers could have been in the hundreds of millions of dollars a year available to local communities in southern West Virginia.”
Governor Justice expressed continued support for the project this past week and said he hopes West Virginia officials will continue to pursue it.
“I think it’s surely still in the mix,” Justice said during an administration briefing.
The governor continued by saying, “We had the players that were right at the table. I’m a real believer that any time in business you have an opportunity to make a deal, you make the deal.”