There’s a curious drama unfolding in Wise County — or, perhaps, not unfolding. It goes like this:
The economy of Wise County is being held hostage by an out-of-state utility that refuses to help attract new employers to a county ravaged by the decline of the coal industry.
Or, perhaps it goes like this: Community leaders want to use the power of state government to force a private company to buy something it doesn’t want to buy.
Wise County is a long way from Roanoke — and even further away from Richmond — but the issues playing out there are ones that should be of interest to any locality trying to refashion its economy for the 21st century.
Wise County sits in the heart of Virginia’s coalfields, a region in dire need of a new economy. (Stat of the day: Virginia now has just 2,483 coal miners left. For context, there are more teachers in the Roanoke Valley than there are coal miners in the entire state.) Wise County, though, has been at the forefront of not only trying to diversify its economy — but also trying to build a technology sector in the heart of Appalachia.
This is an unlikely good news story.
The county has pushed itself as a test site for drone companies (successfully, too) and Mountain Empire Community College now offers a class to prepare students to get the federal license for piloting drones.
The University of Virginia’s College at Wise has focused on cybersecurity majors — on the theory that cybersecurity jobs can be done from any place where there’s good Internet service. And, thanks to funding from the state’s tobacco commission, Wise County now has broadband speeds that exceed those in Northern Virginia.
This, by the way, is a prime example of why government involvement in broadband is sometimes necessary. The private sector on its own would never have wired Wise County like that because the demand wouldn’t have justified the supply. The tobacco commission, though, sees broadband as infrastructure, and hopes that the supply will attract the demand.
The county has promoted that broadband capacity as a way to lure a type of business that otherwise is clustering in Loudoun County: Data centers. It’s already scored one — the Mineral Gap Data Center is currently under construction in the Lonesome Pine Regional Business and Technology Park. When open, it will bring 30 jobs to a county where the unemployment rate is 7.6 percent — a figure suppressed by the fact that many people are simply leaving the county because there’s no work available.
The county hopes other data centers will follow. There’s one potential obstacle, though. Data centers are energy hogs, and many data center companies like to use renewable energy. Facebook plans a data center in New Mexico – powered by three solar farms. Microsoft uses wind energy to power its data center in Wyoming. Amazon last fall announced five solar farms to power its data centers in Northern Virginia.
Wise County, though, is mostly served by Old Dominion Power, a unit of Kentucky Utilities Company. Some 80 percent of its power comes from coal, 19 percent from natural gas, and 1 percent from renewables. That’s not exactly the energy profile that green-friendly tech companies want. Interestingly, there’s a solar company that wants to locate in Wise County. Energix Renewable Energies, the largest renewable energy company in Israel, has been scouting the United States for locations and has zeroed in on Wise County. In November, the company signed a non-binding “memorandum of understanding” to locate a 20-megawatt solar plant in Wise. “I don’t want to go where all the big guys are,” chief executive officer Asa Levinger told the Coalfield Progress.
Good news, right? Not so fast. Here’s where we run headlong into the rules and regulations governing renewable energy. Utilities – in this case Old Dominion Power — are granted monopolies by the state. Renewable energy companies can’t just move in and start selling power, too. Renewable companies also sometimes generate excess power and want the ability to sell that excess power into the power grid — in this case to Old Dominion Power. That’s all part of the business model that makes them profitable.
Old Dominion doesn’t seem particularly interested in waiving its monopoly or buying that excess power. “Our generation portfolio is meeting our customers’ needs at this time and we do not currently have the need for additional generation capacity,” the utility says.
The Wise County Industrial Development Authority has a different view of things. It sees the potential for a solar farm that can help attract more data centers. Put another way, it sees an out-of-state utility standing in the way of bringing jobs to the county.
So the authority has done something that industrial development authorities hardly ever do — it’s made news, and rather revolutionary news at that.
The authority recently passed a resolution calling for state government to intervene. The General Assembly is done for the year — except for its April 5 veto session, where it can only deal with bills that the governor has vetoed or amended. Accordingly, the authority asks Gov. Terry McAuliffe to propose an amendment to require Old Dominion to buy solar energy from Energix and re-sell it to other companies in the business park. The utility warns this might drive up costs for everyone: “We are opposed to any legislation that might require the addition of solar capacity which could adversely affect our customers by increasing their bills to pay for the additional generation expense.” That’s a point proponents dispute, but it does seem true, at least, that Old Dominion sees no need for additional power.
This is where things get … complicated, so complicated that most politicians we wanted to talk to about this didn’t want to talk on-the-record. McAuliffe is a strong advocate of solar energy. But the General Assembly has strict rules on amending bills. Unlike in Washington, you have to find something “germane.” You can’t just stick a solar energy amendment onto just any old bill. There are some solar energy bills pending before the governor. All those are the product of much negotiation. It’s unclear whether that anyone wants to risk mucking them up with the Wise County amendment, which may or may not generate controversy in Richmond by the precedent it might create. Every politician in the state claims they want to do something to help bring jobs to the coalfields. Here’s an interesting test for them.