House of Delegates Finance Committee OKs $105M for Form Energy Project in Weirton
Photo courtesy of WV Legislative Photography Trending
CHARLESTON - Members of the House Finance Committee voted Monday on part of the financial package to bring a new battery manufacturer to Weirton, but one delegate expressed concerns about the use of taxpayer dollars on what he called a “risky venture.”
The committee recommended House Bill 2882 for passage, sending the bill to the full House of Delegates for consideration.
HB 2882 is one of several supplemental appropriations bills introduced on behalf of Gov. Jim Justice this year to reappropriate some of the remaining $552 million in surplus tax dollars left over from the $1.3 billion in excess tax revenue the state collected at the end of fiscal year 2022 last June.
The bill would take $115 million out of available surplus tax dollars and send those dollars to the state Department of Economic Development, with $10 million dedicated to the department’s broadband expansion projects and $105 million for the Economic Development Project Fund for the Massachusetts-based Form Energy battery manufacturing project on the site of Weirton Steel.
“The Weirton that I’ve seen in recent memory is one where it is vacant,” said Del. Erikka Storch, R-Ohio. “I can’t think of a better opportunity that will be a better fit for this community to take a chance on a company that is willing to invest in a community that could really use the jobs and the investment in them. I’m really excited to do that and tell my mom I support her hometown.”
The Economic Development Project Fund, created by Senate Bill 729 last year, allows the state Economic Development Authority to loan companies money for high-impact development projects. The company would have to invest more than $50 million of their own money before being eligible for the loan and agree to create at least 200 jobs.
Form Energy announced in December it will build a manufacturing facility to make specialty batteries on the former Weirton Steel site. The new Form Energy facility will be a $760 million investment in West Virginia with the goal of creating as many as 750 jobs.
The company will build its first iron-air battery manufacturing plant. While Form’s process is proprietary, the batteries contain iron pellets that rust, release oxygen, and revert the rust back into iron. This cycle allows the batteries to be charged and recharged.
The Economic Development Authority met prior to the December Form Energy announcement, approving a $75 million economic incentive package from the Economic Development Project Fund for the project. The state is also using an asset-based lending approach for the project as the Weirton Steel buildings are improved and renovated. The state will retain ownership of the land and buildings as a backstop to guarantee the state’s investment.
“We have so many triggers in here. It’s a win-win,” said House Minority Leader Doug Skaff, D-Kanawha. “We develop a property with an opportunity for 750 jobs, and if we get halfway through and it’s not working out, guess what we have left? We still own the property. We own a brand-new building that we can dangle out there and attract other companies and investment to that same area. We’re halfway there. This is a no-brainer for me.”
The total state investment will be $300 million with another $110 million expected to go to Form once the project is complete. Form is putting in $350 million up front to get the project started. But that amount of investment of public tax dollars raised concerns with House Majority Whip Marty Gearheart, R-Mercer.
“I don’t know if the State of West Virginia wants to be involved in using our capital as risk capital,” Gearheart said. “I think we want to encourage folks to be here. I think we want to encourage them to do new things. We think they ought to recognize our heritage and the hardworking people that are here. But we have a lot of tax dollars here that I think we are putting into a risky venture. I hope that I’m wrong.
“I simply cast a warning out at this point that I think what we’re planning to undertake with this supplemental appropriation … is a risky venture and it’s not necessarily the appropriate path we should take financially in the State of West Virginia,” Gearheart said.
The Form Energy project and supplemental appropriation have come under scrutiny the last two weeks from lawmakers. Delegate Pat McGeehan, R-Hancock, wrote a letter to the company on Jan. 24 seeking more information on the company’s structure and foreign investors. The company has since announced no current ties to Chinese or Saudi Arabian investors. Form has several celebrity investors, including Microsoft founder Bill Gates and Amazon found Jeff Bezos.
The state’s use of taxpayer dollars for the Form Energy project also came under further scrutiny Friday by the Senate Finance Committee. Mitch Carmichael, cabinet secretary of the Department of Economic Development, defended the project, stating that West Virginia would maintain control of the Weirton Steel property if the Form project falls through.
“I want to make it very clear: we own that asset. They can earn that asset if and when they create 750 jobs, spend $350 million of their own money, and provide healthcare benefits and so forth,” Carmichael said. “Until then, we own the asset and we are completely secure from a collateral perspective on that asset.”