WV energy affordability, jobs, GDP projected to drop due to House budget bill

The U.S. House of Representatives on Thursday passed a budget reconciliation package in a 215-214 vote that, if approved in the Senate and signed into law by President Donald Trump, an ardent green energy opponent and climate change skeptic, would curtail a bevy of energy tax credits widely credited with spurring economic development and progress toward cheaper, less polluting energy throughout the country.

Reps. Carol Miller and Riley Moore, both R-W.Va., voted with the narrow Republican majority in the House, which passed the legislation mostly along party lines. In a statement Thursday, Moore characterized the bill as a strike against “the Green New Scam” and claimed the bill “unleashes American energy.”

Disagreeing with him is the leader of a technology company that announced raising over $1.2 billion as of October 2024 as it began construction to expand a 550,000-square-foot manufacturing facility in Moore’s district.

That company, Form Energy, is working to develop and commercialize a new class of multiday energy storage systems powered by its new production facility in Weirton, backed by a state-provided $290 million incentive package in 2023 that required the creation of 750 jobs within five years.

Mateo Jaramillo, cofounder and CEO of Form Energy, said in an emailed statement to the Gazette-Mail on Wednesday the company opposed rollbacks proposed in the budget reconciliation package. Jaramillo called energy tax credits “essential to rebuilding American manufacturing, enhancing our energy reliability and security, and ensuring the United States remains competitive in the global economy."

Jaramillo indicated more than 400 people and counting are working on advancing energy storage technology at Form Energy’s facility on a 55-acre site where Weirton Steel once employed some 12,000 workers — and that rolling back energy tax credits would undermine the company’s progress.

“Start-stop policy does not work for American businesses — especially those making long-term capital investments in infrastructure and workforce development,” Jaramillo said.

Last year, the West Virginia Economic Development Authority authorized up to $10 million for a forgivable loan for Babcock & Wilcox, an Akron, Ohio-based energy and environmental technology company that estimated the project would be backed by $125-150 million and use hydrogen production and decarbonization technology.

Babcock & Wilcox chairman and CEO Kenneth Young, in an emailed statement Wednesday, argued for preserving tax credits for capture and underground storage of carbon dioxide and hydrogen production. Tax credits for the former are vital for the coal industry because they reduce the cost and risk of investing in carbon capture and sequestration technologies, while tax credits for the latter help meet demand in transportation, power generation and manufacturing, Young argued.

“U.S. power generation should leverage U.S.-based technologies that are designed, engineered and manufactured in the United States,” Young said.

But the House bill generally would eliminate tax credits for clean electricity production and investment, with tax credits to expire at the end of 2025 for energy-efficient home improvements and residential clean energy, most electric vehicles and hydrogen production for projects that don’t start construction by the end of the year.

The House bill also would disqualify clean energy projects from federal tax credits if they’re linked to China or other “foreign entities of concern,” language that experts say would make them infeasible and cede competitiveness in the green energy market to China.

Renewable and diversified energy advocates predict the legislation will result in escalating electric bills, factory closures, hundreds of thousands of jobs lost and a weaker electric grid.

“By voting to cut these successful programs, the majority in the House has chosen to pull the rug out from under Appalachian workers and communities just as we're getting back on our feet,” Dana Kuhnline, program director of ReImagine Appalachia, a regional coalition of economic and environmental leaders, said in a Thursday statement.

Manufacturing investment jumped after IRA

The budget reconciliation package comes amid what has been a manufacturing boom following the Inflation Reduction Act, landmark legislation passed in 2022 by a then-Democratic-controlled Congress and signed into law that August by then-President Joe Biden. The package would cut off a wide range of tax credits created or extended by the Inflation Reduction Act.

From the second half of 2022 through the first half of 2024, business and consumer investment totaled $493 billion, a 71% spike from the two years prior to the Inflation Reduction Act, according to an analysis by the Rhodium Group, an independent research firm, and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.

Per that analysis, the fastest growth came from investment in manufacturing clean energy and transportation technology, which at $89 billion in the post-Inflation Reduction Act period more than quadrupled the $22 billion invested in the two years before the law’s enactment.

Purchases of zero-emission vehicles grew fastest, to $157 billion, nearly double pre-Inflation Reduction Act investment, according to the study. The purchase and installation of residential and commercial rooftop solar systems, other distributed renewables, fuel cells and battery storage also surged 40% in the post-Inflation Reduction Act period to $43 billion.

W.Va. jobs, GDP projected to drop

The budget reconciliation package would harm the U.S. economy “significantly” through damage via higher energy prices, lost jobs and lower gross domestic product, according to modeling by Energy Innovation, a San Francisco-based climate policy firm.

Between 2026 and 2034, national GDP would fall nearly $1.1 trillion, wholesale power prices would balloon roughly 50% by 2035 from the loss of new generation capacity, jobs would fall by over 830,000 in 2030 and annual consumer energy costs would climb over $33 billion by 2035, according to the modeling.

In separate modeling released in March, Energy Innovation projected repealing federal funding and tax credits would slash West Virginia’s GDP by $2.12 billion in 2030 and $2.74 billion in 2035, compared with maintaining current policies.

Reducing new clean energy projects would increase West Virginia’s air pollution by over 10 million metric tons of carbon dioxide in 2030 and 3 million metric tons in 2035, equivalent to the annual air pollution from four coal-fired power plants combined, per the modeling.

Full repeal of current federal energy and climate policies would raise U.S. household and business energy expenses by over $50 billion in 2035, increase average household energy costs by roughly $100-160 per household per year in 2030 and slash capital investment in U.S. electricity and clean fuels production by $1 trillion from 2025 to 2035, per an analysis by Princeton University and Evolved Energy Research, a San Francisco-based energy consulting firm, published Thursday.

That analysis found that the budget reconciliation bill was “substantively similar” to the full repeal scenario it modeled, which also projected an end to America’s battery manufacturing boom and annual electric vehicle sales slashed by 40% in 2030.

The Solar Energy Industries Association projected the bill could result in 330,000 current and future American jobs lost, including 94,000 solar manufacturing jobs, 331 factories closed or canceled and $285 billion in lost private investment by 2030.

“This unworkable legislation is willfully ignorant of the fact that deploying solar and storage is the only way the U.S. power grid can meet the demand of American consumers, businesses, and innovation,” SEIA president and CEO Abigail Ross said in a statement Thursday, predicting the U.S. would effectively surrender a race to develop artificial intelligence to China if the bill becomes law.

Kuhnline noted that Appalachian communities have secured competitive grants and attracted private investment.

“The data shows these investments are working,” Kuhnline said.

W.Va. electric costs expected to rise 

Repealing existing federal clean energy tax credits and funding programs would increase average annual household energy costs in West Virginia, including electricity and fuel expenses, by nearly $40 per year in 2030 and nearly $120 per year in 2035, per an Energy Innovation analysis.

Across all West Virginia households, household energy costs would rise nearly $361 million through 2035, Energy Innovation projected.

Repealing clean electricity production and investment tax credits, as the reconciliation bill would do for non-nuclear projects placed into service after 2028, would raise residential electricity prices by 4.7% in West Virginia in 2029, according to an analysis published by the Clean Energy Buyers Association, a diverse group of energy customer companies. Commercial and industrial electricity prices would climb 6.7% in West Virginia in 2029, per the study.

“[C]onsumers will see skyrocketing electricity prices; workers will lose jobs; and local governments will encounter barriers to implementing programs that benefit their communities and save money,” Darla van Hoorn, media relations manager for the World Resources Institute, a global research nonprofit, said in a statement.

Capito defends bill framework  

The bill would require a wide range of advanced energy projects to start construction within 60 days of its enactment, moving a deadline to place them into service up to the end of 2028 and effectively cutting off any new development.

The World Resources Institute predicted the proposed elimination of tax credits that support low- and no-emission vehicle technologies would pose instant logistical and financial challenges to school districts, municipalities and others who have already made plans and budget decisions based on being able to access the credits.

But the bill is poised to be a key tool for the fossil fuel industry.

Mike Sommers, president and CEO of American Petroleum Institute, called the bill “a win for our nation’s energy future” in a statement Thursday, predicting it would yield permitting progress and preserve competitive tax policies.

The bill now goes before the Republican-controlled Senate after projections it will hit lower- and moderate-income Americans hard due to its designed extension of tax cuts first created under President Donald Trump in 2017 that benefit the wealthy.

The independent, nonpartisan Congressional Budget Office has estimated 8.6 million fewer people would have health insurance with changes to Medicaid and the Affordable Care Act under the budget reconciliation package prior to its advancement out of the House Rules Committee. The CBO also said 3 million fewer people each month would have SNAP benefits.

The University of Pennsylvania’s Penn Wharton Budget Model on Friday estimated the bill as passed by the House would redistribute wealth to higher-income Americans. Those in the bottom fifth of income earners would lose almost $30,000 lifetime for the working-age population – the largest losses under the bill, per the analysis.

In contrast, working-age households in the top fifth of incomes ($174,000 and up) would gain an average of nearly $45,000.

Sen. Shelley Moore Capito, who chairs the Senate Environment and Public Works Committee, contested — on a call with reporters Thursday — that the bill would disproportionately benefit the wealthy, touting it as a pro-energy bill in the process.

“[T]he energy development in this bill is good for every single West Virginian at every single income level,” Capito said. “That means more jobs. That means cheaper energy. It means less reliance on any other kind of external energy.”

Capito went on to assert the bill would make West Virginia “an epicenter of energy development.”

But the bill’s opponents suggest it would smash the ground out from underneath the feet of advanced energy developers who have gathered momentum toward economic development that lowers emissions, electric bills and dependence on foreign supply chains in West Virginia and nationwide.

“This isn’t a scalpel, it’s a meat cleaver,” Heather O’Neill, president and CEO of Advanced Energy United, a national industry association representing advanced energy and transportation options, said of the reconciliation bill in a statement. “And it will hurt us all.”