West Virginia Governor Proposes Taxing High-volt Power Lines

Gov. Joe Manchin is making good on his pledge to tax a $1.3 billion multistate power line slated to cut a path through six West Virginia counties.

Manchin has proposed extending a state business tax to electric transmission lines that carry at least 450 kilovolts over at least 50 miles within the state.

The governor's bill would cover the proposed Trans-Allegheny Interstate Line Co. project. The Allegheny Energy Inc. subsidiary wants to erect the 500-kilovolt, 240-mile power line to deliver extra electricity to 13 eastern states.

To stretch from Washington County, Pa., to Loudoun County, Va., the line would pass through Monongalia, Preston, Tucker, Grant, Hardy and Hampshire counties in West Virginia.

The bill would levy a privilege tax, starting July 1. The tax rate would be based on a formula reflecting a line's length and voltage capacity. Administration officials expect it to reap around $135 million annually, including $45 million from the TrAIL project.

One-third shares of the resulting revenue would go to the West Virginia Infrastructure and Jobs Development Council, the counties that host such lines and to all electric retail customers statewide as reduced billing rates.

Allegheny Energy endorsed the tax idea when Manchin first proposed it last year, after the state Public Service Commission granted regulatory approval in August.

The tax would also apply to a 285-mile, 765-kilovolt line that could run out of American Electric Power Co.'s John Amos power plant near St. Albans, if that project advances. The utility does not oppose the governor's bill, an official with its Appalachian Power division said.

"We respect the right of the state to tax various properties," said Mark Dempsey, vice president of external affairs.

Dempsey also noted that the tax's burden would fall to PJM Interconnection, the organization responsible for the 13-state Mid-Atlantic region's transmission grid. Manchin officials estimate the tax on the Potomac-Appalachian Transmission Highline, or PATH, would generate $90 million annually, while noting the project awaits approval.

PJM has called for new power lines, arguing they will stabilize the grid and ensure a reliable flow of electricity. A PJM spokesperson did not immediately respond to a request for comment.