Risking public money to buy hope

Kentucky extended an extremely warm welcome this month to a company that’s making a huge bet on a new energy future.

But the $30 million in tax incentives over 15 years taxpayers are promising Enerblu seems like a cold shoulder compared to the $15 million upfront investment, plus at least $10 million in tax incentives, Kentucky gave Braidy Industries, which plans to operate an aluminum rolling mill.

Both are new companies — Braidy founded last year and Enerblu in 2015 — and both aim to use new technologies to create value and drive growth.

It’s hard to tell from the information available to the public, but neither seems to bring a lot of its own capital to the table.

Despite the similarities, Kentucky is treating these innovative start-ups very differently.

Enerblu will only get the full benefit of the tax incentives if it produces the promised jobs: 110 in Lexington with average hourly wage, including benefits, of $52; and 875 in Pike County with an average hourly wage, with benefits, of $39.

For Braidy, Kentucky taxpayers are putting $15 million at risk before it has even begun construction of its plant, much less employed the 367 anticipated workers who are projected to earn an average of $38 an hour, including benefits.

Braidy, which touts its potential to produce rolled aluminum at much lower cost than existing providers, could help solidify our state’s manufacturing status. It will provide aluminum for both automotive and aviation industries, both of which already have a large presence in Kentucky.

And Enerblu could help move Kentucky beyond coal to more sustainable, and cleaner, forms of energy. Its divisions make battery-driven automobiles and the specialized batteries needed to power them as well as microgrids that distribute energy — often from alternative sources like batteries, solar or wind — to customers and, in some cases, entire communities.

Enerblu plans to move its headquarters to Lexington from California in the new year and build an industrial plant in Pike County to manufacture the advanced batteries that supply energy to buses, commercial and military vehicles.

Both Enerblu and Braidy expect their manufacturing facilities to come online in 2020.

Both are welcome in Eastern Kentucky, where the economy has been devastated by decades of environmental degradation and capital flight visited upon it by the extractive coal industry.

If they come to fruition, each could play an important role in transforming its community and creating spinoff opportunities for the region.

But that’s a big “if” and one that makes the peculiar decision to spend millions of taxpayer money to buy into Braidy troublesome, particularly as both Braidy and our state government are fighting to keep secret the identities of the other investors.

Experience teaches that promises of good, new jobs too often fade before reaching fulfillment. If that happens with Enerblu, taxpayers have lost only hope. If it happens with Braidy, Kentucky will be $15 million poorer.

This story was originally published December 19, 2017 at 7:10 PM with the headline "Risking public money to buy hope."