Paulding I Economic Impact Study
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WILDCAT WIND FARM I REVENUE BENEFITS FOR MADISON COUNTY 1. Estimated Additional Property Tax Revenues $ 22.5 Million . Estimated Property Tax Revenue (2014-2024) $5,440,000 . Estimated Annual Property Tax Revenue (2024 and beyond) $750,000-$1,000,000 . 15-year total $9,000,000- $10,000,000 . 30-year total $20,000,000-25,000,000 Estimated 15-year Property Tax Revenue to Taxing Districts within Project Area Approximate Proportion Taxing District Approximate 15-Year Total of Local Tax Revenue Madison Grant School District 38% $3,500,000 Elwood School District 9% $800,000 County (excl. Bridges) 31% $2,900,000 Bridges 1.5% $140,000 Duck Creek Township 12% $1,100,000 Boone Township 0.3% $24,000 Pipe Creek Township 0.3% $26,000 Library 7% $700,000 Solid Waste 0.4% $35,000 2. Landowner Royalties $500,000-750,000/year . 30-year total estimate, assumes 2% annual increase in price of power $22-28 Million 3. Economic Development Donations $1.2 Million To be used to stimulate further economic development in the County. 4. Permit Fees $180,000 5. Estimated Road Upgrade/Rebuild Investment $3 Million - $6 Million Upgrades will be made to County and Township roads within the Project Area used during the construction process. Post construction, these roads will be restored to the same or in nearly all cases better than original condition. This range is typical of E.ON’s experience in the Midwest TOTAL DIRECT ECONOMIC BENEFIT: $48,000,000 to $60,000,000 1 To: Madison County Commissioners and Planning Commission From: E.ON Climate & Renewables Subject: Wildcat Wind Farm I - Summary of Potential Economic Impacts on Madison County Date: May 2, 2011 E.ON Climate & Renewables (EC&R) evaluated the economic impacts of constructing and operating the proposed Wildcat Wind Farm I project in Madison and Tipton Counties. Total investment in the wind farm will be approximately $350-400 million, half of which will be in the Madison County portion of the project. The project is expected to be constructed over an 8-12 month period beginning in early 2012. This analysis concludes that the project will result in a positive economic impact to the County, including the creation of jobs as well as an increase in local spending. The project will also confer land lease payments to participating landowners. The analysis is based on reasonable assumptions of future expenditure patterns for constructing and operating the proposed wind farm. Findings should not be taken as precise projections of future performance, but rather provide insight into the likely economic impact of the project. Economic impacts were estimated using an input-output model designed by the U.S. Department of Energy, National Renewable Energy Laboratory (NREL) called the Jobs and Economic Impact (JEDI) model, which estimates the economic impacts of constructing and operating power generation facilities. Demographic and project specific data for Madison County was used to further refine results. A detailed description of the JEDI model can be found at http://www.nrel.gov/analysis/jedi/about_jedi.html. Summary of Economic Impact Wind farms and other economic investments that bring new dollars and jobs to a locale and are measured using three components of economic impact: direct, indirect and induced impacts, which are described below: Direct impacts are immediate, project development and onsite labor impacts created by expenditures that are directly applied to the project and include expenditures on engineers, project developers, construction crews, road builders, turbine erection crews, crane operators, etc. Indirect impacts, or secondary supply chain impacts, are generated by expenditures on equipment, materials and services for the construction or subsequent operation of the wind farm though spending on those supportive businesses. Examples include concrete manufacturers, equipment, spare parts, transportation, and also professional services. Induced impacts reflect overall increases in household spending, as income increases due to additional economic activity created by the project. Induced impacts result when people spend money for their personal needs, not project needs, such as food, clothing, housing, day care, medical care and insurance. For the purpose of this analysis, the term “job” is classified as one full-time equivalent (FTE) job. One FTE is equal to one person working full-time for one year, or 2,080 working hours (52 weeks, 40 hours per week). Local Economic Impact: Construction Phase Jobs, wages, and salaries. As shown in Table 1, the project is projected to create approximately 30-60 jobs through the direct impacts associated with the project, generating approximately $3 million in earnings. This estimate represents the estimated number of local jobs directly involved in the project construction. The indirect impacts of the project are projected to create another 150-200 jobs, generating approximately $12 million in earnings. Induced impacts are projected to generate another 30-100 jobs and approximately $3.5 million in earnings. Local expenditures. The direct impacts of the project are limited to on-site project costs, and are projected to generate approximately $200,000 in local spending in Madison County during the construction phase of the project. The majority of local spending that is projected to occur during the construction phase will occur as a result of the indirect impacts of the project. It is projected that the proposed wind farm will generate approximately $29 million in 1 local expenditures as a result of the indirect impacts of the project. The induced impacts associated with the project are projected to generate approximately $7 million in local expenditures. In all, the total estimated economic impact of jobs, earnings and local expenditures is anticipated to have a combined total local benefit to Madison County of approximately $54.7 million during the 8-12 month construction phase of the project and create approximately 200-360 jobs. Figure 1: Estimated Benefits to Madison County during Construction Phase Impact Type Approximate Jobs (FTE) Wages and Salaries Local Expenditures Total Local Benefit Direct Impacts ~ 30-60 ~ $3,000,000 ~ $200,000 ~ $3,200,000 Indirect Impacts ~ 150-200 ~ $12,000,000 ~ $29,000,000 ~ $41,000,000 Induced Impacts ~ 30-100 ~ $3,500,000 ~ $7,000,000 ~ $10,500,000 Total Impacts ~ 200-360 ~ $18,500,000 ~ $36,200,000 ~ $54,700,000 Source: JEDI Wind. Note: Amounts rounded to the nearest hundred thousand dollars. Local Economic Impact: Operations and Management Phase Jobs, wages, and salaries. The direct impacts associated with the project are projected to create approximately 4-6 jobs in Madison County, generating approximately $250,000 annually in earnings. This includes jobs that are directly involved with the ongoing operations of the project. Another 8-10 jobs are projected to be generated by the indirect impacts of the project, generating a total of approximately $400,000 in wages and salaries annually. Induced impacts associated with the project are projected to create an additional 8-10 jobs in Madison County, generating approximately $400,000 in earnings. Local expenditures. The direct impacts of the project are limited to on-site project costs, and are projected to generate approximately $50,000 annually in local spending. The majority of spending projected to occur within Madison County during the operations phase of the project will occur as a result of the indirect impacts of the project. It is projected that each year the proposed wind farm is in operation, approximately $2.6 million on local expenditures will be generated as a result of the indirect impacts associated with the project. Induced impacts are projected to generate another $800,000 each year in local spending. As summarized in Figure 2, the total estimated economic impact of jobs, earnings and local expenditures is anticipated to have a combined total local benefit to Madison County of approximately $4.6 million annually during the ongoing operations of the project, and is expected to create approximately 20-26 jobs. Figure 2: Estimated Annual Benefits to Madison County during Operations Phase Impact Type Approximate Jobs (FTE) Wages and Salaries Local Expenditures Total Local Benefit Direct Impacts ~ 4-6 ~ $250,000 ~ $50,000 ~$300,000 Indirect Impacts ~ 8-10 ~ $400,000 ~ $2,600,000 ~$3,100,000 Induced Impacts ~ 8- 10 ~ $400,000 ~ $800,000 ~$1,200,000 Total Impacts ~20- 26 ~ $1,050,000 ~ $3,450,000 ~ $4,600,000 Source: JEDI Wind. Note: Amounts rounded to the nearest hundred thousand dollars. Land Lease Payments Landowners who lease their property for the project will benefit from the guaranteed income stream the project provides. In addition, land owners who elect to have meteorological towers will receive additional payments. Payments made to participating land owners within the Madison County are projected to total approximately $500,000 to $750,000 each year over the life of the project. These landowner payments are measured as part of the indirect impacts associated with the project, and contribute toward the total local benefit as summarized above. Property Tax Revenue The construction of the proposed wind farm will result in an increase to Madison County’s tax base by approximately $40-60 million. However, the anticipated property tax revenue is not presented as part of this summary. 2 WIND ENERGY FACTS: Indiana Indiana’s impressive wind capacity additions have created economic development throughout the state In 2009 and 2010, Indiana increased its installed wind capacity ten-fold, becoming one of the fastest growing states for wind power. New wind projects have supported new jobs and provided numerous economic benefits. Blue counties have wind projects. Green dots are online wind energy manufacturing facilities. Yellow dots are announced wind energy manufacturing facilities. WIND PROJECTS Currently online: 1,339 megawatts (MW) Added in 2010: 303 MW Added in 2009: 905 MW Wind projects in queue: 8,426 MW Indiana added the second most new wind power capacity of any state in 2009 and was the third fastest-growing state for wind power.