. WHITE PINE PUMPED STORAGE ECONOMIC IMPACTS ANALYSIS
Background and Summary
Zions Public Finance, Inc., has conducted an independent, third-party study of the fiscal and economic impacts associated with the potential development of the White Pine Pumped Storage Project (the “Project”) a pumped storage hydro project in White Pine County, Nevada. This report relies on the best information available at the time the report was prepared and is subject to change.
The proposed Project is a closed-loop pumped storage hydropower facility that would be located approximately 7 miles northeast of Ely with the capacity to generate up to 1,000 megawatts (MW). The Project is located almost entirely on BLM lands and therefore the Project would be authorized to use property under a Right-of-Way Grant from the BLM per Title 43 of the Code of Federal Regulations (CFR). The Project is anticipated to be online as early as 2030 and anticipates a total investment of approximately $2.3 billion.
Major economic impacts from this project include the below. Economic impacts are discussed in more detail in the body of this report.
• Creation of 400 to 500 direct construction jobs annually for a 5 to 6-year period, with additional construction-related indirect and induced jobs.
• Creation of 35 full-time jobs at the project site, with annual wages estimated between $80,000 and $120,000 per job.
• Additional 68 ongoing indirect and induced jobs created as a result of the 35 direct jobs at the project site; and
• Incremental property tax revenues of nearly $268 million to taxing entities over 20 years TABLE 1: SUMMARY OF SIGNIFICANT ECONOMIC IMPACTS
*Construction Impacts are spread over 5-6 years while Ongoing Impacts are presented on an annual basis.
The 35 positions at the project will pay wages that are significantly higher than the County average. These jobs, as well as the construction jobs, will create additional jobs and wages through indirect and induced impacts.
This report is organized as follows:
• Background and Summary
• Socio-Economics of White Pine County
• Proposed Development
• Tax Revenues
• Job Creation and Wages Paid
• Multiplier Economic Impacts
• Summary of Economic Impacts
Socio-Economics
The purpose of the socio-economics impact is to understand the basic demographic characteristics of White Pine County and to identify potential benefits to the County from the proposed development.
While the State of Nevada has grown rapidly over the past decade, White Pine County has experienced upand-down economic growth in that timeframe. Between 2017-2022, County GDP shrunk at an average annual rate of 1.04 percent compared to average annual growth in the State of 2.94 percent. Population growth in Nevada has consistently remained above 1 percent over the last 10 years while White Pine has seen a slight population decline during that period.
TABLE 2: POPULATION GROWTH
Source: Office of the State Demographer for Nevada, NV Department of Taxation
Household income growth in White Pine County has increased more rapidly than average incomes statewide. White Pine’s median household income in 2010 was only 87 percent of the Nevada average statewide. By 2019, the median household income in the County had slightly surpassed that of the State, but the two were roughly equivalent by 2022.
TABLE 3: MEDIAN HOUSEHOLD INCOME
Source: U.S. Census Bureau, ACS 5-Year Estimates; ZPFI
The State of Nevada more closely resembles typical “Christmas tree” pattern of age demographics that shows declining numbers of persons as the population ages. The pattern for White Pine County is
somewhat different, with a higher percentage of an older population and a smaller percentage of a younger population. The median age in Nevada is 39.0 while it is 41.4 in White Pine County. The average number of people per household of 2.68 in White Pine County is slightly smaller than the Nevada average household size of 3.21.
FIGURE 2: PERCENT OF POPULATION BY AGE GROUPING
Nevada
80 to 84 years
70 to 74 years
60 to 64 years
50 to 54 years
40 to 44 years
30 to 34 years
20 to 24 years
10 to 14 years
Under 5 years
Source: U.S. Census Bureau, 2022 5-Year Estimates
White Pine County
80 to 84 years
70 to 74 years
60 to 64 years
50 to 54 years
40 to 44 years
30 to 34 years
20 to 24 years
10 to 14 years
Under 5 years
Male Female
Largely due to the strength of the agriculture and mining sectors, unemployment rates have been well below in the County compared to statewide The current unemployment rate in White Pine County is 3.6 percent compared to 5.1 percent statewide.
TABLE 4: UNEMPLOYMENT RATES
Source: State of Nevada, Department of Employment, Training & Rehabilitation (DETR) Research & Analysis Bureau
The following table compares employment in White Pine County with employment statewide. Clearly, White Pine County has a much greater intensity in agriculture, including forestry, fishing, hunting, and mining. Development in the utility sector would help to diversify the economy of White Pine County. Current employment in this category is below the State average. See the “Transportation, Warehousing and Utilities” industry sector in the table below.
TABLE 5: EMPLOYMENT BY INDUSTRY
Source: U.S. Census Bureau, 2019 ACS 5-Year Estimates
In many industry sectors, wages are higher in White Pine County than statewide, while in other sectors they are lower. However, the overall average wage of $55,516 in White Pine County is significantly higher than the statewide average wage of $42.345
TABLE 6: WAGES BY INDUSTRY
Wages by Industry
Source: U.S. Census Bureau, 2022 ACS 5-Year Estimates
Proposed Development
The proposed Project is a closed-loop pumped storage hydropower facility that would be located approximately 7 miles northeast of Ely with the capacity to generate up to 1,000MW.
The Project is located almost entirely on BLM lands and therefore the Project would be authorized to use property under a Right-of-Way Grant from the BLM per CFR Title 43. The project is anticipated to be online as early as 2030 and anticipates a total investment of approximately $2.3 billion.
Tax Revenues
Property Tax Revenues
Property tax revenues are based both on taxable value and tax rates. Taxable value is a combination of real property (land and buildings) and personal property (equipment). Real property is considered “secured” property whereas personal property is considered “unsecured” property. Total Project investment is estimated at $2.3 billion, with $1,550,000,000 in real property and $750,000,000 in personal property.
While real property can appreciate in value each year, Nevada law requires that a 1.5 percent depreciation factor be applied each year, up to 50 years, to the appreciated value for purposes of calculating assessed value This report assumes a 3 percent appreciation factor annually for real property, less the annual depreciation rate of 1.5 percent as required by Nevada law. Taxable value is calculated at 35 percent of assessed value.
Personal property taxable value is depreciated each year based on guidelines provided by the Nevada State Taxation Personal Property Manual.1 The depreciation schedule is as follows:
The assessed value of the Project is estimated at $805 million in its first year, which is more than double the total assessed value of the top ten highest valued taxpayers in White Pine County currently.
TABLE 8: 10 HIGHEST ASSESSED TAXPAYERS, WHITE PINE COUNTY NV
Source: Nevada Department of Taxation 2023-2024 Secured Roll
Taxing entities for property tax purposes include White Pine County, White Pine School District, White Pine Hospital District, and the State of Nevada. Taxable value is 35% of assessed value.
TABLE 9: TAXING ENTITIES AND PROPERTY TAX RATES
Given the above property tax values and tax rates, incremental taxes would reach nearly $595 million over 20 years with no abatement. With the Renewable Energy Tax Abatement (RETA), the total amount of property taxes paid would reach nearly $268 million, all of which would go to the taxing entities listed above.
TABLE 10: 20-YEAR PROJECTED PROPERTY TAX GENERATION WITH POTENTIAL ABATEMENT
Pine County
$235,581,720 White Pine School District (local amount only) $40,485,933 $30,081,974 State Education Fund $121,945,580 $90,608,354
White Pine Hospital District $87,800,818 $65,238,015
State of Nevada $27,640,998 $20,537,894
TOTAL Taxes $594,931,836 $442,047,956 Abated Amount - 55% ($327,212,510) ($243,126,376) Unabated Amount $267,719,326 $198,921,580
In comparison, over a 40-year time period, the total amount of taxes reaches $1.25 billion, with an unabated amount of more than $923 million.
Annual property tax revenues generated by the project, with abatement, would reach over $12 million. Property tax revenue projections for White Pine County for 2023 were estimated at around $13 million. This is a significant increase for local government which should have very little additional expense related to the proposed development. Table 11 shows property tax generation from the project for the first 5 years of project operation; property taxes are expected to stay above $12 million for the lifecycle of the project.
Job Creation and Wages Paid
Jobs will be created for both construction and ongoing operations at the Project. The construction jobs, however, will be temporary and will last for a period of approximately 5 to 6 years. Workers from outside of the County will be needed to fill the demand for the construction jobs.
The proposed development will add an estimated 400 to 500 direct construction jobs at the Project site each year for a period of approximately 5 to 6 years. The construction jobs are projected to pay average wages of $55-$62 per hour, or between $114,000 and $129,000 annually, including benefits. These 400 to 500 direct jobs in the local economy have a multiplier effect in the larger region, creating additional indirect and induced jobs for a period of 5 to 6 years. Indirect jobs are the jobs created as a result of spending by the pumped storage project (i.e., business-to-business transactions), whereas induced jobs are a result of spending by employees from the increased wages paid.
In addition, the project anticipates 35 full-time employees with average wages ranging between $80,000 and $120,000 per year, excluding benefits. Based on information provided by the Nevada Labor Department, the average wage in White Pine County is $1,345 weekly 2 This corresponds to an average annual wage of $69,940, excluding benefits.
Economic Impacts
Economic impacts have been assessed using IMPLAN modeling software with localized performance data for White Pine, NV. Direct, indirect, and induced impacts have been assessed for both ongoing and construction impacts.
Ongoing Operating Impacts
Direct effects from initial spending creates additional activity in the local economy. Indirect effects are the result of business-to-business transactions indirectly caused by the direct effects. Induced effects are the
2 https://nevadaworkforce.com/Area-Profiles/White-Pine-County
results of increased spending due to increased income created by the direct and indirect effects. Based on the analysis, the initial 35 jobs at the pumped storage project will create demand for an additional 53 indirect jobs and 15 induced jobs.
Labor Income is defined as all forms of employment income including wages, salaries, benefits, and proprietor income. Value Added is defined as the difference between total output and the cost of intermediate inputs. Output equals the value of industry production which is equal to sales plus net inventory change.
3
Not surprisingly, the top economic impacts in terms of job creation are to the electric power transmission and distribution industry.
The top 15 industries by estimated growth percentage are shown below, with electric power transmission, distribution and generation showing the most growth.
Construction Impacts
The economic effect of construction jobs, although significant, would be temporary and are anticipated to last approximately 5 to 6 years. As shown previously in this study, White Pine County has 215 construction jobs. It is anticipated that this Project would create an estimated 400 to 500 construction jobs per year for approximately 5 to 6 years. Therefore, workers would come to White Pine County from outside of the area. It is not reasonable to assume that all their wages would be spent in White Pine County. Many of them may find housing outside of the County or be there on a temporary basis, sending wages “home” to family members. However, there would be significant impacts in many areas including temporary lodging, restaurants, food, gasoline, etc. The IMPLAN model measures the anticipated impacts of these workers, while mitigating for the anticipated leakage of a large portion of their wages outside of County boundaries.
Total employment in the table below shows the estimated number of full-time equivalent jobs (which may include part-time and seasonal workers) over the entire construction time period. The last column in the table below adjusts these numbers by dividing total employment by the number of years of construction to estimate the average annual employment. There will undoubtedly be periods of peak employment with higher numbers as well as periods with fewer workers.
TABLE 15: ECONOMIC INDICATORS - CONSTRUCTION
Source: IMPLAN; ZPFI
Construction will also provide significant tax impacts. The impacts in the table below are for a total of 3 to 4 years and are not stated annually.
TABLE 16: TAX IMPACTS - CONSTRUCTION
Source: IMPLAN; ZPFI
Not surprisingly, the top 5 industries in terms of employment gains from construction include construction itself.
Source: IMPLAN; ZPFI
Summary of Economic Impacts
In summary, major economic impacts from this project include:
• Creation of 400 to 500 direct construction jobs annually for a 5 to 6-year period, with additional construction-related indirect and induced jobs.
• Creation of 35 full-time jobs at the project site, with annual wages estimated between $80,000 and $120,000, excluding benefits
• Additional 68 ongoing indirect and induced jobs created as a result of the 35 direct jobs at the project site; and
• Incremental property tax revenues of $268 million to the taxing entities over 20 years.
*Construction Impacts are stated for the entire 5–6-year period of construction; ongoing Impacts are stated annually.