### Fw: Four Corners Economic Impacts Four Corners Economic Impacts

Colleen McKaughan Colleen McKaughan to: Anita Lee, Eugene Chen, Cheryl Nelson, Steve Frey, Scott Bohning, Ann Lyons 02/01/2012 12:49 PM

History: This message has been replied to and forwarded .

Here is the analysis from APS.

Colleen W. McKaughan Associate Director, Air Division USEPA, Region 9 (520) 498-0118

----- Forwarded by Colleen McKaughan/R9/USEPA/US on 02/01/2012 01:51 PM -----

From: <Edward.Fox@aps.com> To: Colleen McKaughan/R9/USEPA/US@EPA Cc: <Peter.Ewen@aps.com>, <Susan.Kidd@aps.com> Date: 02/01/2012 01:39 PM Subject: Four Corners Economic Impacts

Colleen – attached is the economic analysis regarding the impacts of closing Units 1-3 at the Four Corners Power Plant. As I discussed with you previously, we cannot separate the impacts on the Navajo Nation from the regional impacts. We do not have that fine grained information. And, as noted below, we do not have the model needed to determine potential multiplier-impacts as a result of reduced royalty payments to the Nation . Below is a short discussion of the methodology we used, and attached is the report.

Let me know if you have any questions.

The economic impact of the Four Corners Generating Station on the local economy in the Farmington , NM region and the Navajo Nation, which overlap in that region, was derived through the application of commonly-used economic multipliers estimated and published by the US Bureau of Economic Analysis (BEA). Economic multipliers are numerical measures of the relationship between economic activity in one industry or segment of the economy and all other industries, and are estimated by BEA for various geographic areas and time periods . For the purposes of this analysis, the economic multipliers derived from the industry relationships in the State of New Mexico in 2008 were used because they are the most recently published estimates pertaining to New Mexico .

The analysis entails compiling the amounts paid by Four Corners in the form of wages and salaries to workers , payments to vendors for the supply of goods and services used by the plant , and tax payments to local jurisdictions . The estimates provided on the attached table are based on data for 2010. Payroll amounts relate to workers, including management employees, located physically at the plant site during 2010. Vendor payments relate to amounts paid to contractors or businesses who are located in the region , including payments to BHP for coal supplied to the plant. The vendor payments are further disaggregated into the industry category which best represents the economic activity reflected in each transaction, and the economic multiplier is used to measure the full impact of those expenditures on the number of jobs in the region , the income earned in the region, and the gross amount of activity created in the region. Finally, the tax payments which are identifiable as being related to the Four Corners plant are documented, although BEA does not publish multipliers for those payments .



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## Four Corners Payments 2010 ($MM) Earnings ($MM) Output ($MM) Jobs

Payroll (1) 

## 83.5 $ 168.4

$

- 460

Vendor Purchases 292.1 $ 107.8

$ 496.6

$ 2,832

Total Impact 375.6 $ 276.2

$ 496.6

$ 3,292

Local Tax and Royalty Payments
Royalties to Navajo Nation (2) 

## 26.8 $

Navajo PIT/BAT

APS 7.5 $

BHP (2) 

## 7.7 $

Total 15.2 $

San Juan County Property Taxes

APS 2.0 $

BHP (2) 

## 2.3 $

Total 4.3 $

Total Local Tax/Royalty Payments 46.3 $

(1) Includes employee benefits payments (2) BHP payments are invoiced to Four Corners as coal is delivered 

## Economic Impact 

# Economic Impact of Four Corners Generating Station on the Local EconomyFour Corners Category of Spend Payments ($000s) Output ($000s) Earnings ($000s) Jobs
Accommodation & Food Services 543 $ 942 $ 275

$ 13 Admin Services & Waste Mgmt 6,987 $ 12,481 $ 3,269

$ 84 Arts & Other Community Support 47 $ 79 $ 25

$ 295
Construction 23,952 $ 45,462 $ 14,546

$ 423
Educational Services 137 $ 256 $ 100

$ 4
Finance 0 $ 1 $ 0

$ 0
Health Care & Social Assistance 1,210 $ 2,253 $ 905

$ 44
Information 213 $ 360 $ 82

$ 2 Management of companies and enterprises

- $

- $

-

$ 0 Manufacturing 7,862 $ 12,073 $ 2,716

$ 71 Mining 215,528 $ 359,288 $ 66,638

$ 1,430
Other Services 2,687 $ 5,039 $ 1,756

$ 53 Professional, scientific, and technical services 18,103 $ 33,852 $ 12,391

$ 296
Real Estate 39 $ 52 $ 5

$ 0
Retail 1,318 $ 2,205 $ 738

$ 28 Transportation & Warehousing 160 $ 324 $ 97

$ 3
Utilities 13,345 $ 21,909 $ 4,248

$ 85 Payroll (Incld Benefits) 83,497 $

- $ 168,380

$ 460

$

Total 375,629 $ 496,578 $ 276,168

$ 3,292 Economic Impact 

## Economic Impact of Four Corners Generating Station on the Local Economy