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 .

--- NOTICE ---
This message is for the designated recipient only and may contain

confidential, privileged or proprietary information. If you have 

received it in error, please notify the sender immediately and 

delete the original and any copy or printout. Unintended 

recipients are prohibited from making any other use of this 

e-mail. Although we have taken reasonable precautions to ensure 

no viruses are present in this e-mail, we accept no liability for 

any loss or damage arising from the use of this e-mail or 

attachments, or for any delay or errors or omissions in the 

contents which result from e-mail transmission.
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 Economy
Four 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