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User-Friendly Tool to Calculate 

Economic Impacts from Coal, 

Natural Gas, and Wind: The 

Expanded Jobs and Economic 

Development Impact Model 

(JEDI II) 

Preprint 

S. Tegen 

National Renewable Energy Laboratory 

M. Goldberg 

MRG & Associates

M. Milligan, Consultant 

National Renewable Energy Laboratory 

To be presented at WINDPOWER 2006 

Pittsburgh, Pennsylvania 

June 4–7, 2006 

Conference Paper 

NREL/CP-500-40085 

June 2006 
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A User-Friendly Tool to Calculate Economic Impacts from Coal, Natural Gas, and 

Wind: The Expanded Jobs and Economic Development Impact Model (JEDI II) 

Suzanne Tegen, National Renewable Energy Laboratory 

Marshall Goldberg, MRG & Associates 

Michael Milligan, Consultant, National Renewable Energy Laboratory 

Abstract 

The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) has 

developed new and expanded economic impact models to compare coal, natural gas, and 

wind power (Jobs and Economic Development Impact II, or JEDI II). The models include 

multipliers for jobs, income, and other impacts. Developed for statewide parameters, they 

can also be used to conduct a regional analysis. 

Executive Summary 

Policymakers today are faced with decisions about how utilities in their region should 

provide electricity to their service territories. Each type of generating technology has 

geographic, technological, economic, and political advantages and limitations. To help 

address the need for quantitative tools that can help evaluate the economic benefit of 

alternative fuel choices, the original Jobs and Economic Development Impacts (JEDI) 

model has been expanded so it can be used to assess impacts of coal and gas plants in 

addition to wind plants. 

In this paper, we examine the impacts of building new coal, gas, or wind plants in three 

states: Colorado, Michigan, and Virginia. The technologies are compared based on 

generation of an equivalent amount of electricity over the 20-year periods of our analysis. 

Our findings indicate that local/state economic impacts are directly related to the 

availability and utilization of local industries and services to build and operate the power 

plant. For gas and coal plants, the economic benefit depends on whether the fuel is 

obtained from within the state, out of state, or some combination. We also find that the 

taxes generated by power plants can have a significant impact on local economies via 

increased expenditures on public goods. Because of significant differences in the way 

taxes are assessed and because payments in lieu of taxes are sometimes substituted for 

actual tax payments, there is significant variation in this aspect of the economic impacts. 

In Colorado, building a new wind plant will have a greater economic impact than 

building a new coal plant, even if 40% of the power plant coal is from within the state. In 

Michigan and Colorado, new natural gas plants utilizing in-state gas bring the largest 

economic benefit to the states due to high gas prices (Virginia does not produce its own 

natural gas). However, high gas prices may make new natural gas plants cost-prohibitive. 

In Virginia, coal plants need to purchase more than 25% in-state coal for the economic 

benefits from coal to be greater than those from new wind power. 

1
Introduction

Policymakers today are faced with decisions about how utilities in their region should 

provide electricity to their service territories. This complicated question includes 

choosing a resource from which the electricity will be generated. Each resource has 

geographic, technological, and political advantages and limitations. This research focuses 

on calculating the economic impacts to a state of new electricity generation from a coal, 

natural gas, or wind power plant. The comparison of fuel types is done on a permegawatt-hour (MWh) basis, meaning that each new plant will produce the same annual 

amount of electricity. Although these three resources are not the only resource options 

available, they are the most common in the United States today for grid-connected, 

utility-scale power. 

The primary goal of the original JEDI model was first to provide a tool for wind 

developers, renewable energy advocates, government officials, decision makers, and 

other potential users who might not have the resources to develop their own economic 

development model; and second, to easily identify the local economic impacts associated 

with constructing and operating wind power plants. The second goal was to facilitate 

broad access and usage of the model by making it electronically available through 

NREL’s Wind Powering America program. The goal of this current version, JEDI II, is to 

expand the usefulness of this tool by addressing additional electricity resources: coal and 

natural gas. 

To accommodate a broad user base with varying experience, JEDI II was designed in a 

user-friendly format that can be easily modified. This insures the greatest flexibility for 

inexperienced spreadsheet users, those unfamiliar with economic impact analysis, and 

more experienced users who need this type of analysis. Cautions and reminders have 

been added to make sure users enter as much context-specific information as possible. 

Especially when comparing the three very different resources, it is important to gather as 

much local resource-specific data to enter into the model as possible (e.g., state and 

county property tax percentages or tax breaks for certain resources). 

The new JEDI II model structure is nearly identical across technologies, and only basic 

information is needed to describe each power option. Each model has default values for 

all 50 states, but each can also be applied to smaller regions or counties with the 

appropriate adjustments and additional data. Because local and state economies have 

different characteristics, the economic impacts of a given power plant will not be the 

same in different parts of the United States. 

Methodology 

Basic (minimum) information about the new coal, natural gas, or wind plant must be 

entered into the model to calculate project cost as well as the number of jobs, income

(e.g., wages and salary), and economic activity that will accrue to the area analyzed. This 

includes state, county, or region to be analyzed; the construction year; and the size of the 

facility. The more specific the information is to the project, the more accurate the model’s 

output will be. To evaluate these impacts, input-output (also commonly referred to as 

multiplier) analysis is used. 

2
Input-output models were originally developed to trace supply linkages in the economy. 

For example, they show how purchases of wind turbines not only benefit turbine 

manufacturers but also the fabricated metal industries and other businesses supplying 

materials to those manufacturers. The benefits that are ultimately generated by 

expenditures for power plants depend on the extent to which those expenditures are spent 

locally and the structure of the local economy. Consistent with the spending pattern and 

state-specific economic structure, different expenditures support a different level of 

employment, income, and output.

Direct effect: Direct effects are the on-site or immediate effects created by an 

expenditure. In constructing a wind plant, for example, it refers to the on-site jobs of the 

contractors and crews hired to construct the plant. It also includes the jobs at the turbine 

manufacturing plants and the jobs at the tower and blade factories. 

Indirect effect: Indirect effects refer to the increase in economic activity that occurs 

when a contractor, vendor, or manufacturer receives payment for goods or services and in 

turn is able to pay others who support their business. For instance, this impact includes 

the banker who finances the contractor, the accountant who keeps the contractor’s books, 

and the steel mills and electrical equipment manufacturers and other suppliers that

provide necessary materials to the natural gas or other plant.

Induced effect: Indirect effects are changes in spending that are caused by, for example, 

the increased wealth and income of those persons directly and indirectly employed by the 

power plant project. This includes spending on food, clothing, or day care by those 

directly or indirectly employed by the project, retail services, public transit, cars, income

taxes, medical services and insurance, and much more. 

The sum of these three effects yields a total effect that results from a single expenditure. 

To accomplish this analysis, state-specific multipliers and personal expenditure patterns

are used to derive the results. These state-by-state multipliers for employment, wage, and 

salary income and output (economic activity), and personal expenditure patterns are 

adapted from the IMPLAN Professional model. The changes in expenditures brought 

about by investments are matched with their appropriate multipliers for each sector

affected by the change in expenditure. 

Inputs 

For each state analysis, we included as much local information as possible. As stated

above, to achieve the most localized results, it is important to enter as much site-specific 

information as possible. Figure 1 is an example of a JEDI II input screen and identifies 

some of the model inputs available to more accurately describe the specific plant. If no

site-specific details are provided, JEDI II will use default values. The default values are 

based on state data and national averages (in the case of power generation data). 

3
Construction or capital cost 

The cost per kilowatt (kW) to construct a new coal, gas, or wind plant can vary greatly 

across the United States. Some state utility boards require stricter or more lenient 

environmental standards, which will change the capital cost of the plant. For example, a 

new coal plant in South Dakota (Big Stone II) is priced at approximately $1900/kW, 

whereas a new coal plant in Colorado (Comanche III) is estimated to cost less than 

$1500/kW. These distinctions will make a significant difference in the economic impact 

during construction years. 

Operations and maintenance 

For natural gas and coal, operations and maintenance (O&M) costs are entered in dollars 

per kilowatt for fixed costs as well as in dollars per MWh for variable costs. Wind power 

O&M is measured only in dollars/kW. Although there is no national consensus on O&M 

costs, for this study we assumed the same costs in each state: $22/kW for wind, 

$1.90/MWh for coal variable and $20kW for coal fixed, $2.30 for natural gas variable 

and $10 for natural gas fixed. These O&M costs can be easily adjusted in the model. 

Fuel price and fuel origin 

The relatively high and volatile cost of natural gas can make the option to build a new gas 

plant prohibitively expensive. JEDI II does not account for the associated costs to the 

electricity ratepayer. However, electricity planners and decision-makers will. Therefore, 

even though new natural gas plants with local natural gas may contribute the largest 

dollar flow to the state economy, coal, wind, or another option may be chosen over gas 

due to its fuel price risks. 

If natural gas comes from within the state, impacts from natural gas purchases will be 

significant due primarily to the high cost of fuel—usually topping that from wind and 

coal. On the other hand, if coal is from within the state, economic benefits from coal may 

not top those of gas or wind because coal still costs significantly less than gas. This is 

highly dependent on the type and price of coal, as results show. 

Percentage of local labor used 

If contractors building and operating the power plants are from out of state, they will 

often bring in construction crews from outside the state. In contrast, plants typically don’t 

import workers into the state to perform annual maintenance activities. Most O&M labor 

comes from within the state, and for most power resources, the local labor percentage is 

very high. 

Default values for JEDI II construction labor are 50% for coal and 50% for natural gas. 

For wind, JEDI breaks down the labor into several parts. For example, the default for 

supervision is 0% while the default for foundation labor is 100%. For the annual O&M 

impacts, default values are also broken down for specific technologies. Because these 

parameters are critical to the results, we recommend that model users obtain current, local 

information that is appropriate for the analysis. 

4
Landowner revenue

This is a vital issue for rural economic development. Rural landowners are often in 

difficult economic situations, and the land lease payments they may receive from wind 

developers are significant. Landowners typically receive between $3,000 to $6,000 per 

turbine per year, depending on the size of the turbine and the contract agreement. The 

JEDI II model calculates its default value by using a base value of $4,000 per 1.5-MW 

turbine. This number can, of course, be adjusted to match specific contract agreements or 

state averages. One advantage to building new wind farms versus coal and gas plants is 

that farmers and ranchers can continue to grow crops or graze livestock, while also 

gaining revenue from land leases. 

Property taxes 

Property taxes can greatly impact the overall economic outlook of the project. States 

typically use one specific number with which to assess power plants. For example, a 

percentage of the “real property” value is taken (typically about 80% to 90% of installed 

plant cost). Then, states apply their assessment rate – usually around 30%. From this 

number, each local jurisdiction (usually the county) applies its mill levy (typically around 

1%). The examples in this paper show that local mill levies make a big difference. In fact, 

high property taxes or mandatory payments in lieu of taxes can drive developers out of 

the state to a location with more favorable tax rules. Table 1 details property taxes in 

Colorado, Michigan, and Virginia. This information was obtained from Offices of 

Taxation or Treasury in the respective states. 

Table 1. Approximate State-Specific and JEDI Default Property Tax Values 

State % of

Capital 

Cost Taxed 

Assessed 

Value 

Mill or 

Local %

Comment

CO 85% 29% 1% Coal and gas plants often receive sales and 

property tax breaks during the first 10 years 

MI 100% 50% 1% Wind farms are typically exempt for a 

specific time, during which they make 

lesser payments in lieu of taxes

VA 84% 73% 0.1% Assessed and local values are variable and 

determined by individual localities 

JEDI 85% 33% 1% Default model assumptions 

In some cases, if exemptions from property taxes are given to encourage economic 

development (in the case of gas and coal) or cleaner technology (in the case of wind), 

payments in lieu of taxes are often made instead. 

Discount rate 

For this analysis, we did not apply a discount rate or use depreciation values. These 

numbers are highly variable, depending on user assumptions. Discount rates and 

depreciation values, along with specific funding and repayment mechanisms, can be 

applied to the results from JEDI II. 

5
Figure 1. Sample JEDI II input screen 

Results 

To demonstrate the JEDI II model and show some representative results, we applied the 

model to three states with different economic characteristics: Colorado, Michigan, and 

Virginia. All results were obtained using the default JEDI II assumptions, unless 

otherwise noted. The research for this work began in 2005, but construction was assumed 

to begin in 2006. As a result, the monetary values (and results) are reported in 2005 

dollars. 

We expect that coal plants will take 4 years to construct, gas plants 2 years to construct, 

and wind turbine installations 1 year to construct. In all three states, we assume that wind 

will be installed in various locations (i.e., not one large wind farm). 

6
As stated above, power plants are compared on a per-MWh or “energy equivalent” basis. 

The following table illustrates this concept and shows values for each technology. States 

have different assumed capacity factors for coal and wind plants. 

Table 2. Equivalent Generation 

Capacity Factor Equivalent MW Needed MWh Produced Per Year

Coal 80%-85% 276 - 300 ~ 2,084,880 

Gas 87% 270 2,057,724 

Wind 25%-35% 680 – 900 ~ 2,084,880 

Below are the results and assumptions specific to three states: Colorado, Michigan, and 

Virginia. Each section details the state-specific inputs and individualized JEDI II outputs. 

Colorado 

In Colorado, new coal plants are currently being proposed and approved, so we used 

current available data wherever possible. The construction cost for a coal plant is 

estimated to be $1450/kW, so we entered this amount into JEDI II instead of accepting 

the default value. For most new coal plants proposed, the coal will come from

Wyoming’s Powder River Basin. However, we performed a sensitivity analysis to show 

the impacts of coal from Colorado. We found that local coal provides a greater economic 

benefit to the state (Figure 3). Based on interviews with plant developers and power plant 

contractors, the percentage of in-state labor used for the construction of the project was 

set at 20%. This local percentage change from the JEDI II default of 50% in-state labor 

can make a significant difference. For the Michigan and Virginia analyses, we used the 

JEDI II default of 50% in-state labor because no more localized information was 

available. Unfortunately, this type of information is often considered proprietary, so it is 

difficult to obtain. 

It is likely that some of the natural gas used for the new power plant will come from

within the state’s borders. Estimates for local natural gas (i.e., produced within the state) 

purchases vary greatly, from 25% to 66%. For this research, we assumed that 40% of the 

natural gas will be from Colorado gas wells. Gas prices have fluctuated greatly, and JEDI 

II users may want to use a range of prices for their projects. At the time of this report, 

$7/MMBtu was the current Energy Information Administration price estimate, based on 

current prices. 

The capacity value for wind plants in Colorado is 35%. Construction of a Colorado wind 

plant is assumed to be $1400/kW. Both of these values were user inputs into the model. 

Of course, these values can be easily adjusted, as was done for Michigan and Virginia. 

Property taxes in Colorado are determined by taking the value of the “real and personal” 

property – about 85% of the construction cost. The assessed value is 29% of the 

construction cost, to which the local mill levy must be applied. Taxes make a big 

difference in the outcome of the impact assessment, and tax inputs should therefore be as 

precise as possible. In Colorado, recent coal and gas plants have received property tax 

breaks for the first 10 years of operation. For example, in Pueblo, Colorado, the newly 

proposed Comanche 3 coal plant will receive a 50% reduction in property taxes for the 

7
first 10 years of operation. This comparative analysis assumes that coal and gas plants in 

Colorado are given this same tax break. We have no examples of tax breaks for wind in 

Colorado. However, below we will describe one such example in Michigan. 

Table 3 shows in-state economic impacts to Colorado from new power generation. Jobs

are the full-time equivalent in-state jobs created by the new power plant. Earnings are 

salaries and wages earned by workers. Output is the total economic output, including all 

economic activity relating to the new power plant (salary earnings, machine parts, 

electricity used, rental equipment, etc.).

8
Figure 4. JEDI II results for Colorado – statewide economic impacts 

Colorado coal Jobs Earnings Output

 During construction period 

 Direct Impacts 465 $17.17 $57.19 

 Construction Sector Only 465 $17.14 $57.07 

 Indirect Impacts 189 $6.87 $18.47 

 Induced Impacts 202 $6.51 $20.49 

 Total Impacts (Direct, Indirect, Induced) 857 $30.55 $96.15 

 

 During operating years (annual) 

 Direct Impacts 72 $3.74 $6.76 

 Plant Workers Only 27 $2.01 

 Indirect Impacts 19 $0.69 $2.07 

 Induced Impacts 29 $0.94 $2.97 

 Total Impacts (Direct, Indirect, Induced) 120 $5.36 $11.80 

Colorado natural gas Jobs Earnings Output

 During construction period 

 Direct Impacts 322 $11.87 $39.67 

 Construction Sector Only 320 $11.80 $39.28 

 Indirect Impacts 131 $4.76 $12.83 

 Induced Impacts 140 $4.51 $14.18 

 Total Impacts (Direct, Indirect, Induced) 593 $21.14 $66.68 

 

 During operating years (annual) 

 Direct Impacts 138 $9.02 $43.03 

 Plant Workers Only 14 $1.61 $1.61 

 Indirect Impacts 116 $4.42 $14.08 

 Induced Impacts 115 $3.72 $11.71 

 Total Impacts (Direct, Indirect, Induced) 369 $17.17 $68.81 

Colorado wind Jobs Earnings Output

 During construction period 

 Direct Impacts 866 $32.85 $108.79

 Construction Sector Only 830 $30.64 $101.98

 Indirect Impacts 356 $12.96 $35.01 

 Induced Impacts 395 $12.74 $40.10 

 Total Impacts (Direct, Indirect, Induced) 1,618 $58.55 $183.90

 

 During operating years (annual) 

 Direct Impacts 152 $9.06 $15.12 

 Plant Workers Only 88 $6.73 

 Indirect Impacts 43 $1.56 $4.95 

 Induced Impacts 64 $2.07 $6.53 

 Total Impacts (Direct, Indirect, Induced) 259 $12.69 $26.60 

9
Statewide economic impacts from new electricity generation

Construction + 20 years of operation ($2005)

Inputs: 40% Gas from CO, 0% coal from CO

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Coal (280 MW) Gas (270 MW) Wind (680 MW)

Dollars in millions

Equivalent generation

Total operations

Total construction

Figure 6. Sensitivity analysis: JEDI II results for Colorado with 40% in-state coal 

Statewide economic impacts from new electricity generation

Construction + 20 years of operation ($2005)

Inputs: 40% Gas from CO, 40% coal from CO

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Coal (280 MW) Gas (270 MW) Wind (680 MW)

Dollars in millions

Equivalent generation

Total operations

Total construction

Note that the above chart shows that Colorado will receive greater economic benefit from

wind over coal, even if 40% of the coal is from Colorado. This is due in part to the Rocky 

Mountain region’s inexpensive coal with a low heat rate. 

10
Michigan 

Table 4 and Figure 4 show in-state economic impacts for Michigan from new power 

generation resources. We assumed that 25% of the natural gas would come from within 

Michigan’s borders and that all of the coal will be brought in from out-of-state by ship 

and rail. Construction costs for the coal plant in Michigan is higher than in Colorado,

based on current plant information. Michigan’s coal plant construction cost is $1800/kW.

Due to the lower capacity factor for the Michigan coal plant, it will require 300 MW to

reach the equivalent energy generation of the benchmark natural gas plant. 

JEDI II results from Michigan’s wind-generated electricity are based on the assumption 

that the wind farms will be exempt from property taxes for the first 6 years of the project. 

Instead, the wind farms will be required to make annual payments in lieu of taxes, 

amounting to $5,000 per turbine. After the sixth year, the wind farm will be expected to 

pay property taxes. This assumption is based on a number of possible scenarios suggested 

by a Michigan wind developer. The 6 years of payments in lieu of taxes have been added 

to the 14 years of regular Michigan taxes, which are relatively high due to the assessed 

rate of 50%, but also dependent on the local taxation rate or mill levy. 

11
Table 4. JEDI results for Michigan: Statewide Economic Impacts 

Michigan Coal Jobs Earnings Output

 During construction period 

 Direct Impacts 1,123 $43.85 $134.91

 Construction Sector Only 1,123 $43.81 $134.74

 Indirect Impacts 429 $15.16 $38.27 

 Induced Impacts 629 $19.81 $58.58 

 Total Impacts (Direct, Indirect, Induced) 2,181 $78.82 $231.76

 

 During operating years (annual) 

 Direct Impacts 74 $4.08 $7.04 

 Plant Workers Only 31 $2.26 

 Indirect Impacts 20 $0.73 $2.08 

 Induced Impacts 52 $1.65 $4.88 

 Total Impacts (Direct, Indirect, Induced) 146 $6.47 $14.00 

 

Michigan Natural Gas Jobs Earnings Output

 During construction period 

 Direct Impacts 364 $14.19 $43.84 

 Construction Sector Only 362 $14.12 $43.44 

 Indirect Impacts 139 $4.92 $12.45 

 Induced Impacts 204 $6.42 $18.98 

 Total Impacts (Direct, Indirect, Induced) 707 $25.52 $75.26 

 

 During operating years (annual) 

 Direct Impacts 133 $7.38 $28.48 

 Plant Workers Only 14 $1.61 

 Indirect Impacts 81 $3.01 $8.38 

 Induced Impacts 108 $3.41 $10.09 

 Total Impacts (Direct, Indirect, Induced) 323 $13.80 $46.95 

 Michigan Wind Jobs Earnings Output

 During construction period 

 Direct Impacts 1,167 $46.75 $143.98

 Construction Sector Only 1,125 $43.88 $134.97

 Indirect Impacts 453 $16.09 $40.73 

 Induced Impacts 689 $21.69 $64.14 

 Total Impacts (Direct, Indirect, Induced) 2,308 $84.52 $248.85

 

 During operating years (annual) 

 Direct Impacts 203 $11.60 $19.25 

 Plant Workers Only 117 $8.52 

 Indirect Impacts 52 $1.87 $5.55 

 Induced Impacts 91 $2.87 $8.48 

 Total Impacts (Direct, Indirect, Induced) 346 $16.34 $33.27 

 

12
Statewide economic impacts from new electricity generation in Michigan

Construction + 20 years of operation ($2005)

Inputs: 25% Gas from MI, 0%coal from MI

$-

$200

$400

$600

$800

$1,000

$1,200

Coal (300 MW) Gas (270 MW) Wind (900 MW)

Dollars in millions

Equivalent generation

Total operations

Total construction

 

Figure 4. Michigan’s local economic impacts 

As the following figure illustrates, natural gas prices in the United States have been 

fluctuating over the past few years. Though prices reached over $12/MMBtu, they have 

since decreased, depending on their origin and contract term length. For this analysis, we 

assumed $7 per MMBtu. 

Source: Energy Administration Information’s Natural Gas Index 

Figure 5. Price of natural gas, May 2006 

13
As this report was being finalized in late May 2006, gas prices dropped to around 

$6/MMBtu (according to the Energy Administration). Figure 6 shows Michigan results

with this most recent gas price. 

Statewide economic impacts from new electricity generation in Michigan

Construction + 20 years of operation ($2005) Inputs: 25% Gas from MI

Sensitivity: Gas price = $6/MMBtu

$-

$200

$400

$600

$800

$1,000

$1,200

Coal (300 MW) Gas (270 MW) Wind (900 MW)

Dollars in millions

Equivalent generation

Total operations

Total construction

Figure 6. Sensitivity Analysis for Michigan with Gas Price at $6/MMBtu1

Virginia 

It is assumed that Virginia’s in-state coal producers will supply 40% of the coal (based on 

an analysis of 2003 Energy Information Administration data) to this new power plant.2

No natural gas will come from within the state. Construction costs for the coal plant in 

Virginia are higher than in Colorado and lower than in Michigan, based on current 

available data. The Virginia coal plant construction cost is $1540/kW. Due to the 

capacity factor for the Michigan coal plant, it will be 276 MW to reach the equivalent 

generation to the 270 MW natural gas plant. The capacity factor for wind in Virginia is 

assumed to be 30%. 

Virginia property taxes are highly variable due to local control over assessed and “stated 

ratios” which are similar to mill rates. The State Corporation Commission performs

assessments for utilities. The property tax is determined by a valuation process, which 

takes the sum of the original cost of the power plant, less depreciation for non-land 

inventory within each municipality. To that value, the Department of Taxation applies the 

“local ratio” according to the Code of Virginia.3

 Then the annual Tax Rate from the 

locality is applied to the new assessed number. The local tax rate is determined by the 

locality. For this analysis we used average rates from examples provided by the State 

 

1

 http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp 2

 Virginia produced 5,669 short tons of coal in 2003, according to the Energy Information Administration.

http://www.eia.doe.gov/cneaf/coal/page/coaldistrib/d_va.html

3 Code of Virginia Title 58.1 Taxation – 58.1-2604.

14
Corporation Commission. As shown in Table 1, although the assessed value is high, the 

local tax rate is only approximately one-tenth of average mill rates, so the property tax 

liability to utilities ends up on the low end of the spectrum of average property taxes. 

Table 5 identifies the in-state economic impacts for Virginia from new power generation. 

Figure 7 shows the output information. And Figure 8 is the result of a sensitivity model 

run, in which only 20% of the coal comes from within Virginia’s borders. 

15
Table 5. JEDI II Results for Virginia: Statewide Economic Impacts 

Virginia Coal Jobs Earnings Output

 During construction period 

 Direct Impacts 922 $32.31 $106.19

 Construction Sector Only 921 $32.28 $106.06

 Indirect Impacts 339 $12.65 $31.16 

 Induced Impacts 407 $14.01 $40.15 

 Total Impacts (Direct, Indirect, Induced) 1,668 $58.97 $177.50

 

 During operating years (annual) 

 Direct Impacts 150 $8.24 $25.94 

 Plant Workers Only 28 $2.08 

 Indirect Impacts 66 $2.75 $7.42 

 Induced Impacts 88 $3.02 $8.66 

 Total Impacts (Direct, Indirect, Induced) 304 $14.01 $42.03 

Virginia Natural Gas Jobs Earnings Output

 During construction period 

 Direct Impacts 379 $13.30 $43.84 

 Construction Sector Only 377 $13.22 $43.44 

 Indirect Impacts 140 $5.21 $12.87 

 Induced Impacts 168 $5.77 $16.54 

 Total Impacts (Direct, Indirect, Induced) 686 $24.28 $73.24 

 

 During operating years (annual) 

 Direct Impacts 23 $2.15 $3.27 

 Plant Workers Only 14 $1.61 

 Indirect Impacts 8 $0.32 $0.89 

 Induced Impacts 13 $0.44 $1.26 

 Total Impacts (Direct, Indirect, Induced) 44 $2.90 $5.42 

Virginia Wind Jobs Earnings Output

 During construction period 

 Direct Impacts 1,057 $38.07 $124.79

 Construction Sector Only 1,016 $35.60 $116.97

 Indirect Impacts 392 $14.70 $36.33 

 Induced Impacts 494 $16.99 $48.71 

 Total Impacts (Direct, Indirect, Induced) 1,943 $69.77 $209.83

 

 During operating years (annual) 

 Direct Impacts 175 $10.20 $16.68 

 Plant Workers Only 101 $7.38 

 Indirect Impacts 41 $1.63 $4.61 

 Induced Impacts 71 $2.43 $6.96 

 Total Impacts (Direct, Indirect, Induced) 286 $14.26 $28.25 

16
Statewide economic impact in Virginia from new coal, gas and 

wind plants (construction + 20 years of operation)

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Coal (276 MW) Gas (270 MW) Wind (780 MW)

Millions of dollars

Equivalent generation

Total operations

Total construction

Figure 7. JEDI II results for Virginia 

It is noteworthy that if both Colorado and Virginia supply 40% of their own coal, 

Virginia sees much greater reward. This is primarily due to the higher price of coal as 

well as the higher heat rate (>12,000 in Virginia vs. <9,000 Btu in Colorado) in the 

Eastern United States. 

Statewide economic impact in Virginia from new coal, gas and

wind plants (construction + 20 years of operation)

Sensitivity analysis: 20% of coal from Virginia

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

Coal (276 MW) Gas (270 MW) Wind (780 MW)

Millions of dollars

Equivalent generation

Total operations

Total construction

Figure 8. Sensitivity analysis results: 20% of the coal from Virginia 

17
In the above sensitivity analysis (Figure 8), we ran the model with all values constant, 

except for the origin of fuel. We assumed, based on an interview with a professor of 

Integrated Science and Technology at Virginia’s James Madison University, that the use 

of in-state coal in utility power plants will decrease in the future. Because it is uncertain 

exactly how much less in-state coal may be used, we assumed that 20% of the coal would 

still come from Virginia. The results indicate that this will be a significant change for 

Virginia. Compared to Figure 6, wind power may bring higher economic benefits to the 

state if only 20% (or less) Virginia coal is used. Again, this emphasizes the importance of 

obtaining and using accurate inputs based on project location. 

Results Interpretation 

Regardless of the amount of project-specific data entered by the user, as long as the 

minimum data are entered, JEDI II will provide sufficient information to help users better 

understand the magnitude of the economic impacts associated with potential projects. The 

model provides basic project information to identify the magnitude of the constructionrelated spending and ongoing O&M expenditures, as well as a portion of local spending. 

As noted above, these outputs should not be interpreted as precise values but should be 

used as an indication of the magnitude of the potential economic development impacts. 

In addition to basic project information, JEDI II provides analysis (divided into the above 

direct, indirect, and induced impacts) of the local jobs, earnings and output (economic 

activity) generated as a result of the project. This includes the one-time impacts from

construction as well as ongoing impacts from annual operations. 

User Add-in Location Feature

The initial design for JEDI provided for state-level impact analysis only. After its 

introduction, it was apparent that many potential users might also wish to perform a 

similar level of analysis for a smaller or more localized region (such as an individual 

county or group of counties) or for a larger region (such as a group of neighboring states) 

to better capture the regional benefits. The high cost of including multiplier and 

expenditure data in the model for every county in the United States and the complexities 

associated with designing the model to analyze the endless number of possibilities for 

combining counties and states made this impractical. 

To accommodate those users who desire to do this level of analysis, a User Add-in

Location feature is provided in the model. This feature allows users with the capability to 

derive or obtain the necessary data inputs to complete analysis for a specific region of

interest other than the state level included with the base model. The necessary inputs 

include direct, indirect, and induced multipliers for employment, earnings, and output 

(per million dollars change in final demand) and personal consumption expenditures (i.e., 

average consumer expenditures on goods and services, calculated as a percentage for 

each industry and totaling 100% combined), for the 14 aggregated industries analyzed in 

the model. More detail on the sectors contained in each industry can be found as an 

appendix to the model, which is made available to all JEDI and JEDI II users. 

18
The aggregated industries include: 

 

1. Agriculture 

2. Construction 

3. Electrical Equipment 

4. Fabricated Metals 

5. Finance, Insurance, and Real Estate 

6. Government

7. Machinery 

8. Mining 

9. Other Manufacturing 

10. Other Services 

11. Professional Services 

12. Retail Trade

13. Transportation, Communication, and Public Utilities 

14. Wholesale Trade. 

After the user’s new location data are entered into the model, the user need only identify 

the location of the power plant (in the project description section of the ProjectData 

worksheet) as “MyCounty” or “MyRegion,” depending on where the data are entered (in 

the User Add-in Location worksheet) and proceed with the analysis. 

We emphasize that the use of the User Add-in Feature (“MyCounty” or “MyRegion” 

options) in any of the JEDI models requires additional economic multiplier data that has 

been customized for the appropriate area. Without this custom data set, the results from

the model will be invalid. 

Important Considerations 

The considerations mentioned in the first version of JEDI (wind only) also hold true for 

this version. This model constructs a reasonable profile of dollar flows and demonstrates 

the economic impacts that are likely to result, assuming the projects have default or userdefined inputs. However, given future price volatility and changes in technology and 

policy, as well as changes in consumption patterns, the analysis does not provide a 

precise forecast. 

This analysis does not account for any potential rate changes for electricity consumers 

associated with the new generation facilities. Although natural gas plants currently have 

the lowest construction costs of the resources analyzed, rising fuel costs make them very 

expensive to operate, and few new plants are being proposed based on increases in 

ratepayer prices. 

Additionally, the analysis assumes the output from power plants and specific terms of the 

power purchase agreements generate sufficient revenues to accommodate the equity and 

debt repayment and annual operating expenditures. To the extent additional revenues 

(e.g., profits or tax advantages) accrue to the project owners, there will be additional 

benefits. If the project owner is local, these additional benefits may contribute to the local 

19
economy. Although these benefits are not included in our analysis because it is unlikely 

in these scenarios, JEDI II is capable of evaluating these contributions to the local 

economic impacts. 

Conclusion 

Based on our experience, the economic benefits of alternative power generation 

technologies can be calculated on a statewide or more local basis with appropriate 

adjustments to the model. The JEDI II economic development models have been 

developed to provide a tool for policy makers and other interested parties so that the 

economic benefits can be analyzed and compared. Users can also evaluate alternative 

assumptions regarding the potential projects. It is clear from our results that localized 

inputs make a significant difference in the overall economic impacts from new power 

plants (e.g., 40% local coal in Colorado vs. 40% local coal in Virginia). The JEDI II 

models are not general equilibrium models and therefore are limited in scope. They do 

not capture the impact of project cost on electricity rates, nor do they estimate power 

production costs or actual generation for the projects. 

We found a range of outcomes in the few states that we analyzed and strongly suspect 

that nearly all states have characteristics that are unique enough that there is no one-sizefits-all economic outcome. Some of the key drivers are: 

• Percent of fuel that is obtained locally/within the state 

• Makeup of the local/state labor force and relationship to the needs of the power 

technology that is under analysis 

• Availability of local (within the state or region being analyzed) equipment 

(components of the power plant) and services 

• State and local tax characteristics, and whether there are payments in lieu of taxes 

• Fuel prices 

• Localization of the model (providing specific data that override model default 

values 

• Share of the power plant that is owned locally. 

Based on our analysis, the biggest economic impacts to a state’s economy from new 

electricity generation are directly related to fuel purchases (in the case of natural gas and 

coal), property taxes, and the cost of O&M. 

Decision-makers may choose to use a combination of coal, gas, or wind to fit their 

electricity needs. 

Data Sources 

Analyzing the economic impacts of constructing and operating power plants requires a 

large amount of project-specific data, state-specific input-output multipliers and personal 

expenditure patterns, and price deflators. The project-specific data include a bill of goods 

(costs associated with actual construction of the facility, roads, etc., as well as costs for 

equipment, fuel, and other services and fees required), annual operating and maintenance 

costs and data on the portion of expenditures spent locally, financing terms, and tax rates. 

More specifically, the model utilizes the following project inputs: 

20
 Construction Costs (materials and labor) 

 Equipment Costs (turbines, rotors, towers, etc.) 

 Other Costs (utility interconnection, engineering, land easements, permitting, 

etc.) 

 Fuel Costs 

 Annual Operating and Maintenance Costs (personnel, materials, and services) 

 Other Parameters (financial: debt and equity, taxes, and land lease). 

Unfortunately, many developers consider this type of information proprietary due to 

competitive forces in the marketplace. Similarly, project-specific differences can and do 

significantly impact costs. As a result, it is near impossible to identify one-price-fits-all 

situations. Nevertheless, the model provides reasonable default values for each of the 

inputs noted above and all those necessary for the analysis. These values represent 

average costs and spending patterns derived from a number of sources (project-specific 

data contained in reports and studies) and research and analysis of renewable resources 

undertaken by the model developer during the past 10 years. Among other sources 

(including personal communications and anecdotal evidence gathered to complete 

previous renewable studies), the model incorporates specific project-related data from the 

following sources: 

BBC Research and Consulting. Potential Economic Benefits from Commercial Wind 

Power Facilities in Quay County. New Mexico Energy, Minerals and Natural Resources 

Department, Santa Fe, New Mexico. July 15, 2000. 

DanMar and Associates. Economic Impact Analysis of WINDPOWER DEVELOPMENT 

in Southwest Minnesota. Southwest Regional Development Commission, Slayton, 

Minnesota. September 1996. 

Energy Information Administration Web site 

http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp

Goldberg, M.; Sinclair, K; Milligan, M. “Job and Economic Development Impact (JEDI) 

Model: A User-friendly tool to Calculate Economic Impacts from Wind Projects.” 

Presented at Global WINDPOWER 2004, March 28-31, 2004, Chicago, Illinois. 

Office of Utility Technologies, Energy Efficiency and Renewable Energy. Renewable 

Energy Technology Characterizations. Electric Power Research Institute and U.S. 

Department of Energy. December 1997. TR-109496. 

Tegen, Suzanne. A comparison of statewide economic impacts of new generation from 

wind, coal and natural gas in Colorado. Presented at the American Wind Energy 

Association’s WINDPOWER 2004. Chicago, Illinois. May 2004. 

21
Wind, Thomas A. Wind Farm Feasibility Study. Iowa Association of Municipal Utilities, 

Ankeny, Iowa. April 1996. 

Personal communications with Lee House, State Corporation Commission of Virginia. 

Colorado, 2006. 

Personal communications with Rich VanderVeen, developer in Michigan, 2005. 

Personal communications with Andy Wyatt, Prowers County Assessor. Prowers County, 

Colorado, 2005. 

Personal communications with Dan Juhl, a wind project developer in Minnesota, 2003. 

Personal communications with Steve Clemmer, senior energy analyst, Union of 

Concerned Scientists, Cambridge, Massachusetts, 2003. 

The state-by-state input-output multipliers and household commodity demand/personal 

consumption expenditure patterns were derived from IMPLAN ProfessionalTM Version 

2.0, using 2001 state data files for the respective states. Minnesota IMPLAN Group, Inc., 

Stillwater, Minnesota. 

The U.S. price deflators were derived from Current Dollar and “Real” Gross Domestic 

Product data downloaded from the Bureau of Economic Analysis Web site, 

http://www.bea.doc.gov. 

22
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5a. CONTRACT NUMBER

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4. TITLE AND SUBTITLE

User-Friendly Tool to Calculate Economic Impacts from Coal, 

Natural Gas, and Wind: The Expanded Jobs and Economic 

Development Impact Model (JEDI II) 

5c. PROGRAM ELEMENT NUMBER

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NREL/CP-500-40085 

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WER5 6103 

6. AUTHOR(S)

S. Tegen, M. Goldberg, and M. Milligan 

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National Renewable Energy Laboratory 

1617 Cole Blvd. 

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14. ABSTRACT (Maximum 200 Words)

Policymakers today are faced with decisions about how utilities in their region should provide electricity to their service 

territories. There are geographic, technological, economic, and political advantages and limitations to each type of 

generating technology. To help address the need for quantitative tools that can help evaluate the economic benefit of 

alternative fuel choices, the original Jobs and Economic Development Impacts (JEDI) model has been expanded so it 

can be used to assess impacts of coal and gas plants in addition to wind plants. 

In this paper we examine the impacts of building new coal, gas, or wind plants in three states: Colorado, Michigan, and 

Virginia. Our findings indicate that local/state economic impacts are directly related to the availability and utilization of 

local industries and services to build and operate the power plant. For gas and coal plants, the economic benefit 

depends significantly on whether the fuel is obtained from within the state, out of state, or some combination. We also 

find that the taxes generated by power plants can have a significant impact on local economies via increased 

expenditures on public goods. 

15. SUBJECT TERMS

wind energy; model; economic development; JEDI; JEDI II; Job and Economic Development Impacts; Colorado; 

Michigan; Virginia 

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