TWE Project: benefits for the country and local communities

The TransWest Express Transmission Project will deliver significant national and local benefits, including creating and sustaining jobs and helping utilities minimize consumers’ electricity costs.

Economic benefits

TransWest will pay property taxes in every state and county that the transmission line traverses, augmenting state and local government budgets. If Western Area Power Administration, part of the U.S. Department of Energy, decides to jointly own the TWE Project, Western will be exempt from paying property tax on its portion because it is part of the federal government. There is no such exemption for TransWest, which will pay property taxes based upon the assessed value of the fair market value of the TWE Project. Based on TransWest’s proposed route and assuming the counties’ average tax rates and mill levies, TransWest estimates $11.4 million - $15.3 million will be paid in total property taxes in year 1, as outlined below. TransWest will continue to pay property taxes over economic life of the project. Property tax payments are estimated to slightly decrease annually based on how states depreciate the project.

  Estimated fair market value Estimated property taxes paid, Year 1
Wyoming $912 million - $1,261 million $3.5 million - $4.8 million
Colorado $113 million - $163 million $636,000 - $915,000
Utah $542 million - $780 million $3.2 million - $4.6 million
Nevada $758 million - $924 million $4.1 million - $5.0 million
Total $2.3 billion - $3.1 billion $11.4 million - $15.3 million

In addition, TransWest anticipates the purchase and delivery of construction materials, substation equipment and transmission towers will generate $50 million - $99 million in total sales and use tax revenue, depending on the final project ownership structure and how state tax laws are applied. TransWest estimates that a taxable material cost of approximately $1.5 billion will result in the following estimated sales/use tax payments within each state.

  Estimated material cost Estimated sales/use taxes
Wyoming $644 million $19.3 million - $38.5 million
Colorado $43 million $1.0 million - $2.1 million
Utah $205 million $6.1 million - $12.2 million
Nevada $574 million $23.3 million - $46.5 million
Total $1.5 billion $49.7 million - $99.3 million

These millions of dollars in tax revenues do not include the millions in sales/use tax payments that may be spurred by other existing or new businesses investing in new equipment or services to support the construction of this transmission line, or the additional sales/use/lodging tax revenues spurred by workers staying in local hotels, campgrounds and RV parks.

Finally, the TWE Project will provide important new connectivity between the utilities in California, Nevada and Arizona that have mandates to provide their customers with more renewable energy and the state of Wyoming’s high-capacity wind farms that generate very cost-effective renewable energy supplies. This will help utilities minimize their customers’ electricity bills and better manage their operational costs.

Multiple strong economic cases have been made for remote renewable resources delivered by new transmission lines to densely-populated markets, as recognized by the Department of the Interior, Department of Energy and others. The higher quality and higher volumes of renewable energy available in some remote areas greatly offsets the capital required to build the transmission capacity.

For example, the DOE-sponsored 10-Year Regional Transmission Plan, produced by the Western Electricity Coordinating Council in 2011, found that cost-effective remote resources could provide hundreds of millions of dollars of savings for ratepayers per year, as compared to local renewable resources. Specifically, the economic analysis noted that the TWE Project could help California ratepayers save on the order of $600 million every year, which translates to billions of dollars in savings for customers over time.

The 2009 “Green Power Superhighways” report, jointly prepared by the American Wind Energy Association and Solar Energy Industries Association, also recognized the consumer cost benefits of improved transmission. The paper notes:

"A robust transmission grid provides consumers with access to lower-cost electricity. On a severely constrained transmission grid, as now exists in many parts of the United States, consumers are forced to rely on local power plants even though plants in other regions can produce power more efficiently and at lower cost.

"The effect of higher electricity prices goes beyond financial hardship for residential consumers. Businesses pass higher electricity costs on to their customers, and electricity-intensive industries have a strong incentive to relocate to regions with lower electricity costs, taking jobs with them.

"New transmission infrastructure would increase competition in wholesale power markets... a weak grid makes it possible for power generation owners in constrained sections of the grid to raise prices beyond what they would be in a competitive market.”

Environmental benefits

The TWE Project will deliver enough clean, sustainable energy to power more than 1.8 million homes in densely populated areas of the country, thereby reducing the need for these regions to depend on fossil-fuel electric generating sources. Among the environmental benefits of the TWE Project and the wind electricity it will carry:

  • Reduce greenhouse-gas emissions equivalent to taking 1.5 million cars from the road.
  • Reduce greenhouse-gas emissions equivalent to shutting down 1,062 MW of coal generation.

Employment opportunities

The owner’s engineer estimates that up to 1,000 construction jobs will be created for the duration of the three-year construction phase of the TWE Project, jobs that will follow the transmission line as it is built.

Estimated jobs over the three-year construction period:

Type Number
Direct construction jobs per year at peak 675-1,050
Direct construction jobs per year average 300-450
Indirect jobs in the project area 1,000
Indirect jobs nationally 3,000-5,000
Line maintenance jobs after project completion 10-20

Additional jobs will be created to build the terminals/substations in Carbon County, Wyo., and Clark County, Nev.

Estimated jobs over the two-year construction period:

Type Number
Direct construction jobs per year at peak 360-500
Direct construction jobs per year average 160-300
Indirect jobs in the project area 600
Indirect jobs nationally 2,000-4,000 over a
3-year period
Operations/maintenance jobs after project completion 25-50

Project benefits

Highlights

  • Creates construction jobs
  • Boosts demand for local products and services during construction
  • Provides additional local tax revenues
  • Increases stability, capacity, reliability of entire western power grid
  • Gets more energy to the highest demand centers, freeing up more energy elsewhere
  • Facilitates delivery of more renewable energy, contributing to national emissions reduction goals
  • Provides California, Nevada and Arizona utilities with access to the west's most cost-effective renewable energy supplies
  • Offers opportunity for potential future interconnection with the IPP transmission system near Delta, Utah.

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"We have to connect... the wind of the plains with the places where people live."

- Secretary of the U.S. Department of the Interior, 2009