The Cost of Not Building Transmission: Economic Impact of Proposed Transmission Line Projects for the Pacific NorthWest Economic Region

EXECUTIVE SUMMARY

The Pacific Northwest Economic Region (PNWER), a regional planning and facilitation organization
established in 1991, promotes transboundary policy and planning in the Pacific Northwest. As one of the
fastest growing regions in North America, the eight member political jurisdictions (i.e., the states of
Washington, Oregon, Idaho, Montana, and Alaska; the provinces of Alberta and British Columbia; and
the Yukon Territory) are dedicated to maintaining the $700B (US) regional economy and promoting
additional economic growth through regional and bi-national cooperation. Within PNWER, 14 working
groups are tasked to promote specific economic interests. The Energy I Working Group is tasked to
identify supply and demand issues concerning the availability and cost of energy within the region, which
requires the development of adequate and reliable power infrastructure (i.e., energy transmission lines and
generation).

To attract new industries and keep pace with rapid growth, world-class communities require a reliable
infrastructure of water, energy, transportation, law enforcement, and health-care services. Furthermore,
communities must have access to these resources and services at an affordable cost. PNWER currently
has adequate infrastructure and power, but capacity reserves are slim. Operating on this edge of reserves,
a few PNWER communities and businesses have not been able to capitalize on opportunities for
economic growth and higher paying, value-added jobs simply due to the lack of electrical power capacity.
A recent example of a PNWER community losing such an opportunity was Boise, ID, in 2007. Due
to the lack of electric power capacity, Boise was not able to capitalize in the expansion of two large
technology-based businesses that would have resulted in thousands of high-paying; technology-based
jobs. As a result, both firms dropped Boise off their short list of potential build locations. Other
examples show similar economic impacts as a result of limited power availability. These include: (1) the
1979 curtailment of electric power to Portland General Electric commercial and industrial customers due
to the continued shutdown of the Trojan Nuclear Plant; (2) cuts in aluminum production in December
2000 by several companies in The Dalles, OR, and Goldendale, WA, area so that the Bonneville Power
Association could sell the electricity to California and the Pacific Northwest; and (3) FMC closure of the
Pocatello, ID, phosphorus plant due to rising electricity costs and other economic factors.
In response, PNWER and the Idaho National Laboratory (INL) conducted a simple impact study to
evaluate the cost of not building transmission lines. In this study, probable economic impacts were
forecast from a list of proposed electricity generation and transmission projects within and around the
PNWER region. This report highlights the scenarios where economic opportunities are lost if key
transmission projects identified within PNWER’s integrated resource plans (IRPs) are not carried out.

While this report ranks evaluated projects according to the INL’s assessment of their overall economic
impact to PNWER, it should be noted that all of the projects are considered valuable and necessary to
adequately address growing electric power needs.
The INL’s scoping study included the development of an economic model to evaluate the potential
loss of economic activities, as well as the development of a web-based Geographic Information System
(GIS) that integrates the proposed project’s information and the results of the economic study. These
efforts will enable policy makers, utility planners, and the media to track the status of these critical
transmission line projects.

Model results are not simply related just to the quantities of power delivered; but rather, they are
functionally related to the many economic factors of any community, including average local power use,
the economic productivity of a community, and other economic variables that are necessary to promote
and maintain business enterprise. These relationships always suggest that the transmission of efficiently
produced and available energy is crucial to maintaining an economic base as well as promoting economic
growth.

Full Report: http://www.pnwersenergyhorizon.com/files/PNWERReport_Rev2c_Final_16Jul08_ntwtm3.pdf