ML050660006
| ML050660006 | |
| Person / Time | |
|---|---|
| Site: | Brunswick  (DPR-062, DPR-071, NPF-037, NPF-066) |
| Issue date: | 10/15/2004 |
| From: | Farrell C, Hall W Univ of North Carolina - Wilmington |
| To: | Office of Nuclear Reactor Regulation |
| Hernandez S, NRR/DRIP/RLEP, 415-4049 | |
| References | |
| Download: ML050660006 (13) | |
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J Economic Impact Study of the Progress Energy, Inc.
Brunswick Nuclear Power Facility on North Carolina State Planning Region 0 by Claude Farrell Professor of Economics The University of North Carolina at Wilmington and William W. Hall, Jr.
Professor of Economics and Director of the Center for Business and Economics Services Center for Business and Economics Services Cameron School of Business The University of North Carolina at Wilmington October 2004 Research Project for Progress Energy, Inc.
Administered by the UNCW Office of Sponsored Programs
Economic Impact Study of the Progress Energy, Inc. Brunswick Nuclear Facility on North Carolina State Planning Region 0 Executive Summary The Progress Energy, Inc. nuclear facility located in Brunswick County near Southport, North Carolina has significant positive economic impacts on the four counties of Brunswick, Columbus, New Hanover, and Pender that comprise State Planning Region 0 in Southeastern North Carolina. The facility has impacts on gross output, employment, payrolls, self-employment income, property income, indirect business taxes, and local property taxes.
The facility's impact on gross output in the four counties of Region 0 was
$901 million in 2003, 14 percent of the value of total regional output in the four-county area. The facility supported 2,030 jobs (1.3 percent of total employment) and $88.4 million in payrolls in the region in 2003, with an annual average salary per job of $43,500. These jobs include jobs at the Brunswick facility and jobs supported by companies that supply and/or are supported by the facility's operations. The impact on self-employment income was $12.4 million. The impact on property income, viz., rents, dividends and interest, was $184.7 million. Indirect business tax collections, e.g., sales and excise taxes, attributed to the operation of the facility totaled $48.4 million. County property tax revenues attributable to the facility were $8.1 million (3.7 percent of total collections on real property) with an implied real property tax base of $1,274.3 million (3.7 percent of the total tax base).
Not surprisingly, the bulk of the facility's impact on output is in its host county of Brunswick. In 2003 the facility supported $490.2 million in output in the county, almost 40 cents out of every dollar of output produced in the county in 2003.
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The impact on output in New Hanover County was almost $352 million, 8 percent of the county's total output in 2003 and slightly more than 70 percent of the output effects in Brunswick County. The facility supported 6 percent of total output in both Columbus and Pender Counties in 2003.
The nuclear facility is one of the regional economy's major contributors.
Prior to this study, little, if any was known about the facility's economic impact inside or outside of Brunswick County. It has been an unknown and, perhaps, at times, misunderstood and unappreciated, major asset to the four-county regional economy and will continue to be an important part of the area economy in the future. Also, not to be overlooked are Progress Energy's significant public service contributions associated with the nuclear facility.
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Economic Impact Study of the Progress Energy, Inc. Brunswick Nuclear Facility on North Carolina State Planning Region 0 Introduction In July 2004, Progress Energy, Inc. (PGiN) contracted with the UNC Wilmington (UNCW) Office of Sponsored Programs for a faculty research team to conduct a study of the impact that its Brunswick nuclear facility had on the economy of the four counties of Brunswick, Columbus, New Hanover, and Pender in 2003. These four counties comprise State Planning Region 0 in Southeastern North Carolina. The UNCW faculty research team worked under the auspices of the Center for Business and Economics Services in the Cameron School of Business at UNCW.
II. The Nature of an Economic Impact Study As the name implies, an economic impact study is conducted to estimate the impact that firms in a specific business sector have on the economy of the surrounding area. The impacts take several forms. The most obvious is the direct impact that measures payments made by the firms in that sector that flow directly into the local economy. These direct impacts include, but are not limited to, employee salaries and payments for raw materials and supplies. Beyond the direct impact, there are the indirect and induced impacts that reflect the "ripple effect" associated with the direct impact. These impacts are based on the "multiplier effect," an economics principle that provides an estimate of the total amount of spending that takes place, including the "ripple effect." Some proportion of every dollar received by employees and suppliers is re-spent in the local economy, i.e.,
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initial sales are multiplied by some factor, and this recirculation generates additional income and revenue.
The model used to estimate various measures of the economic impact on the four-county economy was developed using the IMPLAN ProfessionalT"' for Windows (Version 2.2) software.1 This software is commonly used by business, government, and academic institutions to help develop economic impact analyses.
III. The Study This study estimates the total economic impact - the sum of the direct, indirect, and induced impacts - of the PGN Brunswick nuclear facility. All data are for 2003. The impacts that are calculated include those on output, employment, payrolls, gross or before-tax personal income, self-employment income, property income, indirect business taxes, and local property taxes. Output is the total value of all output produced in the four-county area. Personal income is the income earned by residents of the area. Self-employment income is the income earned by those self-employed in the area. Property income is the income from such sources as rents, royalties, and dividends. Indirect business taxes include excise and sales taxes paid by individuals to businesses. The impact on county tax collections on real property, excluding any property taxes collected by the municipalities in the counties, is also calculated.
IV Tire Brunswvick Nitclear Facility The Brunswick nuclear plant is located on a 1,200 acre site near Southport, North Carolina, at the mouth of the Cape Fear River and is owned jointly by PGN (81.67%) and the N. C. Eastern Municipal Power Agency (18.33%). The plant is a 5
dual-unit power plant that has a combined capacity of approximately 1,770 megawatts, generating enough electricity for approximately 1 million homes. The first nuclear plant built in North Carolina, the Brunswick plant generates between 20 and 25 percent of PGN's electricity produced for its customers in North and South Carolina.
The Brunswick units began commercial operation in November 1975 (Unit 2) and March 1977 (Unit 1). The Brunswick units are utilized as "base load" plants, operating at full power continuously except when maintenance or refueling activities are needed.
V.
The 2003 Inepacts V.A.
The RegionalImpacts Table 1 shows the 2003 impacts that were estimated for the Brunswick nuclear plant. As certain data are proprietary, only the total impacts, i.e., the sum of the direct, indirect, and induced impacts, are shown. All dollar figures are in 2003 dollars.
Based on the data in Table 1, in 2003 the PGN Brunswick nuclear facility supported almost $901 million in output, 2,030 jobs, $100.8 million in personal income, $88.4 million in payrolls, $12.4 million in self-employment income, $184.7 million in property income, $48.4 million in indirect business taxes, and $8.1 million in county tax collections on real property."i The property tax collections exclude any municipal collections. The implied real property tax necessary to generate these property tax collections was almost $1.3 billion.
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Table 1 2003 Economic Impact of PGN Brunswick Nuclear Facility Operations on North Carolina State Pl nning Region 0' Impact Measure Impact Output
$900.7 million Employment 2 2,030 Personal Income
$100.8 million Payrolls
$88.4 million Self-Employment Income
$12.4 million Property Income
$184.7 million Indirect Business Tax Collections
$48.4 million County Tax Collections on Real Property3
$8.1 million Implied Real Property Tax Base4 1,274.3 million Region 0 includes Brunswick, Columbus, New Hanover, and Pender Counties.
2 Employment includes employment at the PGN Brunswick nuclear facility and employment due to the "ripple effect."
4 This is a four-county total, excluding municipal collections.
The implied real property tax base is the value of the tax base necessary to generate the associated property tax collections.
Source:
IMPLAN Model and Authors' Calculations.
To place the above numbers in some perspective, total regional output, i.e.,
total output produced in Region 0, in 2003 is estimated at $6.4 billion. Thus, the PGN Brunswick nuclear facility supported 14 percent of the value of total regional output in 2003. Data from the North Carolina Employment Security Commission (ESC) indicate that average monthly employment in the four-county region over 2003 was 156,000. Thus, the nuclear facility supported 1.3 percent of total regional employment in 2003. ESC data also indicate an average annual salary across all sectors in the four-county region of $28,300 in 2003. Thus, the average annual salary supported by the nuclear facility of $43,500, calculated by dividing payrolls by employment, was 53.5 percent above the all-sector average. Total property taxes on real property collected by the four counties, exclusive of municipal collections, 7
was $215.8 million in FY 2003-2004. Thus, the nuclear facility supported 3.7 percent of these collections. The implied real property tax base supported by the nuclear facility was also 3.7 percent of the value of all real property in the region.
Table 2 shows the distribution of the output impact across selected sectors of the regional economy. Not surprisingly, the bulk of the impact (91 percent) is in the nuclear power facilities sector itself. Maintenance and repair services receive 1.7 percent of the impact. Real estate, home owners, and banking receive 0.5 percent of the impact each.
Table 2 Distribution of the PGN Brunswick Nuclear Facility Output Impact in 2003 Sector Impact Nuclear Power Facilities
$819.3 million Maintenance and Repair Services
$15.4 million Real Estate
$5.1 million Home Owners
$4.9 million Banking
$4.5 million All Other Sectors
$51.4 million Source:
IMPLAN Model and Authors' Calculations.
Table 3 shows the distribution of the employment impact across selected sectors of the regional economy. Not surprisingly, most of the employment impact (40 percent) is in the nuclear power facilities sector itself. Maintenance and repair services receive 13 percent of the impact. Eating and drinking places receive 5 percent of the impact, followed by miscellaneous retail outlets and food stores with 3 percent of the impact each.
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Table 3 Distribution of the PGN Nuclear Facility Employment Impact in 2003 Sector Impact Nuclear Power Facilities 810 Maintenance and Repair Services 260 Eating and Drinking Places 100 Miscellaneous Retail Outlets 70 Food Stores 50 All Other Sectors 740 Source:
IMPLAN Model and Authors' Calculations.
V.B. The County Impnacts This section estimates the impacts in each of the four counties comprising State Planning Region O.iv Table 4 provides the information on the 2003 impact.
Table 4 Distribution of the PGN Brunswick Nuclear Facility Imp act in 2003 by County Brunswick Columbus New Hanover Pender Impact Measure County County County County Output
_$490.2 m
$36.8 m
$351.7 m S22.1 m Employment 1,100 80 800 50 Personal Income
$54.9 m
$4.1 m
$39.4 m
$2.5 m Pavrolls_$48.1 m
$3.6 m
$34.5 m S2.2 m Self-Employment Income S6.7 m
$0.5 m S4.8 m
$0.3 m' Property Income S100.5 m
$7.5 m S72.1 m S4.5 m Indirect Business Tax Collections
$26.3 m
$2.0 m S18.9 m S1.2 m County Property Tax Collections S3.3 m
$0.4 m
$3.2 m S1.2 In Implied Real Property Tax Base
$549.1 m
$52.6 n
$469.8 m
$202.8 m Source:
IMPLAN Model and Authors' Calculations.
To place the numbers in Table 4 in some perspective, total output in Brunswick County in 2003 is estimated at $1.26 billion. Thus, the PGN Brunswick nuclear facility supported almost 40 percent of the value of total county output in 2003. ESC data indicate an average monthly employment during 2003 in Brunswick County of 34,700. Thus, the facility supported 3.2 percent of total county employment in 2003. Real property tax collections in the county totaled $64 9
million in 2003 with an implied real property tax base of $10.8 billion. Thus, the facility supported 5.1 percent of property tax collections in the county. The implied property tax base was also 5.1 percent of the total real property tax base in the county.
Total output in Columbus County in 2003 is estimated at $611.1 million.
Thus, the PGN Brunswick nuclear facility supported 6 percent of the value of total county output in 2003. ESC data indicate an average monthly employment in the county of 20,100 over 2003. Thus, the facility supported 0.4 percent of total county employment in 2003. Real property tax collections in the county totaled $15.8 million in 2003 with an implied real property tax base of $2 billion. Thus, the facility supported 2.6 percent of county property tax collections in 2003. The implied property tax base was also 2.6 percent of the total real property tax base in the county.
Total output in New Hanover County in 2003 is estimated at almost $4.2 billion. Thus, the PGN Brunswick nuclear facility supported 8 percent of the value of total county output in 2003. ESC data indicate an average monthly employment in the county of 84,100 over 2003. Thus, the facility supported 1 percent of total county employment in 2003. Real property tax collections in the county totaled
$115.4 million in 2003 with an implied real property tax base of almost $17 billion.
Thus, the facility supported 2.8 percent of county property tax collections in 2003.
The implied property tax base was also 2.8 percent of the total real property tax base in the county.
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Total output in Pender County in 2003 is estimated at $352.2 million. Thus, the PGN Brunswick nuclear facility supported 6 percent of the value of total county output in 2003. ESC data indicate an average monthly employment in the county of 17,560 over 2003. Thus, the facility supported 0.3 percent of total county employment in 2003. Real property tax collections in the county totaled $20.5 million in 2003 with an implied real property tax base of $202.8 million. Thus, the facility supported 5.8 percent of county property tax collections in 2003. The implied property tax base was also 5.8 percent of the total real property tax base in the county.
VI.
Additional Impacts of the Brunswick Nuclear Facility, PGN's Brunswick nuclear facility also makes substantial contributions to the social, aesthetic, and cultural environment of the region. For example, through the first seven months of 2004, facility employees had provided nearly 1,500 volunteer hours to numerous local organizations. These employees had also pledged more than $17,000 to Habitat of Brunswick County. Since 2000, PGN has made more than $1.9 million in grants to nonprofit organizations in the region.
VI. Summary and Conclusions As expected by the authors the impact of PGN's Brunswick nuclear facility is quite significant. As a stand-alone enterprise, the authors believe that it is the largest single contributor to the Brunswick County economy with respect to income, employment, and taxes. Obviously, without knowledge of other stand-alone enterprises in the county this statement cannot be made with absolute certainty.
However, the evidence presented in this study and other anecdotal evidence 11
indicates that the nuclear facility is the largest single enterprise contributor to Brunswick County's economy.
In New Hanover County, the impact on output of $351.7 million, about 70 percent of the output impact in Brunswick County, was unanticipated. Not only was the magnitude of this contribution by the nuclear facility unexpected, but also the contribution to New Hanover County's tax base of approximately $470 million.
In even the more distant counties of Columbus and Pender, the Brunswick nuclear facility had significant impacts. The facility supported 6 percent of the value of total output in each of these two counties. These relatively large impacts can possibly be attributed to the fact that these counties are not economically some of the more prosperous counties in the state and that persons living in these counties, who work at the nuclear facility or in supporting enterprises, are primarily responsible for supporting this output. Also, worthy of note is the contribution of the nuclear facilities to Columbus County's and Pender County's tax collections on real property, representing 2.6 and 5.8 percent of total collections and the associated tax base, respectively. This most likely is a reflection of home and property ownership by persons living in these counties and working at the nuclear facility and in enterprises supporting the operation of the facility.
The Brunswick County nuclear facility has a huge economic impact not only in Brunswick County but also in Columbus, New Hanover, and Pender Counties as well. Prior to this study, the facility's importance as a major economic contributor to the four-county economy of State Planning Region 0 was largely unknown and unappreciated.
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Endnotes The IMPLAN Professionalfrr software for Windows (Version 2.0) is available from MIG, Inc., Stillwater Minnesota.
ii The impact on real property tax collections was calculated by calculating real property tax collections per dollar of output produced and then multiplying this ratio by induced output.
Ri The size of the implied real property tax base was calculated by dividing tax collections by the tax rate. The relevant FY 2003-2004 tax rates per $100 property valuation were $0.59 in Brunswick County, $0.78 in Columbus County, $0.68 in New Hanover County, and $0.59 in Pender County.
Iv These calculations were estimated using information supplied by PGN on resident counties of employees. Specifically, 54 percent of the employees designated their county of residence as Brunswick County, 4 percent as Columbus County, 39 percent as New Hanover County, and 2 percent as Pender County. These percentages were used to allocate the impact across the separate counties.
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