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Introduction & Overview

Project Overview
Applied Analysis was retained by the Clean Energy Project to review and analyze the economic impacts of various changes to Nevadas Renewable Portfolio Standard (RPS). This presentation provides a summary of our general approach the salient findings of our review and analysis; a more detailed analysis and economic impact assessment model have been prepared and submitted separately. Finding are as of the last date of our fieldwork: March 22, 2013.

General Approach
Four (4) alternative scenarios were provided by the Clean Energy Project, ranging from a continuation of the status quo (Base Case) to those that significantly increase the RPS and the way it is calculated. Aspen Environmental Group provided development and operating costs estimates under each alternative scenario; Applied Analysis utilized the Michigan IMPLAN Groups economic input-output model to estimate the economic impact under each provided scenario. Reported impacts are incremental, reflecting additional capital and labor requirements as in comparison to the Base Case; positive and negative impacts were identified, measured and analyzed.

General Approach
Alternative Cases Analyzed
Status Quo (Base Case)
An electricity provider must generate, acquire or save electricity from renewable energy or energy efficiency measures in the following percentages: 9% in 2007-08; 12% in 2009-10; 15% in 2011-12; 18% in 2013-14; 20% in 2015-19 22% in 2020-24; and 25% in for 2025 and each calendar year thereafter. Solar of at least 5% for each calendar year up to and including 2015; and 6% for 2016 and each calendar year thereafter.

Alternative #1 (Clean RPS)


Base case scenario, plus the following: 1. Starting in 2014, energy efficiency (demand-side management or DSM) is assumed to be excluded in the RPS; 2. Station usage for new renewable resources is not assumed to contribute toward RPS; and 3. Photovoltaic multiplier eliminated for new photovoltaic facilities.

Alternative #2 (Expand RPS)


Starting in 2014, Nevadas RPS is increased by 2%per year until it reaches 35% total; it is assumed to continue at that rate into perpetuity

Alternative #3 (Clean & Expand RPS)


Starting in 2014, Nevadas RPS is increased by 2%per year until it reaches 35% total; it is assumed to continue at that rate into perpetuity In addition: 1. Starting in 2014, energy efficiency (demand-side management or DSM) is assumed to be excluded in the RPS; 2. Station usage for new renewable resources is not assumed to contribute toward RPS; and 3. Photovoltaic multiplier eliminated for new photovoltaic facilities.

Note: Scenarios provided by Clean Energy Project; cost data provided Aspen Environmental Group.

General Approach
Economic Impacts Considered
Economic Factors Measured
Jobs (Employment) Labor Income (Wages and Salaries) Output (General Business Activity)

Study Period: 2014 2040 (inclusive) Elements Considered in Impact Assessment


One-time Construction Impacts Recurring Operating Impacts Consumer Rate Impacts Fuel Purchase Impacts

Types of Economic Impacts Modeled


Direct impacts measure the effects of the specific force being considered (direct spending from the power plants); compensation for jobs within the new plants and construction projects are also considered direct impacts. Indirect impacts measure how businesses respond to the impacting condition (secondary impacts); an example would be one of the new plants vendors may hire new employees based on incremental business/spending sourced to the plant. Induced impacts reflect the effects of increased consumer expenditure due to the change in wage, salary, and personal income conditions; An employee of one of the new plants going out and spending money in another segment of the economy (e.g., at grocery stores or in movie theaters) is an example of induced impacts. Similarly, when power rates are increased and consumer spending in other segments of the economy drops, that is also an example of induced impacts. Total impacts reflect the sum of direct, indirect and induced impacts.

General Approach
Impact Summary Illustration
Construction Impact O&M Impact Rate Increase Impact Total Impact

Negative Impact

Positive Impact

/ Induced Output Indirect Output Net Direct Construction Output


Source: 2009 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Important Limitations to this Analysis


Economic Uncertainty. This analysis is designed to evaluate the economic impacts of alternative investment and spending patterns within Nevada energy sector. The sector can be impacted by any number of external factors including, without limitation, global economic forces, advancements in technology and regulatory changes. Limitations of Underlying Data. This analysis relies on capital and operating data provided by Aspen Environmental Group and expenditure data reported by NV Energy and other third parties. While we have no reason to doubt the accuracy of these data, we have not undertaken an audit or other assurance procedures relative to the data, and therefore, we cannot attest to its completeness or utility for all purposes. Need for Additional Research. While we believe the conclusions of this analysis are both clear and meaningful, we recognize the need for additional refinement of the underlying assumptions to this analysis and a narrowing of the permutations in terms of possible outcomes. This will lead to more accurate impact estimates.

Findings in Summary

Findings in Summary
Net Positive Economic Impact. Although positive and negative impacts are attributable to a proposed increase to Nevadas RPS, the net overall economic impacts of the cases reviewed herein are positive. Positive impacts are reflected in higher rates of employment, wage and salary payments and economic output. One-Time Construction Impacts Significant. Net new facility construction is estimated to range from $3.0 billion to $6.4 billion depending on the RPS scenario analyzed. Including indirect impacts, the implications of this level of investment translate into between $5.2 billion and $11.0 billion in increased economic activity throughout the state of Nevada. It also translates into between 37,300 and 78,400 person-years of employment (i.e., one person employed for one year). These employees would earn between $2.1 billion and $4.4 billion in wages and salaries throughout the study period. Recurring Operations Impacts Modest. Incremental operations and maintenance of the alternative renewable facilities would generate between 127 and 250 net new jobs annually, increasing labor income by between $10.2 million and $20.2 million and output by between $41.8 million and $82.3 million each year.

Findings in Summary
Impact Summary Matrix
Construction Impacts1
Alternative #1 (Clean RPS)

Operations Impacts2

Rate Impacts2

Avoided Fuel Costs3


Annual Fuel Costs $175.2 million; combined, all years: $3.8 billion

Net Impacts1
Jobs: +20,878 to +37,777; labor income: +$1.5 billion to +$2.2 billion; economic output:+$3.7 billion to +$5.8 billion

Incremental investment: Incremental spending: Rate increase $12.8 million to $3.0 billion. Resulting $33.4 million. Resulting $131.7 million. Resulting impact: impact: +37,262 jobs, impact: +127 jobs, +$10.2 -95 to -980 jobs; -$4.0 million to +$2.1 billion in labor million in labor income; -$41.6 million in labor income; income; and +$5.2 +$786 million in economic -$11.8 million to -$121.5 million billion in economic output in economic output output Incremental investment: Incremental spending: Rate increase $14.1 million to $3.4 billion. Resulting $37.4 million. Resulting $144.9 million. Resulting impact: impact: +41,518 jobs, impact: +144 jobs, +$11.6 -105 to -1,079 jobs; -$4.4 million +$2.3 billion in labor million in labor income; to -$45.8 million in labor income; income; and +$5.8 +$47.5 million in economic $13.0 million to -$133.6 million billion in economic output in economic output output

Alternative #2 (Expand RPS)

Annual Fuel Costs $192.7 million; combined, all years: $4.2 billion

Jobs: +24,212 to +42,151; labor income: +$1.7 billion to +$2.4 billion; economic output:+$4.2 billion to +$6.5 billion

Alternative #3 Incremental investment: Incremental spending: Rate impact $24.1 million to (Clean & Expand RPS) $6.4 billion. Resulting $65.7 million. Resulting $248.3 million. Resulting impact: impact: +78,366 jobs, impact: +250 jobs, +$20.2 -180 to -1,848; -$7.6 million to +$4.4 billion in labor million in labor income; -$78.4 million in labor income; income; and +$11.0 +$82.3mbillion in -$22.2 million to -$229.0 million billion in economic economic output in economic output output
1Values

Annual Fuel Costs $330.2 million; combined, all years: $7.2 billion

Jobs: +45,256 to +79,934; labor income: +$3.2 billion to +$4.6 billion; economic output:+$8.0 billion to +$12.3 billion

expressed as total impact through 2040; employment expressed in person-years. 2Values expressed as annual impacts after all new plants built through 2040. 3A portion of overall Rate Impacts and not included individually in Net Impact calculation; assumes $5 per mmBTU natural gas price.

Findings in Summary
Rate Increase Impact Significant and Uncertain. Nevada consumers will bear higher energy costs under all scenarios analyzed, negatively impacting employment, incomes and economic output. Rate impacts on Nevada consumers are highly influenced by assumption regarding fuel costs, carbon taxes and electricity sales. Under assumptions most favorable to the status quo (e.g., low cost of fossil fuels and no carbon taxes) more jobs are lost due to decreased spending by consumers as they bear higher relative energy costs. Increased electricity cost to consumers are as high as $5.2 billion throughout the study period, resulting in an annual loss of as many as 1,848 jobs and $78.4 million in labor income. Avoided Fossil Fuel Cost Key. An estimated $175,180 in fossil fuels as assumed to be avoided annually for each megawatt of renewable power built in the analyzed scenarios. Fuel required by these plants is acquired from outside Nevada, resulting in minimal in-state impacts in terms of jobs, wages and output. Avoiding these cost allows the Nevada to effectively lower the cost of deploying additional renewable energy alternative. It is this trade off that shifts what would be a negative economic impact to a positive economic impact.

Findings in Summary
Environmental, Health, Economic Development and Other Impacts Not Included. With the exception of those rate impact models that include carbon tax assumptions, the analyses reflected here do not attempt to quantify the environmental, public health and social impacts associated with the alternative RPS strategies. Additionally, this analysis does not attempt to quantify or analyze the economic development and/or economic diversification impacts associated with an increased level of investment in renewable technologies. While beyond the scope of this analysis, these impacts are likely to be material and warrant additional study.

Detailed Scenario Analysis


Alternative #1 | Clean RPS

Alternative Scenario Profile


Alternative #1 | Clean RPS
General Assumptions: Base case scenario, plus the following: 1. Starting in 2014, energy efficiency (demand-side management or DSM) is assumed to be excluded in the RPS; 2. Station usage for new renewable resources is not assumed to contribute toward RPS; and 3. Photovoltaic multiplier eliminated for new photovoltaic facilities. Beginning 2014 Capacity (MW) 200 200 300 300 1,000 Ending 2040 Cost ($ in millions) $326.70 $1,060.50 $1,563.10 $553.50 $246.40 $3,750.20 $175.2 Million Annually

Study Period: Incremental Capacity/Investment: Solar PV1 Solar CSP2 Geothermal Wind Transmission Total Avoided Out-of-State Fuel Purchases3:
Source: Aspen Environmental Group (2013) and calculations. 1PV: Photovoltaic. 2CSV: Concentrated solar power 3Assumes $5 per mmBTU Natural Gas Cost

Scenario Impact Assessment Summary


Alternative #1 | Clean RPS
($ in millions)
Economic Impact
Direct
One-Time Construction Impacts (Cumulative) Person Years of Employment Labor Income Output Recurring Operations Impacts (Cumulative) Person Years of Employment Labor Income Output Rate Impacts1 (Cumulative) Person Years of Employment Labor Income Output Net Economic Impact (Cumulative) Person Years of Employment Labor Income Output Net Economic Impact (Annual) Jobs Labor Income Output
1Rate

Indirect 7,173 $374.1 $904.5 251 $12.9 $34.4 0 $0.0 $0.0 7,425 $387.0 $938.8 275 $14.3 $34.8

Induced 11,129 $443.5 $1,322.0 1,010 $40.3 $120.1 -10,113 -$429.1 -$1,252.7 2,026 $54.8 $189.4 75 $2.0 $7.0

Total 37,262 $2,072.2 $5,248.2 2,334 $188.3 $768.1 -10,113 -$429.1 -$1,252.7 29,483 $1,831.5 $4,763.6 1,092 $67.8 $176.4

18,960 $1,254.6 $3,021.7 1,072 $135.2 $613.6 0 $0.0 $0.0 20,032 $1,389.7 $3,635.4 742 $51.5 $134.6

impacts vary materially depending on assumptions specific to the presence of carbon taxes, fossil fuel costs, and out-of-state sales. For ease of summary, a mid-case scenario is provided. A summary of all rate impact analysis for all scenarios is provided at the end of this section.

Detailed Scenario Analysis


Alternative #2 | Expand RPS

Alternative Scenario Profile


Alternative #2 | Expand RPS
General Assumptions: Starting in 2014, Nevadas RPS is increased by 2% per year until it reaches 35% total; it is assumed to continue at that rate into perpetuity

Study Period: Incremental Capacity/Investment: Solar PV1 Solar CSP2 Geothermal Wind Transmission Total Avoided Out-of-State Fuel Purchases3:
Source: Aspen Environmental Group (2013). 1PV: Photovoltaic. 2CSV: Concentrated solar power 3Assumes $5 per mmBTU Natural Gas Cost

Beginning 2014 Capacity (MW) 200 250 325 325 1,100

Ending 2040 Cost ($ in millions) $ 319.0 $ 1,313.3 $ 1,693.6 $ 586.0 $ 246.4 $ 4,158.3 $192.7 Million Annually

Scenario Impact Assessment Summary


Alternative #2 | Expand RPS
($ in millions)
Economic Impact
Direct
One-Time Construction Impacts (Cumulative) Person Years of Employment Labor Income Output Recurring Operations Impacts (Cumulative) Person Years of Employment Labor Income Output Rate Impacts1 (Cumulative) Person Years of Employment Labor Income Output Net Economic Impact (Cumulative) Person Years of Employment Labor Income Output Net Economic Impact (Annual) Jobs Labor Income Output
1Rate

Indirect 7,993 $416.9 $1,007.8 276 $14.2 $37.7 0 $0.0 $0.0 8,269 $431.1 $1,045.5 306 $16.0 $38.7

Induced 12,400 $494.2 $1,473.1 1,109 $44.2 $131.9 -10,735 -$455.5 -$1,329.8 2,774 $83.0 $275.1 103 $3.1 $10.2

Total 41,518 $2,309.0 $5,847.8 2,563 $206.8 $843.3 -10,735 -$455.5 -$1,329.8 33,346 $2,060.3 $5,361.3 1,235 $76.3 $198.6

21,126 $1,397.9 $3,366.9 1,177 $148.4 $673.8 0 $0.0 $0.0 22,303 $1,546.3 $4,040.7 826 $57.3 $149.7

impacts vary materially depending on assumptions specific to the presence of carbon taxes, fossil fuel costs, and out-of-state sales. For ease of summary, a mid-case scenario is provided. A summary of all rate impact analysis for all scenarios is provided at the end of this section.

Detailed Scenario Analysis


Alternative #3 | Clean & Expand RPS

Alternative Scenario Profile


Alternative #3 | Clean & Expand RPS
General Assumptions: Starting in 2014, Nevadas RPS is increased by 2%per year until it reaches 35% total; it is assumed to continue at that rate into perpetuity. In addition: 1. Starting in 2014, energy efficiency (demand-side management or DSM) is assumed to be excluded in the RPS; 2. Station usage for new renewable resources is not assumed to contribute toward RPS; and 3. Photovoltaic multiplier eliminated for new photovoltaic facilities. Beginning 2014 Capacity (MW) 360 400 600 525 1,885 Ending 2040 Cost ($ in millions) $ 602.1 $ 2,223.0 $ 3,197.3 $ 981.0 $ 724.9 $ 7,728.3 $330.2 Million Annually

Study Period: Incremental Capacity/Investment: Solar PV1 Solar CSP2 Geothermal Wind Transmission Total Avoided Out-of-State Fuel Purchases3:
Source: Aspen Environmental Group (2013). 1PV: Photovoltaic. 2CSV: Concentrated solar power 3Assumes $5 per mmBTU Natural Gas Cost

Scenario Impact Assessment Summary


Alternative #3 | Clean & Expand RPS
($ in millions)
Economic Impact
Direct
One-Time Construction Impacts (Cumulative) Person Years of Employment Labor Income Output Recurring Operations Impacts (Cumulative) Person Years of Employment Labor Income Output Rate Impacts1 (Cumulative) Person Years of Employment Labor Income Output Net Economic Impact (Cumulative) Person Years of Employment Labor Income Output
h

Indirect 15,087 $786.9 $1,902.2 570 $29.3 $78.0 0 $0.0 $0.0 15,657 $816.2 $1,980.3

Induced 23,405 $932.8 $2,780.4 2,294 $91.5 $272.7 -20,752 -$880.5 -$2,570.8 4,947 $143.8 $482.4

Total 78,366 $4,358.2 $11,037.7 5,300 $427.7 $1,744.2 -20,752 -$880.5 -$2,570.8 62,914 $3,905.4 $10,211.2 2,330 $144.6 $378.2

39,875 $2,638.5 $6,355.1 2,435 $306.9 $1,393.5 0 $0.0 $0.0 42,310 $2,945.4 $7,748.6

Net Economic Impact (Annual) 1,567 580 183 Jobs $109.1 $30.2 $5.3 Labor Income $287.0 $73.3 $17.9 Output 1Rate impacts vary materially depending on assumptions specific to the presence of carbon taxes, fossil fuel costs, and out-of-state sales. For ease of summary, a mid-case scenario is provided. A summary of all rate impact analysis for all scenarios is provided at the end of this section.

Rate Impact Assessment


Impact Assessment Matrices

Rate Impact Assessment


The potential impact of rate increases is affected by a number of external factors including, without limitation:
The cost of fossil fuels; Sales to other states; and Carbon taxes.

High fuel costs and/or carbon taxes would lead to increased impact from the alternative renewable scenarios consider in this analysis, as maintaining the status quo (Base Case) would become more expensive relative to the renewable options Allowing renewable sales to other states helps to damper rate increases with a few notable exceptions The challenge from an analytical standpoint is that this makes the impact assessment three dimensional. For each of the three scenarios analyzed, there are 17 rate scenario combinations. They are summarized on the following page.

Summary of Expected Power Rate Increases


($ in millions through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 -$2,514.9 -$2,466.3 -$2,057.0 -$1,528.1 -$1,500.2 -$1,368.2 -$1,358.8 -$1,149.0 -$579.8 -$557.2 -$480.6 -$402.4 -$266.6 -$244.3 Scenario 2 -$2,669.7 -$2,618.0 -$2,183.6 -$1,622.1 -$1,592.5 -$1,452.4 -$1,442.4 -$1,219.7 -$615.4 -$591.5 -$510.2 -$427.2 -$283.0 -$259.4 Scenario 3 -$5,161.0 -$5,061.1 -$4,221.2 -$3,135.7 -$3,078.6 -$2,807.8 -$2,788.4 -$2,357.8 -$1,189.7 -$1,143.4 -$986.3 -$825.9 -$547.0 -$501.4

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Summary of Rate Increase Employment Impact


(in job-years through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 -18,717 -18,355 -15,309 -11,372 -11,372 -11,165 -10,183 -10,113 -8,551 -4,315 -4,147 -3,577 -2,995 -1,984 Scenario 2 -19,869 -19,484 -16,251 -12,072 -12,072 -11,852 -10,810 -10,735 -9,077 -4,580 -4,402 -3,797 -3,179 -2,106 Scenario 3 -38,410 -37,667 -31,416 -23,337 -23,337 -22,912 -20,897 -20,752 -17,548 -8,854 -8,509 -7,341 -6,146 -4,071

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Summary of Rate Increase Labor Income Impact


($ in millions through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 -$794.1 -$778.8 -$649.5 -$482.5 -$482.5 -$473.7 -$432.0 -$429.1 -$362.8 -$183.1 -$175.9 -$151.8 -$127.1 -$84.2 Scenario 2 -$843.0 -$826.7 -$689.5 -$512.2 -$512.2 -$502.9 -$458.6 -$455.5 -$385.1 -$194.3 -$186.8 -$161.1 -$134.9 -$89.4 Scenario 3 -$1,629.7 -$1,598.1 -$1,332.9 -$990.2 -$990.2 -$972.1 -$886.6 -$880.5 -$744.5 -$375.7 -$361.0 -$311.5 -$260.8 -$172.7

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Summary of Rate Increase Output Impact


($ in millions through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 -$2,318.7 -$2,273.8 -$1,896.5 -$1,408.8 -$1,408.8 -$1,383.1 -$1,261.5 -$1,252.7 -$1,059.3 -$534.5 -$513.7 -$443.1 -$371.0 -$245.8 Scenario 2 -$2,461.4 -$2,413.7 -$2,013.2 -$1,495.5 -$1,495.5 -$1,468.3 -$1,339.1 -$1,329.8 -$1,124.5 -$567.4 -$545.3 -$470.4 -$393.9 -$260.9 Scenario 3 -$4,758.2 -$4,666.1 -$3,891.8 -$2,891.0 -$2,891.0 -$2,838.4 -$2,588.7 -$2,570.8 -$2,173.8 -$1,096.9 -$1,054.1 -$909.4 -$761.4 -$504.3

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Combined Impact Assessment


Impact Assessment Inclusive of Rate Impact Assessment Matrix

Summary of Total Output Impacts


($ in millions through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 $3,697.7 $3,742.5 $4,119.9 $4,607.5 $4,633.2 $4,754.9 $4,763.6 $4,957.0 $5,481.8 $5,502.6 $5,573.2 $5,645.3 $5,770.6 $5,791.1 Scenario 2 $4,229.8 $4,277.4 $4,678.0 $5,195.7 $5,222.9 $5,352.1 $5,361.3 $5,566.7 $6,123.7 $6,145.9 $6,220.8 $6,297.3 $6,430.3 $6,452.0 Scenario 3 $8,023.7 $8,115.8 $8,890.2 $9,890.9 $9,943.6 $10,193.3 $10,211.2 $10,608.2 $11,685.1 $11,727.8 $11,872.6 $12,020.5 $12,277.6 $12,319.7

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Summary of Total Labor Income Impacts


($ in millions through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 $1,466.4 $1,481.8 $1,611.1 $1,778.1 $1,786.9 $1,828.5 $1,831.5 $1,897.8 $2,077.5 $2,084.7 $2,108.8 $2,133.5 $2,176.4 $2,183.4 Scenario 2 $1,672.8 $1,689.1 $1,826.3 $2,003.6 $2,012.9 $2,057.1 $2,060.3 $2,130.6 $2,321.4 $2,329.0 $2,354.7 $2,380.9 $2,426.4 $2,433.9 Scenario 3 $3,156.2 $3,187.8 $3,453.0 $3,795.7 $3,813.8 $3,899.3 $3,905.4 $4,041.4 $4,410.2 $4,424.9 $4,474.4 $4,525.1 $4,613.2 $4,627.6

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Summary of Total Employment Impacts


(job-years through 2040)
CASE: Low Fuel-No Sales-No Carbon Tax (Low) Low Fuel-Sales-No Carbon Tax Low Fuel-No Sales-Mid Carbon Tax Base Fuel-No Sales-Mid Carbon Tax Base Fuel-Sales-No Carbon Tax Base Fuel-No Sales-Low Carbon Tax Base Fuel-Sales-Low Carbon Tax (Medium) Base Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-No Carbon Tax High Fuel-Sales-No Carbon Tax Base Fuel-Sales-High Carbon Tax Base Fuel-No Sales-High Carbon Tax High Fuel-Sales-Mid Carbon Tax High Fuel-No Sales-Mid Carbon Tax (High) Scenario 1 20,878 21,241 24,287 28,223 28,430 29,413 29,483 31,045 35,281 35,449 36,019 36,600 37,612 37,777 Scenario 2 24,212 24,597 27,830 32,009 32,229 33,271 33,346 35,004 39,501 39,679 40,284 40,902 41,975 42,151 Scenario 3 45,256 46,000 52,250 60,329 60,754 62,769 62,914 66,118 74,812 75,157 76,326 77,520 79,595 79,934

Source: 2009 & 2012 NV Energy IRP, IMPLAN, Aspen Environmental Group, Calculations

Analysis Assumptions

Analysis Assumptions
Energy Facility Assumptions
Cases are based on Nevada Energys 2009 Integrated Resource Plan, in which the three combined cycle plants replace 1,403 MW of renewable energy in alternate options The base case scenario assumes the following power plants to replace 1,403 MW of renewable energy:
525 MW Combined Cycle Plant in 2017 Two 558 MW Combined Cycle Plants in 2018 and 2022

In the renewable alternative, a different fossil fuel plant must still be constructed to meet demand when renewables are unable to do so:
576 MW 8-7EA Combustion Turbine Plant

A scalar is needed to replace varying levels of renewable energy in some scenarios


Source: Calculation based on data reported by NV Energy and Aspen Environmental Group

Analysis Assumptions
Summary of Fossil Fuel Construction Costs
($ in millions) Base Scenario Lost Construction Costs Combined Cycle 525 MW in 2017 Combined Cycle 558 MW in 2018 Combined Cycle 558 MW in 2022 Total Base Scenario Lost Construction Combustion Turbine 8-7EA 576 MW in 2017 Total Renewable Fossil Fuel Construction -$604.3 -$642.3 - $642.3 -$1,888.9 Renewable Scenarios Construction Costs $640.0 $640.0 Net Base Scenario Lost Construction Costs Net Base Scenario Lost Construction Costs
*This figure is scaled by a multiplier for each scenario
Source: 2009 NV Energy IRP, Aspen Environmental Group, Calculations

-$1,248.9*

Summary of Annual Fossil Fuel O&M Costs


Combined Cycle 525 MW in 2017 Combined Cycle 558 MW in 2018 Combined Cycle 558 MW in 2022 Total Base Scenario Lost O&M Combustion Turbine 8-7EA 576 MW in 2017 Total Renewable Fossil Fuel O&M

Analysis Assumptions
($ in millions, totals after 2022)

Base Scenario O&M Costs -$10.7 -$11.4 -$11.4 -$33.4 Renewable Scenarios O&M Costs $7.0 $7.0 Net Base Scenario Lost O&M Costs Net Base Scenario Lost O&M Costs -$26.4*
Source: 2009 & 2012 NV Energy IRP, Aspen Environmental Group, Calculations

*This figure is scaled by a multiplier for each scenario

Analysis Assumptions
Ratio Assumptions

General Formula: Scenario MW (Alternative Scenario 1, 2, or 3) Nevada Energy Plan MW (1403 MW of Renewables)
Alternative #1: 1000 MW1403 MW = 0.713 Alternative #2: 1100 MW1403 MW = 0.784 Alternative #2: 1885 MW1403 MW = 1.344

Source: 2009 NV Energy Integrated Resource Plan (Cases 3 and 5 in Report), calculations

Analysis Assumptions
Incremental Capacity and Investment Matrix ($ in millions)
Alternative #1 (Clean RPS) Capacity Cost Solar PV1 Solar CSP2 Geothermal Wind Transmission Total
Source: Aspen Environmental Group (2013). 1PV: Photovoltaic. 2CSV: Concentrated solar power

Alternative #2 (Expand RPS) Capacity Cost 200 250 325 325 1,100 $319.0 $1,313.3 $1,693.6 $586.0 $246.4 $ 4,158.3

Alternative #3 (Clean & Expand RPS) Capacity Cost 360 400 600 525 1,885 $602.1 $2,223.0 $3,197.3 $981.0 $724.9 $ 7,728.3

200 200 300 300 1,000

$326.7 $1,060.5 $1,563.1 $553.5 $246.4 $3,750.2

Analysis Assumptions
Impact of Out-of-State Fuel Purchases
One of the largest costs for traditional power plants are fuel purchases from out-of state vendors Fuel imports remove dollars from the Nevada economy
Renewables redirect what would have been fuel costs towards capital costs The capital costs of renewables have some impact that remains in-state, whereas the costs of fuel do not

A 576 MW combined cycle plant (the type of plant not built with renewables in Base Scenario), is expected to produce 2.688 million MW-hours of electricity in a year A plant of this size is estimated to consume 18.8 trillion BTUs of natural gas in production At $5 per million BTU, the plant will spend an estimated $93.8 million on fuel each year; roughly 3 additional plants of this size will be needed in the base scenario when compared to an additional 1,403 MW of renewable capacity.
Source: Calculation based on data reported by NV Energy and Aspen Environmental Group