GERLACH, Nev., July 13, 2005 (PRIMEZONE) -- Washoe County and northern Nevada will reap thousands of new jobs and more than half a billion dollars in economic benefits if Sempra Generation builds a proposed $2.5 billion, 1,450-megawatt power plant near Gerlach, Nev., according to a new study conducted jointly by the University of Nevada-Reno and Economic Consulting Inc., an economic research firm.
The proposed coal-fueled Sempra Generation project would be built about 10 miles northwest of Gerlach, Nev., located near facilities vital for plant operations, such as a rail spur, a connection to the power grid and land and water resources.
The study also projects the total economic impact for northern Nevada during construction at $458 million. The additional tax revenues for Washoe County during construction are expected to be about $214 million, which includes sales taxes generated on purchases made by project workers and subcontractors, as well as project sales and property taxes.
As a result of the project, average annual property taxes, paid by Granite Fox Power, are estimated at $14.8 million over a 30-year period.
In the first year of operation, the estimated property tax paid to Washoe County could be approximately $24 million. This represents a 20-percent increase in all property taxes collected in Washoe County in 2004. The project is expected to be the county's largest taxpayer.
Once operational, Granite Fox's payroll is estimated at $14.4 million annually over 20 years.
The proposed power project also will have a significant beneficial impact on state and local economies, according to the study. As a result of the plant, state and local sales and services during the first 20 years of the project will increase by $4.3 million annually. During this time, the combined positive economic impact in Washoe and Lyon counties will be $18.6 million annually, the study finds. The rise in the sales figures will occur due to increased demand for retail services and suppliers in the region to support plant operations.
"Washoe County and northern Nevada will realize substantial economic benefits from Granite Fox during the construction period and for more than two decades of operation," said Dick Bartholet, director of research development for the University of Nevada-Reno's Bureau of Business and Economic Research.
"Even though the study used very conservative methods in reaching its conclusions, it demonstrates significant monetary benefits for Washoe County and northern Nevada," said Marty Swartz, director of development for Sempra Generation's Granite Fox Power Project. "We expect that the positive economic impact of our project will exceed those predicted in the study."
The economic analysis was conducted using a financial model widely known and respected by financial experts across the nation, according to Bartholet. The model analyzed both the direct and indirect economic impacts of the project by estimating employment and sales during five years of construction and the first 20 years of operation.
The study finds that during the first full year of the power plant's construction phase, 3,700 new year-round jobs will be created in Washoe and Lyon counties. This estimate includes more than 2,150 construction workers and 1,250 new employees at industries supported by project construction, such as hotels, restaurants, grocery stores and suppliers.
Once the plant is operational, a total of 304 new jobs will be created in the county during the first year. This number includes the 140 full-time employees Granite Fox Power will need to operate the plant.
Another significant benefit provided by Granite Fox Power is its anticipated $150 million upgrade to the electric transmission system that is expected to provide grid and market access for at least 200 megawatts of future wind, solar and geothermal power, should these power sources be developed.
The plant will generate enough stable, affordable and reliable power for more than 1.4 million potential electricity customers in northern Nevada, the Pacific Northwest and Southern California. Granite Fox Power will be one of the cleanest coal-fired power plants in the nation and employ the best available technologies on its air-emissions-control systems.
Sempra Generation develops, acquires, operates and maintains power plants and energy infrastructure for competitive markets.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2004 revenues of $9.4 billion. The Sempra Energy companies' 13,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.
This presentation contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; and other uncertainties, all of which are difficult to predict and many of which are beyond the company's control. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company's Web site, www.sempra.com.
Sempra Generation is not the same company as the utilities SDG&E/SoCalGas, and it is not regulated by the California Public Utilities Commission.