The Intermountain Power Project (IPP) is located in the Great Basin region of western Utah and generates more than 13 million megawatt hours of energy each year from its two coal-fired units. In 2008, IPP contributed about $627 million in economic activity, 3,350 jobs, and $147 million in household earnings to Utah’s economy.
Utah Foundation has been asked to assess the economic impact of the Intermountain Power Project (IPP) in Utah. The most straightforward manner in which to assess this economic impact is with multiplier analysis. To be consistent with the most recent RIMS II multipliers, this study assesses the economic impact for the year ending June 30, 2008. In addition, financial forecasts provide the basis to estimate economic impacts out to the year 2026.
Using the RIMS II multipliers, it is possible to calculate the economic multiplier effect of IPP on state output, employment, and household earnings. Results from the analysis show that in the year ending June 30, 2008, IPP contributed just under $627 million in economic activity to the state, which equals six tenths of one percent of total output generated by the Utah economy.
The project’s expenditures created approximately 3,350 non-farm jobs in the state of Utah, accounting for just under three tenths of one percent of Utah’s total employment. IPP also contributed just over $147 million in household earnings during this one-year period, or one third of one percent of total Utah household earnings.
The analysis demonstrates that, through the year 2026, IPP may be relied upon to continue to contribute in the magnitude of 0.60% of state GDP, 0.25% of state employment, and between 0.25% and 0.30% of Utah’s total household earnings each year. This equates to an average contribution per year of $866 million in economic activity to the state, 4,600 non-farm jobs, and $222 million in household earnings.
The contribution IPP is projected to make to the state, both today and through 2026, makes it an important mainstay in Utah’s economy.