As published in Toledo Business Journal - March 1, 2014
A major project at the Davis-Besse Nuclear Power Station in Oak Harbor will have a significant economic impact on Ottawa County and the State of Ohio. The project is expected to boost the local economy by more than $108 million, with overall economic benefits expected to exceed $150 million statewide, according to an economic study completed by Phoenix-based consulting firm Applied Economics.
The shutdown of this facility for a large construction project is having far-reaching impact. The facility outage includes installation of two new steam generators, 470-ton components that produce the superheated steam used to drive the turbine generator, which ultimately produces electricity.
The $600 million steam generator replacement project and refueling outage will employ as many as 2,300 additional local and traveling contractor workers in addition to Davis-Besse’s regular workforce. Outage workers began arriving in preparation for the project last fall, with the peak number of workers expected in February and March. More than $147 million will be spent in salaries for on-site temporary workers during the project.
“Installation of new steam generators is one of the largest projects to occur at Davis-Besse since construction of the facility,” stated Davis-Besse site vice president Ray Lieb. “The effort requires much more equipment, supplies, and manpower than a regular refueling outage. Completion of the project will help ensure that Davis-Besse remains an integral part of northwest Ohio’s economy, and a safe, reliable, and clean energy source, now and in the future.”
FirstEnergy, its suppliers, and the additional outage workforce will require many goods and services over the project’s duration, with local businesses supplying much of this need. The economic impact study estimates important benefit to the local economy, as out-of-town workers stay in area hotels, eat in local restaurants, and frequent area stores.
There will be approximately 19,200 visitor nights associated with non-local contractors working on this project that will stay in hotels or rental housing, eat in restaurants, and make local retail purchases. These non-local contractors will create an economic impact of $2.5 million during the construction period, supporting about 30 jobs, mostly in the Toledo region.
An additional $38 million is expected to be spent on local goods and services to support the outage, including building and office supplies and other construction services. Total impacts from local supplier purchases and spending, which includes the jobs and income created at area businesses due to increased demand for services from the project and also normal purchases to support the operations is estimated at more than $147 million.
Other economic factors included in the overall $108 million incremental local benefit include taxes generated by the plant, its contractors, and employees; Davis-Besse employee personal income and spending; and value of production at the plant.
The largest component of Davis-Besse’s impact is through its local vendor purchases. Based on the types of supplies typically purchased by electric generating facilities and the suppliers available locally and within the state, it is estimated that the company’s vendor purchases create an impact of approximately $23.6 million per year in Ottawa County and $66.4 million statewide. This supports an estimated 430 jobs and $19.5 million per year in personal income statewide.
“FirstEnergy’s Davis-Besse Nuclear Power Station is Ottawa County’s largest employer, with more than 700 employees from throughout northwest Ohio and southeast Michigan working at the facility. In addition, several area contractors and skilled trades employees provide critical services to the plant on a daily basis. The Steam Generator Replacement and Refueling Outage is certainly one of the largest capital investment projects we will see in northwest Ohio and the Great Lakes region in 2014,” stated Jamie Beier Grant, director of the Ottawa County Improvement Corporation.
“Ottawa County and Davis-Besse have been working together for several months to ensure that our community is prepared to provide the necessary services and support to the visiting workforce, which is one important aspect of supporting a successful project. Ottawa County is fortunate to have the Davis-Besse Nuclear Power Station in our community and we look forward to continuing the strong partnership that exists between the company and the community,” Grant explained.
“Davis-Besse has been an important contributor to the economic prosperity of Ottawa County for nearly four decades,” added Larry Fletcher, executive director of the Lake Erie Shores and Island Visitor’s Bureau in Port Clinton. “We welcome the out of town workers assisting with the outage during their stay, and we look forward to showing them the warm hospitality and many top-rate services our area has to offer.”
The Davis-Besse Nuclear Power Station, operated by FirstEnergy Nuclear Operating Company (FENOC), a subsidiary of FirstEnergy Corp., produces 900 megawatts of carbon-free electricity with no greenhouse gases or air pollutants, according to the company. Davis-Besse provides more than 700 full-time jobs during normal operations. The plant also contributes more than $13 million each year in local and state taxes.
FirstEnergy is a diversified energy company headquartered in Akron, Ohio. Its FENOC subsidiary also operates the Beaver Valley Power Station in Shippingport, Pennsylvania, and the Perry Nuclear Power Plant in Perry, Ohio.
The author of the economic impact study, Applied Economics, is an economic consulting firm, based in Phoenix, Arizona, specializing in economic development, economic and fiscal impact assessment, socioeconomic modeling, urban planning, and custom software applications. Applied Economics conducts economic and fiscal impact studies and develops models to measure the effects of a wide variety of activities. These activities include development land use and policy changes, business-driven economic impacts, incentives, and program-driven economic and fiscal impacts.