Study: SunZia Southwest to represent $1.5bn capital investment

Construction of the SunZia Southwest Transmission Project’s two 500-kV transmission lines and five electrical substations will create substantial job, salary and tax revenue benefits for Arizona and New Mexico, according to a new study.

SunZia said Nov. 22 that the joint study by the University of Arizona and New Mexico State University analyzed two areas of economic impact of a new transmission system between the two states: construction and operation of the lines and substations; and construction and operation of renewable generation projects that could develop as a result of SunZia.

The study found that SunZia itself will create about 6,200 jobs during a four-year construction period and more than 120 permanent jobs during operation. Furthermore, SunZia could enable renewable energy projects creating more than 36,700 jobs during a two-year construction period and more than 480 permanent jobs.

SunZia also said the universities estimated that the construction cost of SunZia’s transmission lines and substations represents a capital investment of about $1.5bn, and that if the project’s configuration were to include a DC line in place of one of the two AC lines, job, salary and tax revenue impacts all would increase.

According to the study, SunZia will create $425m in estimated wages and salaries during construction; more than $90m in state and local taxes during construction; $8m per year in wages and salaries during operation; and more than $10m in property tax revenues during the first year of operation.

The development of 3,000 MW of renewable energy projects could result in more than $2.15bn in wages and salaries during construction; more than $150m in state and local taxes during construction; more than $29m per year in wages and salaries during operation; and more than $60m in property tax revenues during the first year of operation.

“What we found most striking from the data we compiled was the positive economic effect SunZia would have on rural economies in Arizona and New Mexico, many of which are struggling with extremely high unemployment rates,” co-author Alberta Charney of the University of Arizona, said in the statement.

According to TransmissionHub data, a consortium of six companies is sponsoring the project: Southwestern Power Group II/MMR Group, Shell WindEnergy, and Tucson Electric Power, the three accounting for 86%; Salt River Project (13%), and Tri-State Generation and Transmission Association (1%).

The project is among the seven chosen by the Obama administration to accelerate permitting and construction.

About Corina Rivera-Linares 3152 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.