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Understanding the Economics Behind Lava Ridge Wind Project

Outline of wind turbines in a field as sun sets

By IEF Staff

Lava Ridge Wind is a 1000+ megawatt project that would span Lincoln, Jerome, and Minidoka Counties. That’s about enough energy to provide year-round power to 1,200 homes. The project has faced controversy locally, particularly with the Stop Lava Ridge Facebook group, and the county commissioners of the three impacted counties coming out in opposition to it. Because the wind project would include turbines on federal public land, it requires approval from the Bureau of Land Management (BLM). A draft environmental impact statement from the BLM subcommittee is anticipated in early 2023.

To understand the proposed project, it’s important to understand how Idaho gets its energy right now. According to the US Energy Information Administration, in 2021, net generation of electricity from utility-scale generators in the United States was about 4,116 billion kilowatthours (kWh) (or about 4.12 trillion kWh). In 2021, about 61% of U.S. utility-scale electricity generation was produced from fossil fuels (coal, natural gas, and petroleum), about 19% was from nuclear energy, and about 20% was from renewable energy sources. Seventy percent of the energy consumed in Idaho comes from out of state. Of the energy generated here, 51% comes from hydroelectric dams, which are impacted by increasingly intense drought years, and the balance from wind and natural gas. 

Wind is a growth area for Idaho’s energy makeup. Idaho ranks 18th in the nation for untapped wind energy potential, with an estimated capacity of 212,830 megawatts and just 973 megawatts currently installed. Wind energy accounts for just over 14% of the state’s electric grid. 

If it passes the BLM approval process, Lava Ridge Wind Project would generate more than 700 jobs and more than $80 million in tax revenue for the three counties impacted. Once in operation, the project would support 20 local jobs and supply $4 million annually in tax revenue. That’s a significant amount, given that the Twin Falls public school district has an annual general fund budget of $75 million, with $5 million coming from local government coffers. 

The economic impact of Lava Ridge would be felt over two phases, starting with the two-year construction phase. During this initial phase, the Lava Ridge developer estimates that a total of $87,915,700 would be generated through property, sales and excise, and income taxes. Once in operation, the total annual tax revenue would be just over $4.5 million. 

In terms of supporting local community organizations in the three impacted counties, the benefits are quite significant, particularly given that Lincoln and Jerome counties struggle with generating the household income needed to support a family. Jerome County ranks 43rd out of 44 Idaho counties for income per capita, with Minidoka ranking 40th, and even Twin Falls only 21st. For example, once Lava Ridge is operational, in Lincoln County, the ambulance district would receive $73,000 a year and Dietrich School would receive nearly $130,000 a year. Minidoka School would receive $143,000 a year, and the Jerome District would receive $375,000 a year. 

While the Lava Ridge Project has faced vocal opposition, it’s not clear that the loudest voices represent the majority of Magic Valley residents. No project is perfect, that’s why the BLM subcommittee allows for frequent opportunities for public involvement and comment. With the demand for wind energy growing and the need for high-paying jobs and tax revenue to support our public schools, highways, and emergency services, perhaps we should get the facts before rushing to judgment that wind energy isn’t right for our communities. 

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