Report: NPU has far-reaching financial benefits
Norwich — Norwich Public Utilities contributes almost $13 million annually to the Norwich community through direct payments to the city, services, energy rebates, community activities and charitable donations, plus millions more in outside financial benefits and jobs with its construction projects, a new report generated by an economic research group concluded.
The Board of Utilities Commissioners on Tuesday received the 12-page report by the Connecticut Center for Economic Analysis at the University of Connecticut. Fred Carstensen, director the center created by former Gov. Lowell P. Weicker in 1992 to provide economic analyses, is expected to give a presentation at the November utilities commission meeting.
NPU paid the center $15,000 for the research and report, which will be posted on the utility’s website.
“We’ve never done this before,” NPU spokesman Chris Riley said of the effort. “You look at a lot of the benefits of NPU, and it’s obvious every day — the (utility) services, and the $8.5 million that goes back to the city. This is looking longer term, three, six, 10 years down the road. It’s very helpful to us, because it will help with capital planning and decisions on how we want to go forward.”
The report calculated financial and employment impacts of NPU’s regular services — electric, natural gas, water and sewer — its direct revenue payments to the city, its construction and investment projects, as well as lesser known support to the community.
“Investments aside, NPU contributions to Norwich exceed $12.9 million annually,” the report concluded. “In and of themselves, NPU’s community activities make sustained significant contributions to Norwich and its citizens’ wellbeing.”
The city charter calls for NPU to pay at least 10 percent of gross revenues generated through electricity, water and natural gas sales to the city to help offset city property taxes, calculated at about $8.5 million last year. The report called the revenue contribution “a generous alternative to the 9.53 percent of property taxes paid (by) utilities in the average Connecticut jurisdiction.”
In addition to those direct payments, the UConn group listed 12 categories of contributions totaling $4.1 million NPU made to the Norwich community in the 2016-17 fiscal year.
Leading that category is the $1.1 million in energy assistance payments to NPU customers through the Thames Valley Council for Community Action. The money for those payments did not come from NPU, but NPU funds the TVCCA staff person who works at the utility’s headquarters processing applications for NPU customers, Riley said.
Other items in the table included $154,500 in value for the internet and fiber optic services provided to the city, $205,000 for maintaining traffic lights and ventilation systems in city buildings, $131,419 for installing holiday lights and $400,000 for energy assessments to city businesses and homes.
NPU also donated $38,951 to Norwich Historical Society to renovate the 18th century East District Schoolhouse on Washington Street and contributed $115,000 in other donations to local charities, including NPU employees’ United Way donations.
The economic analysis group stated in the report that in general, its research calculates financial impacts at the county level, but the “vast majority” of NPU’s impacts rest in Norwich and surrounding towns.
Outside those direct financial benefits, the report attempted to quantify the impact to the local economy of NPU’s future construction projects and investments in its own infrastructure improvements. Factors included employment outside NPU’s permanent 150 employees, spending in the local area by those workers and equipment provided by businesses to those projects.
The report acknowledged that capital projects are better defined for the coming five years and are less reliable for future years.
In the five-year outlook from 2017 through 2022, NPU activities and planned investment is expected to add between 200 and 777 jobs per year to the region, generate a combined total of $221 million in “Real Gross Domestic Product” and $167 million in disposable income to individuals and households, while also generating $26 million in state and local government revenues.
“Because employment and expenditures are largely in Norwich, the vast majority of the impacts will also be in the City or in close proximity,” the report executive summary concluded. “NPU thus clearly delivers value to the City of Norwich and its citizens.”