Electricity transmission facilities are major investments. They have traditionally been funded by local utilities, with costs allocated across the local users. Improving the grid, however, requires more than a patchwork of locally planned and funded improvements. In the Midwest and other areas of the country, states, utilities, and other stakeholders have agreed to pursue a regional approach to plan and build a more robust grid. As a result, many new transmission projects are now designed to benefit large geographic areas.
Midwest Independent Transmission System Operator, Inc. (MISO)—an independent, non-for-profit corporation of grid stakeholders in the Midwest—is responsible for managing and planning this region’s grid. In early 2009, MISO began developing a new cost allocation method to be used specifically for regionally beneficial transmission projects. The approved cost allocation method assigns costs based on load (actual use of electricity), and applies only to a new category of projects called “Multi-Value Projects” (MVPs).
The MISO cost allocation for MVPs, which FERC found to be consistent with the “beneficiary pays” cost allocation principle, is now being challenged by parties that feel it does not assign costs in a way that is commensurate with benefits.
In this report, we assess whether or not the MVP cost allocation methodology is consistent with the legal principle that costs should be “at least roughly commensurate with benefits.” We also consider whether there is any evidence that the approved methodology places an unfair cost burden on Lower Michigan. Finally, we assess the risks and consequences that stem from modifying the structure of the already adopted cost allocation.
The University Research Corridor (URC) is an alliance of Michigan’s three largest academic institutions: Michigan State University, the University of Michigan, and Wayne State University. The purpose of this alliance is to accelerate economic growth in Michigan by educating students, attracting talented workers, supporting innovation, and facilitating the transfer of technology to the private sector.
This report is part of a series of special topic reports that began in 2007 and are released by the URC in early summer of each year. The purpose of each report is to highlight the URC’s contributions to a specific industry important to Michigan’s economy. This year’s report focuses on how the URC is shaping Michigan’s Information and Communication Technology industry (ICT) through its educational programs, research, and support for entrepreneurs.
We begin this report by developing a rigorous, comprehensive definition of the information and communication technology industry. This industry consists of the study, design, development, implementation, and management of information systems. It focuses on communication technologies, including the Internet, wireless networks, cell phones, and computer-based information systems.
Blue Cross and Blue Shield of Michigan (BCBSM), a major provider of health insurance plans to businesses, government units and private individuals in the state of Michigan, and its subsidiary, Accident Fund Insurance Company of America (AFICA) are in the process of relocating and consolidating workers in Lansing, Grand Rapids, and Detroit and their suburbs to downtown locations in those cities. In addition to consolidating its existing workers, AFICA will add over 500 new workers to its Lansing-area work force. In all, BCBSM and AFICA will have moved workers from nine suburban and urban worksites to five urban worksites, investing significantly in constructing and renovating the new sites. These relocations are part of Blue Cross’s desire to contribute to enhancing the vitality of Michigan’s urban cores.
BCBSM has retained Anderson Economic Group, LLC (AEG) to assess the effects of these three downtown consolidations of workers. In this report we discuss the benefits that these plans will have in terms of both quantitative economic measures, such as employment, earnings, and tax revenue, and the important signaling, cultural, and place-making effects of having a large, stable employer in these cities’ downtowns.
Detroit Tigers 2008 Net Economic Impact from Attendance
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Anderson Economic Group, LLC, is an economic consulting firm with offices in Chicago, Illinois; East Lansing, Michigan; and Los Angeles, California. We have prepared this independent analysis of the likely economic impact of the proposed 2016 Summer Olympics in Chicago, and are making it publicly available before the IOC announcement date of October 2, 2009.
We are preparing this study to provide other Chicago-area businesses, as well as taxpayers and policymakers, a realistic assessment of the actual costs and benefits of hosting the games. Our analysis of past major events, and our past evaluations of the value of sports-related and other businesses, gives us a unique position to carefully examine this question.
Boosters of large sporting events and stadium construction have sometimes claimed economic benefits that later proved far too good to be true. However, our analyses of both sports franchises, and cities in which sporting teams oper-ate, show that some events can provide economic benefits that far exceed the costs. Given the scale of the Olympics, and the exposure it would give to Chi-cago on a world stage, it is certainly worth carefully considering the costs, risks, and benefits.
We have used a rigorous methodology to estimate the likelly economic impact of events like the 2016 Summer Olympics.