economic impact of baltimore gas and electric company · regional economy. as shown in figure 5,...

An Exelon Company

Economic Impact of

Baltimore Gas and Electric Company

Prepared for:

110 W Fayette Street Baltimore, Maryland 21201 bge.com

110 W Fayette Street, Baltimore, MD 21201 | bge.com

Contents

Introduction 2

Key Terms and Concepts 3 Study Area 1: BGE Service Area 4 Study Area 2: Counties Within the Baltimore Metropolitan Statistical Area 5 Study Area 3: State of Maryland 6

Key Findings: Service Area Impacts 7

Summary Table: Service Area and State of Maryland Impacts 8

General Operations Economic Impacts 9 BGE Service Area 9 State of Maryland 11 Greater Baltimore Metropolitan Statistical Area 11

Energy Management Programs Economic Impacts 13 BGE Service Area 13 State of Maryland 16 Greater Baltimore Metropolitan Statistical Area 16

Charitable Giving Program Economic Impacts 18 BGE Service Area 18 State of Maryland 19 Greater Baltimore Metropolitan Statistical Area 20

Technical Notes 21

Previous Study 22


1

BGE Employees by Location of Residence

Jurisdiction Total Employees us Maryland

BGE Service Area

' I

3,048

2,817

2,773

I -~-..

Introduction

Baltimore Gas and Electric Company (BGE) serves electricity and natural gas customers across an

economically and geographically diverse 2,300-square-mile area in Central Maryland. Residents of

Baltimore City and all or part of ten Central Maryland counties receive utility service from BGE.

BGE engaged the Economic Alliance of Greater Baltimore (EAGB) to estimate the economic

contributions of BGE in 2015, accounting for both its direct economic contributions, as well as the

indirect and induced economic activity in which additional impacts were supported by the company’s

demand for goods and services and BGE employee expenditures in the economy. EAGB utilized the

IMPLAN model to estimate the aggregate economic impacts of the following study areas:

BGE Service Area (total geography of each county with service)

Counties Within the Baltimore Metropolitan Statistical Area

The State of Maryland

BGE directly provided data used to construct the model. Information provided by BGE is recorded on

auditable documents reported to utility regulators. The economic contributions of three distinct BGE

activities were measured to estimate the full economic impact associated with the utility provider:

General Operations: all activities, including capital investment and operations and maintenance

expenses, associated with BGE’s energy supply, electric and natural gas transmission and

distribution, customer care, and corporate and administrative services

Energy Management Programs: activities related to administering BGE’s customer energy

management programs, providing incentives for both residential and commercial customers’

energy efficiency projects, steps taken to improve demand side management, offering energy

audits and other technical support, as well as customer bill savings directly resulting from energy

efficiency and demand side management measures

Charitable Giving Program: activities related to BGE’s community investment programs, which

consist of contributions to charitable organizations located within the study areas

Figure 1 This report summarizes the results of the economic

impact analysis for each of the three BGE activities.

The discussions of economic impacts throughout this

report are separated by activity and by geographic

study area. Figure 1 details the number of workers

employed by BGE based on location of residence.

Source: BGE

110 W Fayette Street, Baltimore, MD 21201 | bge.com 2

Key Terms and Concepts

There are three key effects that together make up the aggregate economic impact of BGE employment,

all of which are covered by this report. They include:

Direct Effect: Economic activities directly associated with BGE’s general operations, customer

energy management programs, and charitable giving program. For BGE’s general operations, the

direct impact consists of the market value of goods and services provided by BGE, measured by

revenue. Direct effects also include the BGE workforce and the associated wages of full- and part-

time workers.

Indirect Effect: Second-order economic activities of industries that respond to BGE demand

generated by the direct economic activities. These industries supply goods and services to BGE.

For BGE’s general operations, the indirect impact includes the company’s capital investments and

operations and maintenance expenditures. Examples of industries that experience indirect impact

of BGE activities include construction, engineering, and legal services.

Induced Effect: Refers to the economic activities generated by spending from workers supported

by the direct and indirect effects of BGE activities. As full- and part-time workers employed by BGE

or a BGE-supported industry use their income on typical household consumption, they create

additional economic activity. Workers that use their income to purchase retail, housing, banking,

and food services support the employment and wages of workers in those industries.

The sum of direct, indirect, and induced effects represents the total gross economic impact.

The direct, indirect, and induced effects can be measured in several different ways. The following

economic factors are used in this report and, as distinct measures, should not be combined to estimate

total economic impact:

Employment: the number of jobs supported

Labor Income: the dollars paid as wages and benefits to workers, as well as proprietor’s income

Output: the market value of goods produced or services provided, frequently reflected as total

revenue or sales in businesses

Tax Generation: the state and local taxes and fees generated, including sales, property, income,

and several other tax and fee categories

This analysis was conducted based on BGE’s commuter shed, or where BGE employees reside,

because the location of residence determines wage expenditures on local industries. Because of this

distinction, the induced impacts that the 231 BGE employees residing outside the state of Maryland

have on their communities are not included in this report. Note that BGE generates additional induced

impacts on the states of Pennsylvania, Delaware, and Virginia; states immediately bordering the

commuter shed.


-.......111w

GMTHIIISIIUIIG

BGE Service Area 5,136,453

N

w E

Electric Service Boundary - Natural Gas Service Boundary

Currently Served by Both - Natural Gas Service Only

2 ,773

Study Area 1: BGE Service Area

Figure 2 – BGE Service Area

Source: BGE

Source: IMPLAN, BGE The BGE Service Area contains all Maryland counties that receive gas or electric service from BGE. This also includes the total population of all counties within the service area.


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County Population BGE Employees

Baltimore MSA 2,797,407 2,708 Anne Arundel 564,195 404 Baltimore 831 ,128 1,080 Carroll 167,627 239 Harford 250,290 482 Howard 313,414 127 Queen Anne's 48,904 24 Baltimore Ci 621 ,849 352

Study Area 2: Counties Within the Greater Baltimore Metropolitan Area

Figure 3 – Greater Baltimore Metropolitan Statistical Area

Source: EAGB

Source: IMPLAN, BGE


State Population BGE Employees

Ma~land 6 006 401 2 817i

' I

I -~-..

Study Area 3: State of Maryland

Figure 4 – State of Maryland

Source: EAGB

Source: IMPLAN, BGE


Insurance agencies brokerages, and related activities

S5.13 billion

$5.04 billion Legal Services

BGE Total Output Impact

Employment Services

Retail of Food and Beverage

$5.01 billion

$4.40 billion

$4.05 billion

Key Findings: Service Area Impacts

General Operations

BGE provides customers with reliable electric and gas utility service across the Central Maryland

region. The company is one of the 25 largest private employers in the state.

The total annual economic contributions resulting from BGE's 2015 general operations in its Service

Area amounted to approximately 9,580 jobs, $922.60

million of labor income, and $5.01 billion of output.

BGE's total output impact on the Service Area of $5.01

billion can be compared to the direct output of the legal

services industry at $5.04 billion and the retail food and

beverage industry at $4.05 billion.

BGE's general operations supported approximately 1.48%

of the Service Area's total economic output of $338.32

billion. Source: IMPLAN 2015

Energy Management Programs

BGE offers residential and commercial customers the opportunity to reduce energy consumption

and monthly expenditures on energy use through a wide variety of energy management programs.

These energy management programs are supported by customers and EmPOWER Maryland

legislation, and are facilitated by BGE.

BGE generated an energy management savings for its customers of $92.44 million in the Service

Area to support operations and consumer investment in energy management measures. The total

impacts of BGE's dedication to customer energy management in the Service Area equates to 792

jobs, $47.76 million in labor income, and $227.04 million in output.

For every dollar of savings that BGE passed on to customers through energy management

programs within the Service Area, $2.46 of output was generated in the Service Area economy.

Charitable Giving Program

Through BGE's shareholder-funded charitable giving program, the company supports education,

environmental stewardship, community development, and arts and culture programs. In addition to

assistance to maintain existing programs and launch new programs, these funds support the

internal operations of the recipient organizations, which generates economic benefit.

$4.50 million of donations from BGE's charitable giving program to recipient organizations within the

Service Area supported $1.93 million in labor income and $8.09 million of output.

BGE employees elect to volunteer their time outside the office to support community improvement.

BGE employee volunteer hours help to sustain and create important programs and organizations to

fill key community needs. In 2015, BGE employees provided 23,000 volunteer hours to local

causes.


BGE Total Economic Impacts, 2015

Study Area & Impact General Operations Energy Management Charitable Giving Programs Program

BGE Service Area Employment 9,580 792 Labor Income $922,601,414 $47,763,231 $1 ,929,029 Ou ut $5 014 074 113 $227,039,620 $8 087 486

Maryland

Employment 10,211 795 Labor Income $954,669,103 $47,866,823 $1 ,933,295 Ou ut $5,216,130,162 $227,483,235 $8,142,539

Summary Table: Service Area and State of

Maryland

Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data


$422 million wages to employees

$1.07 billion

payment for goods and services

•

BGE 2015 General Operations Total Service Area Economic Impacts Employment: 9,580 Labor Income: $922.60 million Output: $5.01 billion State & Local Taxes: $419.88 million

jj~j11irej31J $583 million*

payment for household goods

and services

$263 million wages

ll~jlltB1:(1] $583 million*

payment for household goods

and services

payment for goods and services

General Operations Economic Impacts

BGE Service Area

The primary role and first responsibility of BGE is the transmission and distribution of electricity and

natural gas to residents and businesses located in Central Maryland. BGE’s general operations

activities include those related to the company’s electric and natural gas transmission and distribution,

customer care, and corporate and administrative services. In 2015, general operations activities

generated approximately $3.14 billion of revenue, which

supported 2,773 direct employees in the BGE Service Area

and paid compensation to those employees totaling over

$421.84 million.

The economic activity created by BGE’s demand for goods

and services from local suppliers and BGE employees’

demand for household goods is multiplied throughout the

regional economy. As shown in Figure 5, the total economic contributions resulting from BGE’s 2015

general operations within the company’s Service Area totaled approximately 9,580 jobs, $922.60 million

of labor income, and $5.01 billion of output. Approximately $419.88 million of direct, indirect, and

induced state and local taxes were generated within the BGE Service Area.

*Induced impact is the total resulting from spending of both direct and indirect employees.


BGE 2015 General Operations Direct and Total service Area output

$3,135

Direct Output (Millions)

BGE General Operations Economic Impact, 2015

Multiplier= 1.60

$5,014

Total Output (Millions)

Study Area & Impact Direct Indirect Induced Total BGE Service Area

Employment

Labor Income

OutQut

Maryland

Employment

Labor Income

Output

2,773 $460,885,108

2,864 $262,966,579

$3,135,000,000 $1,295,811,877

2,817 3,313

$470,483,005 $280,234,663

$3,135,000,000 $1,427,962,204

3,943 $198,749,727

9,580 $922,601,414

$583,262,082 $5,014,074,113

4,081 10,211

$203,951,436 $954 ,669,103

$601,042,646 $5,216,130,162


BGE Service Area

The economic impacts of BGE on its Service Area reflect fairly robust multipliers that show an increase

of 2.45 jobs for every direct job supported by BGE’s general operations and an additional 60 cents of

output for every dollar of revenue directly generated by the company. BGE’s economic impacts were

distributed through nearly every industry in the service area, with

Food Service, Real Estate Establishments, and Hospitals seeing

the largest employment benefit. Construction, Wholesale Trade

Businesses, and Real Estate Establishments saw the largest

impact in output. The affected industries are influenced by the

fact that BGE is a utility company with considerable operating

expenses, capital investment, and labor income that circulates

through the Service Area economy.

BGE is highly regarded among its customers for reliability and

rapid service, which has steadily increased since 2008 to an all-

time high in 2014. BGE saw its second best year for reliability and fast service in 2015. In 2015, BGE

placed in the first quartile in reliability measures, indicating that BGE customers experience power

outages less often than customers of peer utilities around the country. The frequency of power outages

was the lowest on record in 2015.

Reliability of power and a rapid response to outages are important, and have significant effects on the

residential and commercial customers within the BGE Service Area. However, the impact of BGE’s

commitment to reliability is not included in this study. It is best represented by the absence of lost

revenue among its commercial customers and is therefore considered a direct effect of the companies

that rely on BGE to maintain operations. It is important to consider that businesses and homeowners

located in BGE’s Service Area benefit economically and create new impacts due to BGE reliability and

rapid response to outages such that BGE’s influence on the regional economy is greater than what is

Figure 5

outlined in this report.

Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data Note that `Labor Income` includes both employee compensation and proprietor income; also described in the Key Terms and Concepts.



State of Maryland and Greater Baltimore Metropolitan Area

As the effects of BGE’s general operations are followed through the State of Maryland, the company’s

economic impacts grow. Analyzing the whole of the state allows the model to include employees that

reside outside of the service area, increasing the net impacts of BGE general operation activities.

Additionally, a portion of what is considered leakage – wages and spending that result from BGE

outlays to firms located outside the study area – is captured.

At the statewide level, the economic impacts of BGE’s general operations grow to support 10,211 total

jobs, $954.67 million in labor income, and $5.22 billion of output. BGE generated an estimated $431.34

million in state and local taxes in 2015 alone through direct, indirect, and induced impacts of its general

operations activities. Each job that BGE’s general operations supported directly created 2.62 additional

jobs in the Maryland economy, and each dollar of revenue that BGE generated led to an additional 66

cents of output in the state.

Economic contributions to counties within the Baltimore MSA varied based on the level of BGE

employment and activity within each county, as well as the size and structure of the local economy.

BGE supported the greatest number of jobs and output in Baltimore County due to more of its

employees residing within those municipalities and greater levels of spending in the area. The

economic impacts of BGE on each of the counties within the Baltimore MSA are shown in Figure 6 on

the following page.



Study Area & Impact Direct Indirect Induced Total

Anne Arundel County Employment 404 523 522 1,449

Labor Income $61 ,960,990 $45,131 ,784 $23,701 ,947 $130,794,721 Output $498,617,379 $274,760,147 $72,181 ,597 $845,559,123

Baltimore County

Employment 1,080 469 1,021 2,570 Labor Income $169,992,840 $24,104,915 $45,901 ,649 $239,999,405

Output $798,440,672 $67,915,075 $132,657,392 $999,013,139

Carroll County

Employment 239 32 165 436

Labor Income $36,358,364 $899,646 $5,946,364 $43,204,373

Output $3,218,284 $19,359,017 $22,577,301

Harford County

Employment 482 27 313 822 Labor Income $73,325,238 $1,322,806 $11 ,662,155 $86,310,199

Output $3,266,613 $39,116,110 $42,382,724

Howard County

Employment 127 198 152 477

Labor Income $22,014,685 $16,904,637 $7,710,653 $46,629,975

Output $340,273,976 $49,781 ,896 $24,094,127 $414,149,998

Queen Anne's County

Employment 24 14 38

Labor Income $3,651 ,049 $419,935 $4,070,985

Output $867,915 $4,518,964

Baltimore City

Employment 352 317 262 931

Labor Income $62,615,963 $40,289,129 $14,941,407 $117,846,499

Output $700,558,822 $177,810,065 $40,756,744 $919,125,631

General Operations Economic Impact

Greater Baltimore Metropolitan Statistical Area

Figure 6

Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data. No direct output was generated within Harford and Queen Anne’s County as the counties do not have any BGE employment facilities in the area. Carroll County also generated no direct output as IMPLAN does not contain BGE’s select industry profiles for that geography; however all direct effects for Carroll County were captured through spending and employment. Queen Anne’s County had no indirect effects as it falls outside of the BGE service area, and therefore no direct spending occurred in that geography.


BGE 2015 Energy Management Total Service Area Economic Impacts Employment: 792 Labor Income: $47.76 million Output: $227.04 million State & Local Taxes: $7.05 million

BGE 2015 Energy Management Customer Saving and Total Service Area Output

$92.44 Every dollar of saVings generates S2.46 of new output

$227.04

Customer Savings Total Output (Millions) (Millions)

Energy Management Programs Economic

Impacts

BGE Service Area

BGE offers a range of energy management incentive programs aimed at helping residential,

commercial, and industrial customers reduce energy consumption and demand. These programs

include demand-side management programs like PeakRewardsSM targeted at reducing customer

demand during peak hours, and energy efficiency programs

that aid in customer investment in fixtures and appliances that

use less energy. In 2015 alone, residential and commercial

BGE customers saved a net total of $92.44 million through

reduced energy consumption and incentive, rebate, and bill

credit programs offered by the company. BGE administers

energy management programs and is authorized by the

Maryland Public Service Commission to charge a surcharge to cover the costs of rebates aimed at

reducing consumption in support of the State's EmPOWER initiative.

Energy cost savings realized through implementing energy efficiency measures reduce operating

costs and increase industry output for commercial customers, and make available additional

disposable income for residential customers that can be used for regular household consumption

activities; and

Residences and commercial and industrial customers that

elect to take advantage of BGE’s energy management

programs spur additional economic activity themselves through the purchase of equipment upgrades, hiring contracting services, and various other expenditures to industries that produce goods and services that sell products associated with energy consumption; and

Reduced energy consumption is beneficial to the regional

environment by reducing greenhouse gas emissions and energy demand.

The direct economic activities resulting from BGE’s customer energy management programs begin a

new round of ripple effects in the regional and state economies through indirect and induced activities.



Impacts

BGE Service Area

BGE offers customers a variety of ways to save money, energy, and benefit the environment that fall

under the BGE Smart Energy Savers Program® umbrella, including, but not limited to, the following:

The PeakRewardsSM program, which requires customers to install a smart thermostat or air

conditioning device, cycles participants’ air conditioners during periods of high demand in order to

reduce the likelihood of power outages and provides bill credits to customers participating in the

program. BGE customers saved $23.68 million in 2015 alone through its PeakRewards program.

The BGE Smart Energy Rewards® program awards bill credits to customers who cycle their usage

during periods of high energy use during the summer and requires only that customers have a

smart meter installed.

Rebates on high-efficiency heating and cooling equipment and services.

Retrocommissioning, or adjusting and troubleshooting, electrical, mechanical, and control systems

in existing commercial and industrial buildings to optimize energy performance.

Nearly 438,000 PeakRewards systems are installed in the service area, and more than 72,000

customers chose to participate in other BGE’s customer energy management programs in 2015. BGE

continues to install smart meters, which has allowed the company to reduce operations and

maintenance expenditures and pass savings along to its customers in the form of rates lower than what

they otherwise would be in the absence of such programs on monthly utility bills.

This analysis accounts for BGE’s role as the administrator of energy management programs that rely

on a partnership between customers, BGE, and EmPOWER Maryland and the direct, indirect, and

induced effects of the company’s Energy Management activities. For example, it does not take into

account the economic impact of an industrial customer that takes advantage of a BGE energy efficiency

program and hires a third-party contractor to install new equipment to do so. However, it is important to

know that this separate, distinct wave of economic impact exists, and that BGE and utility customers

can be considered prime movers in its inception.

An additional caveat exists when estimating the economic impact of savings of commercial customers

caused by introducing energy management measures. Each commercial and industrial customer

operating within the BGE Service area may, and likely will, utilize these cost savings differently: one

organization may pass its savings on to employees through increased compensation, another may

dedicate savings to an expanded marketing budget, while a third may make a capital purchase with its

savings. While each organization has benefitted from BGE’s demand side management and energy

efficiency programs, the impact of each on the local economy is quite different.


BGE Energy Management Programs Economic Impact, 2015


BGE Service Area

Employment 24 Labor Income $3,797,861 Output $94,504,749

Maryland

Employment 24

Labor Income $3,797,861

Output $94,504,749

302 466

$20,214,816 $23,750,554

$62,589,295 $69,945,576

304 467

$20,266,273 $23,802,689

$62,823,721 $70,154,765

792

$47,763,231

$227,039,620

795

$47,866,823

$227,483,235

' I

I -~-..


Impacts

BGE Service Area

The total economic impacts of BGE’s Energy Management activities shown in Figure 7 include

estimates for employment, labor income, and output that recognize a significant variance in the way

commercial customers elect to use the funds saved through BGE’s programs that promote demand

side management and energy efficiency. A large portion of the economic impact results from the

induced effects, as households have greater expendable income as the result of the savings and

wages passed down by employers.

BGE’s Energy Management activities, which include program administration, labor costs, and customer

savings as a result of avoided energy use produce a significant economic multiplier when compared to

the labor input. The activities of 24 employees within BGE contribute to 792 additional jobs in the

service area. For every dollar of savings that BGE passed on to customers through energy

management programs, $2.46 of output was generated in the Service Area economy. Providers of

household goods and services see the greatest benefit of BGE’s Energy Management activities by far:

the annual increase in household income that these programs represent has led to significant

expenditures in the food service, health care, and retail industries.

Despite only staffing 26 people to facilitate the entire company’s Energy Management activities, an

estimated 24 of whom live in the BGE Service Area and in the State of Maryland, BGE supports

approximately $47.76 million in labor income. BGE’s Energy Management activities also generated

approximately $6.61 million in state and local tax revenue.

A majority of the impacts of energy savings is realized in the form of induced effects. This is result

accounting for the monetary savings from energy programs as an increase in net income of households

and proprietors within the service area. However, some of the savings that were passed on to

commercial customers is spent on business related functions that manifest in the indirect impacts seen

below.

Figure 7




Impacts

State of Maryland and Greater Baltimore Metropolitan Statistical Area

Expanding the study area to the State of Maryland shows an increased economic impact generated by

BGE’s Energy Management activities. Although there is no direct energy savings generated by the

areas of Maryland that fall outside of the service area, the expanded geography captures more of the

indirect and induced spending from the service area, and thus reduces leakage. Throughout the State

of Maryland, BGE’s demand side management and energy efficiency programs supports approximately

$227.48 million of direct, indirect and induced output. Additionally, it generates $47.87 million in wages

and 795 jobs.

Figure 8 on the following page shows the economic impact of BGE’s Energy Management on each of

the counties within the Baltimore MSA that are served by BGE. Note that the total impact of the

counties does not equal the total impact of the MSA, as the larger geography is able to capture the

leakages of supplier relationships across county lines.




Anne Arundel County

Employment 4 39 89 135 Labor Income $7,552,182 Out ut $13,214,906 $8,393,520 $12,640,561 $34,862,971

Baltimore County

Employment 9 93 115 219 Labor Income $12,038,376 Output $27,612,767 $17,384,357 $15,617,499 $60,939,340

Carroll County

Employment 2 8 20 30 Labor Income $1,414,002 Out ut $3,715,748 $1 ,272,789 $2,336,133 $7,418,547i

Harford County

Employment 4 24 38 65 Labor Income $3,331 ,401

Out ut $8,664,663 $4,949,245 $4,742,227 $18,492,877i

Howard County Employment 1 26 59 87i Labor Income $5,486,354 Output $12,872,478 $6,784,206 $9,838,920 $29,323,699

Baltimore City

Employment 3 76 56 134 Labor Income $9,822,823 Output $17,984,471 $16,345,236 $9,637,195 $43,235,005


Impacts

Greater Baltimore Metropolitan Statistical Area

Figure 8

Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data In order to protect employee privacy, employment and labor income are reported in total impacts only. Queen Anne’s County is not included as it does not fall within the service area and is not the county of residence of any Energy Management employees.


BGE 2015 Charitable Giving Total Service Area Economic Impacts Labor Income: $1.93 million Output: $8.09 million State & Local Taxes: $266,863

BGE 2015 Charitable Giving Total Giving and Total service Area output

$4.50

Total Giving (Millions)

Every dollar of giving generates $1.80 of new output

$8.09

Total Output (Millions)

Charitable Giving Program Economic Impacts

philanthropic causes, including education, the environment, community development, and arts and

BGE Service Area

BGE supports the community in which its employees live and work through contributions to a variety of

culture. In 2015, through its charitable giving programs, BGE

provided $4.50 million to nonprofits in its Service Area to

advance efforts in improving education, the environment,

community development, and arts and culture.

Funding provided by BGE’s charitable giving helped to create

and sustain valuable programs and services in the community provided by nonprofits, educational

institutions, and local government entities as well as contributing to the regional economy through the

jobs and spending associated with the funded organizations themselves. For the purposes of this

analysis, it is assumed that all of BGE’s charitable giving

resembled that of the Grantmaking, Giving, and Social

Advocacy industry.

The funds allocated by BGE provided varying levels of support

for internal programs and operations across an array of

recipient organizations, which generated economic effects

within the BGE Service Area and the State of Maryland. The

direct impacts shown in Figure 10 include the workers that BGE

employees to manage its Charitable Giving activities. A majority

of the economic impacts of BGE’s charitable giving are associated with their activities included within

Grantmaking, Giving, and Social Advocacy.


BGE Charitable Giving Programs Economic Impact, 2015

. Arts

. Community Development

• Construction

.Education

. Emergency Response

Environment

• Food Service

• Relief Efforts


Labor Income $1,929,029 Output $4,495,144 $2,374,750 $1 ,217,591 $8,087,486

Maryland

Labor Income $1 ,933,295 Output $4,535,920 $2,384,172 $1 ,222,447 $8,142,539

Charitable Giving Program Economic Impacts

BGE Service Area and State of Maryland

BGE employees are personally committed to improving the community where they work and where

causes.

Figure 9 shows how BGE employees volunteer their

time, with community development, education, food

service, and environmental areas of activism being the

most common ways for BGE employees to donate

labor.

The time that BGE employees donate to myriad causes

creates significant positive effects such as improved

education outcomes, healthy and thriving communities,

support for the arts, and relief efforts

The direct, indirect, and induced effects of BGE’s charitable giving within the Service Area generated

an economic impact totaling more than $1.93 million in labor income, nearly $8.09 million of output, and

$266,863 of state and local tax revenue. For every dollar BGE invested in grants, giving, and social

advocacy, the Service Area’s output expanded by $1.80, derived from the direct, indirect and induced

effects.

Figure 10 shows the impact of BGE’s Charitable Giving Programs on employment, labor income, and

output in the BGE Service Area and the State of Maryland study areas.

Effects of BGE’s Charitable Giving Program are expanded when the larger geographic area of the State

of Maryland is used. Again because of the capturing additional leakage, and the additional charitable

giving, increased impacts can be traced back to BGE in the State of Maryland geographic scope.

VOLUNTEERISM

DISTIBUTION

Figure 9

they live through volunteering. In 2015, BGE employees provided 23,000 volunteer hours to local

Figure 10



BGE Charitable Giving Programs Economic Impact, 2015


Anne Arundel County

Labor Income $29,895

Output $142,500 $63,423 $16,468 $222,391

Baltimore County


Output $878,180 $376,107 $315,902 $1 ,570,189

Carroll County

Labor Income $6,646 Output $48,500 $17,585 $2,982 $69,067

Harford County

Labor Income $238,699 Output $351 878 $128 418 $108 142 $588,438

Howard County

Labor Income $22,576 Output $101 ,200 $46,051 $11 ,618 $158,869

Queen Anne's County

Labor Income $287 Output $2,340 $817 $113 $3,271

Baltimore City


Output $2,621 ,308 $851 ,232 $176,926 $3,649,466

Charitable Giving Program Economic Impacts Greater Baltimore Metropolitan Statistical Area

The impacts of BGE’s Charitable Giving activities on individual counties within the Baltimore MSA are

shown in Figure 11.

Figure 11

Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data In order to protect employee privacy, employment and labor income are reported in total impacts only. Counties that were not estimated to contain Charitable Giving Program employees did not produce any direct output.


BGE Background Data Summary

Factor Total

Headcount Employment

Labor Spending

Non-Labor Spending

Revenue

Energy Management Program Savings: Residential Energy Management Program Savings: Commercial

Charitable Giving

3,048

$463,821 ,647

$1 ,074,853,456

$3,135,000,000

$46,192,986 $46,247,951

$4,535,920

Technical Notes EAGB utilized the IMPLAN input-output model with the 2015 data set to conduct the economic impact analysis. The model was built to reflect the counties of the BGE Service Area, the State of Maryland, and individual counties within the Baltimore MSA, as well as specific BGE activities based on information provided directly by BGE for the year 2015. This analysis accounted for direct spending leakages out of the geographic areas as well as captured indirect and induced effects.

EAGB also used the model-derived tax impact analysis to estimate the aggregated state and local fiscal impacts associated with the direct, indirect, and induced economic effects.

BGE-provided background data for the impact model are shown in Figure 12 below.

Due to rounding, some data contained within figures in this report may not sum to their totals.

Figure 12

Source: BGE


Previous Study In 2014, the Economic Alliance of Greater Baltimore conducted a similar economic impact study for

BGE to estimate the impact of BGE on the study areas during 2013. An updated methodology was

used in calculating the 2015 impact compared to that of the 2013 study. This change in methodology

should not be seen as a detractor from the accuracy of either model, as both models had sufficient data

to build a complete and accurate model. Several factors contributed to this decision:

The Service Area study area was altered to include the totality of each county that fell within the

service area in 2015. In the 2013 study, specific ZIP codes were used in an Econometric Regional

Purchasing Coefficient model, with an older version of IMPLAN that is no longer supported, to

define the Service Area. In addition to the difference in geography, the previous service area model

did not support a multi-regional analysis, which increased the amount of leakage that occurred

throughout the model.

IMPLAN Capability Changes: The 2013 model was produced using the 2012 IMPLAN data

package, and was adjusted accordingly to reflect 2013. The current model was built using the

IMPLAN 2015 data package. The new data package contained industry profiles that closely

reflected BGE activities, which allowed a model to be constructed that utilized this built-in

framework. Conversely, the 2013 model utilized custom industry profiles to accurately reflect the

activities of BGE.

The 2015 study was conducted using the same methodology for both the Service area and the

State of Maryland geographies. The 2013 study used separate methodologies for the

aforementioned study areas.

Due to these adjustments, a direct comparison of the 2013 and 2015 results should not be analyzed. It

would be inaccurate to consider any of the net changes between 2013 and 2015 results as a gain or

loss in effects of BGE on the selected geographies’ economies. However, a general comparison of the

levels of impact generated in both studies show that both methodologies produced highly comparable

results. As point of reference, Figure 13 shows the summary results of the 2013 study. For full results,

see Economic Impact of BGE: June 2014.




Employment 3,035 3,048 2,603 8,686

Labor Income $323,294,648 $173,809,528 $127,232,408 $624,336,584 Output $3,050,000,000 $418,774,834 $342,147,675 $3,810,922,509

Maryland

Employment 3,100 3,384 2,669 9,153 Labor Income $330,218,586 $186,814,331 $130,663,644 $647,696,561 Output $3,050,000,000 $454,722,629 $351 ,273,601 $3,855,996,230



BGE Service Area Employment 21 195 548 764 Labor Income $2,167,490 $10,960,832 $27,002,654 $40,130,976 Output $110,299,107 $25,855,414 $72,956,298 $209,110,819

Maryland

Employment 21 215 561 798 Labor Income $2,167,490 $12,681 ,125 $28,387,276 $43,235,891

Output $110,299,107 $30,048,137 $75,726,216 $216,073,460

BGE Charitable Giving Economic Impact, 2013


BGE Service Area Labor Income $1,170,308 Output $3,586,407 $1 ,247,067 $641 ,744 $5,475,218

Maryland

Labor Income $1,339,257

Output $3,409,089 $1,617,909 $731 ,686 $5,758,684

Previous Study 2013 Summary Findings

Figure 13

Source: EAGB analysis of BGE Data


Notes


Economic Alliance of Greater Baltimore An Exelon Company

Prepared for: Prepared by:

110 W Fayette Street 1 East Pratt Street, Suite 200 Baltimore, MD 21201 Baltimore, MD 21202 bge.com www.GreaterBaltimore.org


economic impact of baltimore gas and electric company · regional economy. as shown in figure 5,...

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