The Hells Canyon Case 161 



This would be consistent with the preference provisions of the 

 Federal Power Act, and also with the realities of financing the 

 development at lower costs to provide power at rates attractive to 

 electro-process industries, thereby improving the prospects for 

 marketing profitably such a large block of new generation. ^^ In 

 the Hells Canyon case, however, no acceptable local organizations 

 appear to have been interested, nor did any such organization 

 present a plan to be seriously considered by the FPC. 



A third alternative would be to license, under authority of Sec- 

 tion 10(a) of the Federal Power Act, a private developer who had 

 exhibited an intent to develop that reach of river. In this case, 

 the FPC would have the authority, as a condition of the license, to 

 require modification of the plan of development so that it would 

 be best adapted to comprehensive development of the Columbia 

 and tributary system. A private firm could then decide whether or 

 not to undertake the development under conditions which, while 

 representing the most efficient plan from a social viewpoint, might 

 not be financially feasible within a private cost-gain calculus. 



If the private firm found that such conditions did not warrant 

 investment, there is a fourth alternative. Development of the Hells 

 Canyon Reach ^^ could be deferred until a combination of circum- 

 stances altered the prospects for development of the most efficient 

 plan. 



The FPC followed the third alternative, without requiring such 

 modification of the applicant's plan as to ensure the most efficient 

 scheme of development. The more efficient two-dam alternative 

 was dismissed from consideration by the Commission on the 

 grounds that it had not been "seriously proposed by any responsible 

 parties," and moreover was "substantially the same as the three-dam 

 plan with respect to economics, benefits, and public purposes." ^^ 

 The rationale underlying the FPC presiding examiner's decision 

 not to reserve the Hells Canyon Reach for federal development 

 under Section 7 (b) of the act involved a recognition that, in the 



*° Differences in financing costs under alternative approaches to development 

 will be discussed in Chapter VII in connection with a problem involving the 

 Willamette River Basin. 



^ Four other hydroelectric sites upstream, aggregating a much more modest 

 215,000 kilowatts, were available to Idaho Power Company (FPC, Staff Brief, 

 op. cit., p. 20). 



" FPC, Decision, op. cit.. Opinion No. 283, p. 3. 



