206 MULTIPLE PURPOSE RIVER DEVELOPMENT 



of the identical physical plan contemplated in the Corps of Engi- 

 neers' comprehensive plan for the Willamette. In the area of reser- 

 voir operation or management, it would have required an operat- 

 ing plan consistent with maximizing economic, rather than only 

 financial, returns. In the physical aspects, therefore, the contem- 

 plated development would be the same as the fully integrated plan 

 of development and operation that was originally proposed under 

 federal auspices. The one modification consisted in permitting 

 those features associated with marketable services to be financed 

 by nonfederal enterprise units which could recoup their invest- 

 ments through sale of the marketable output. It therefore appears 

 that from an efficiency viewpoint results of development under 

 this proposal would be identical with development exclusively 

 by the federal government. The same quantity and quality of 

 resources would be committed, and the entire complement of facili- 

 ties would be managed in the same manner for maximizing eco- 

 nomic returns as if development and operation were integrated 

 under federal auspices. This result would hold on two assumptions: 

 In the practical situation, the need to accommodate any differing 

 points of view among co-operators would not compromise the 

 integrity of the comprehensive plan.^ The social cost of investment 

 funds would not differ for the sources tapped for investment pur- 

 poses under the two proposals. If it is assumed that any differences 

 which might exist would be small, this type of co-operative 

 arrangement would not seem to involve any changes in the level of 

 real costs and gains from the plan as initially proposed. 



While there would be no a priori bases for anticipating any 



* In some cases, of course, the proposed federal development and the non- 

 federal development would not necessarily be physically the same. Even in the 

 case of the Willamette River plants, where it has been proposed that the 

 government build the dams and nonfederal utilities supply the generators, there 

 might be different installations in the two cases. It has been brought to our 

 attention that the city of Eugene proposed to install more peaking capability 

 at Cougar Dam than the Corps of Engineers. The city, able to purchase at 

 least part of its requirements at Bonneville Power Administration kilowatt-year 

 rates, would find it economical to install additional peaking capacity at Cougar 

 Dam to meet its load, whereas the federal government might find it more eco- 

 nomical to install the peaking capacity at other sites in its system. Eugene 

 would not have as wide a range of possibilities as are open to the integrated 

 federal system. While this is doubtless true, the sacrifice of efficiency in this 

 case would be of a different order of magnitude from that treated in Chapter v. 



