The Willamette River Case: Gains 239 



industrial uses can be explained in terms of the enormous potential 

 of low-cost hydroelectricity in the region — and, consistent with this, 

 the rate of investment in its development. Thus, while preference 

 uses are granted priority, a rate of development which has appeared 

 justified in the past has provided for a growth in output sufficient 

 to meet all of the preference customers' requirements (37.5 per cent 

 of the increment added during fiscal year 1955); an almost equiva- 

 lent amount for the private utilities (34.4 per cent); and, in addi- 

 tion, more than a quarter of the total for federal defense and 

 defense-supporting private electro-process industries. 



Alternatively, if the development of the reimbursable feature 

 were undertaken by a municipality — and the average figures for 

 the distribution of municipalities' energy sales were used as an 

 indication — about 57 per cent of the project's output would end 

 up in final consumption whereas about 37 per cent would end up 

 as factor services in commercial and industrial operations. 



Finally, if we take the average for the private electric utilities' 

 distribution of power as between final demand and factor services, 

 more of the energy (51 per cent) would be sold to commercial and 

 industrial enterprises, and a smaller proportion (44 per cent) would 

 be sold to residential and domestic consumers. 



The above data present only statistical summaries of the prob- 

 able distribution of project output under alternative approaches 

 to undertaking the reimbursable project feature. For a more 

 meaningful picture of the distribution of gains, we must look to 

 the second and successive rounds of consequences. 



Successive Rounds of Effects Under Federal Development 



Consider first the distribution of output on the assumption that 

 the hypothetical site is developed under federal auspices. Pur- 

 chasers of federally developed power for resale in their own power 

 marketing operations will be treated first. 



GAINS FROM SALES BY PREFERENCE CUSTOMERS 



The savings from a supply of lower-priced federal power would 

 be passed on to customers by the municipalities, public utility dis- 

 tricts, and rural electric co-operatives. This follows, since the 



