The Willamette River Case: Gains 255 



ect is located and the remainder of the nation.^^ Accordingly, in 

 considering the regional income redistributive consequences, we find 

 that the Pacific Coast region would share in the total opportunity 

 costs of the development and the cost of supporting federal public 

 services (through increased regional tax liabilities by both power 

 consumers and others in the region), to the extent of close to 70 

 per cent of the total, under either tax model. On the other hand, 

 we find that gains from lower power rates would be shared more 

 equally as between the Pacific Coast region and the remainder of 

 the nation. Even so, we must recognize that the federal develop- 

 ment of hydroelectric sites in the Northwest would result in a net 

 income redistribution in favor of the Pacific Northwest when suc- 

 cessive rounds of effects terminating with households, in each case, 

 are taken into account. In our illustration, estimated gains to 

 regional households as a result of the difference in annual power 

 bills between the federal and private power operations amounted 

 to approximately $654,000 (Table 55). To infer the net gain to the 

 region we must deduct the increase in federal tax liabilities of 

 regional residents (estimated at from $104,000 to $106,000 in 

 Tables 46 and 42, respectively, in Chapter VII); and if we take 

 account of shifts in local tax burdens, the increase in local tax 

 levies on sources other than power amounting to about $419,000 



"A comment is in order on the discrepancy between the total gains ($1,193,- 

 400), the locus of which we have identified consistent with our approach, and 

 the difference ($1,489300) between the annual operating cost of the federally 

 financed and operated hydroelectric feature as compared with its counterpart 

 undertaken as a private venture. The largest part ($131,600) of the total 

 discrepancy is accounted for by use of the difference between the operating costs 

 of an Ohio Valley thermal plant as an alternative to the federally developed 

 Northwest hydroelectric plant, rather than the private Northwest plant. The 

 next largest portion of the discrepancy ($127,700) is accounted for by the 

 deduction from the railways' share of the gains of the estimated marginal costs 

 associated with the increase in transportation services required for a Northwest 

 aluminum reduction mill over that required for an Ohio Valley Plant. Since 

 this portion defies allocation among co-operating factors, it was purposely 

 omitted from consideration. Finally, a smaller part of the total is accounted for 

 by the discrepancy between total BPA sales and the portion which could be 

 accounted for readily in Table 48. This discrepancy left approximately 3 per 

 cent of the total sales unaccounted for, and resulted in ommission of approxi- 

 mately $50,000 of the total difference in annual operating costs. A remaining 

 discrepancy, amounting to less than 1 per cent, can be explained by errors 

 caused by rounding. 



