The Willamette River Case: Gains 259 



TABLE 56. Regional Locus of Gains from Local Public Development 

 of Reimbursable Project Feature 



Pacific Other 



Coast regions 



From derived-demand uses: 



55 per cent before-tax returns to capital: 



After-tax rewards to venture capital $ 11,800 $106,300 



Reduction in general tax liabilities » 14,800 103,300 



12 per cent as labor's share 51,500 — 



33 per cent as consumers' share 94,300 47,200 



Total $172,400 $256,800 



From final-demand uses $672,000 — 



Regional locus of total gains $844,400 $256,800 



' Using weights derived from lax Model A. 



difference in power bills between the local public and private 

 operations of our illustration, about $844,000, or 77 per cent, would 

 accrue to the region. ^^ Since households in other regions would 

 experience gains approximately a quarter of a million, against 

 which increased federal tax liabilities exceeding $600,000 would 

 obtain, there would be a significant net income transfer to the 

 region accompanying local public development of the hydroelectric 

 resource. 2* 



" If the net regional gain is sought, however, it would be necessary to deduct 

 from this figure the increase in federal tax liabilities of regional residents 

 (estimated to be approximately $86,000 to $88,000 depending on the tax model 

 assumed) and the increase in local tax levies against sources other than power 

 (approximately $246,000 as indicated by data in Table 38). 



" Development of some of the larger hydroelectric sites — such as Priest 

 Rapids, Wanapum, Rocky Reach, and Wells — by local public bodies is likely to 

 have additional income redistributive consequences within the power systems. 

 This is likely to result from the competition which the federal system would 

 face when power from these developments becomes available. The local public 

 bodies could use part of the secondary energy to replace purchases from BPA 

 as well as attempt to sell part of the secondary to BPA's existing industrial 

 customers. As inducement, the utilities could offer the industrial customer an 

 additional block of firm power which BPA would not be in a position to do. 

 Such competition would be important to BPA and its customers, as secondary 

 power revenues average about 20 per cent of the total. Under federal develop- 

 ment, this competition would not exist. While these redistributive conse- 

 quences eventually may be significant, they are difficult to evaluate quantita- 

 tively, and thus we only note them in passing. 



