264 MULTIPLE PURPOSE RIVER DEVELOPMENT 



the nation; increased tax liabilities would exceed gains by approxi- 

 mately a third of a million. ^^ 



Under private development, we concluded that all of the costs 

 of the hydroelectric development would be borne by the power 

 consumers in the region. Moreover, since annual operating costs 

 under private development were the highest, there would be no 

 gains under private development over those attending development 

 by alternative approaches. In one particular, however, there would 

 be some income redistributive consequences under private develop- 

 ment which did not appear under public development. These 

 income transfers relate to the income redistribution attending 

 accelerated amortization under private development. While no 

 gains to the region by way of lower power rates would result from 

 use of rapid amortization, some gains would accrue to residents 

 of the region through their ownership of equity shares in the 

 private utility enterprise. On balance, annual gains to owners of 

 equity shares residing in Pacific Coast states would amount to 

 $32,600 in our example, exceeding slightly the increased tax burden 

 ($31,200) to the general taxpayers in the region. Accordingly, a 

 slight regional net income gain would result from this policy. Of 

 course, to the extent that the incidence of increased federal tax 

 liabilities is different from the distribution of the increased 

 dividend receipts among individuals in the region, there is an 

 intraregional income redistribution attending use of accelerated 

 amortization. 



" In both cases of treating the redistributive consequences under public 

 development, whether local or federal, we have purposely avoided treating the 

 income redistributive consequences associated with that part of the differences 

 in public and private annual operating costs which is associated with the 

 differences in money costs and annual depreciation accruals. For this reason, 

 as well as others previously noted, we cannot provide a perfectly balanced sys- 

 tem of costs and gains. Not only this reason, but also the fact that our illustra- 

 tive example will not be typical of every conceivable case of federal development 

 or partnership arrangement, suggest that the details of our results should not 

 be generalized to all cases. 



