268 MULTIPLE PURPOSE RIVER DEVELOPMENT 



potential of the project must be small in relation to the intended 

 developer's electrical system or market. (2) If the proposed develop- 

 ment involves storage sites, the developer must be able to recover 

 the costs of providing the extra storage required to increase power 

 generation at downstream installations. (3) For maximum effi- 

 ciency, hydraulic and electrical integration must be achieved 

 through co-ordinated operation of the system of interrelated reser- 

 voir and generating units. Finally, (4) where opportunities exist 

 for economically justified nonmarketable project benefits, use of 

 public revenues to subsidize private undertakings would be required 

 to ensure efficient development as a private venture. These points 

 were all illustrated in our review of actual cases, salient points of 

 which are presented below. 



In the Hells Canyon case, one factor which posed obstacles to 

 efficient development was the enormous hydroelectric potential in 

 that reach of river relative to the size of market for any system 

 other than the federal electric system in the Pacific Northwest. The 

 Hells Canyon site, with the addition of approximately 900,000 kilo- 

 watts of prime power, would have about quadrupled the existing 

 capacity of the Idaho Power Company, although it would have 

 been only a fractional increment to the federal power system in 

 that region. A two-dam development would have provided a 

 greater economic return for a smaller total investment than the 

 three-dam plan which the Federal Power Commission licensed for 

 private development. However, the more efficient two-dam scheme 

 would have resulted in the addition of larger blocks of power than 

 from the three-dam proposal. This would have made it more 

 difficult for the private utility to absorb the increase in output at 

 a profit. 



The size of hydroelectric potential relative to the market did not 

 constitute a problem in the case of the Coosa River development. 

 Here the potential was less than half as great as in the Hells Can- 

 yon, and the Alabama Power Company system several times as 

 large as the Idaho Power Company system. Yet it is apparent that 

 because of the scale required to achieve efficiency in developing 

 some hydroelectric sites, each case must be analyzed in terms of 

 this consideration. In the Hells Canyon case, Idaho Power Com- 

 pany could not market its surplus power in the Northwest power 

 pool where the vast public power development has established 



