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SUMMARY OF ISSUES 



The summaries presented in the following pages do not include references to the 

 sources from which necessary information was obtained. Appropriate references are 

 given in the appendices, which also present the issues in a more detailed manner. 



Economics 



This critique of the Corps' benefit cost analysis concludes that (1) additional 

 peaking capacity will be of little or no value for about seven years after the pro- 

 ject is scheduled to be operational (2) the deliberate omission of archeological costs 

 from the B/C analysis understates project costs (3) project benefits are overstated 

 because peaking capacity available without the project is counted as a benefit of the 

 project and (4) recreational losses due to the project were not adequately considered. 



Current standard procedures for estimating the benefits of additional generating 

 capacity require two separate evaluations. The first is to consult projected future 

 power demands to determine if the projected demands from the regional power pool ex- 

 ceed the projected regional capacity by the output of the proposed project. For pro- 

 jects in the Pacific Northwest, the Corps uses projections supplied by the Pacific 

 Northwest Utilities Conference Commission (P'lUCC), a group of public and investor- 

 owned utilities. If the first step in a project evaluation reveals that the projected 

 capacity falls short of the projected demand, then the second step, an evaluation 

 of alternative methods for meeting the projected demand, is performed. The purpose 

 of the second evaluation is to determine whether the proposed project will produce 

 power at a lower cost than the next best alternative. Since the economic benefits 

 of a project are defined as the costs avoided by building the proposed project, rather 

 than the next best alternative, any project that is cheaper than the next best alter- 

 native will have a benefit cost ratio greater than 1:1. 



The PNUCC projections of future power demand are described by the Bonneville 

 Power Administration (BPA) Role Environmental Impact Statement (1977) as follows: 



In the Pacific Northwest, where virtually all utilities are either 

 directly or indirectly interconnected with one another and with BPA 

 whose facilities are in turn connected with the two federal agencies 

 which own and operate the largest hydroelectric generating facilities 

 in the region, load-resource planning is done for the region as a 

 whole. Each year a forecast of the total loads of all the cooperating 

 utilities together is juxtaposed in tabular form with the current 

 schedule of existing, under construction, and planned generating re- 

 sources to determine the potential need for additional new generat- 

 ing facilities beyond those already planned. The load-resource tables 

 which extend 20 years into the future, are used to determine optimal 

 size of such additional generation, the time that would be required 

 to meet forecasted demands, whether the planned new facilities should 

 provide peaking capacity or energy (or both), the general location 

 of such new facilities, and whether they should be constructed and 

 owned by the Federal Government, by investor-owned utilities, or by 

 public agencies, or by some combination thereof. 



The PNUCC projections define a peaking surplus as the capacity (net resources) 

 available in the period of lowest recorded streamflow that is surplus to the highest 

 one hour load to occur during the year after both capacity and load projections have 

 been modified to allow for a substantial reserve margin. An average surplus is the 

 capacity available after adjustments for reserves in the period of lowest recorded 

 streamflow that is surplus to the capacity needed to produce the expected energy (kilo- 



