(e) Existing water and related land resources plans, 

 such as State water resources plans, are to be 

 considered as alternative plans if within the 

 scope of the planning effort. 



6. Plan Selection 



A plan recommending Federal action is to be the 

 alternative plan with the greatest net economic 

 benefit consistent with protecting the Nation's envi- 

 ronment (the NED plan), unless the Secretary of a 

 department or head of an independent agency 

 grants an exception to this rule. Exceptions may be 

 made when there are overriding reasons for recom- 

 mending another plan, based on other Federal, 

 State, local and international concerns. 



10. Risk and Uncertainty 



Planners shall identify areas of risk and uncer- 

 tainty in their analysis and describe them clearly, so 

 that decisions can be made with knowledge of the 

 degree of reliability of the estimated benefits and 

 costs and of the effectiveness of alternative plans. 



11. Cost Allocation 



For allocating total project financial costs among 

 the purposes served by a plan, separable costs will 

 be assigned to their respective purposes, and all 

 joint costs will be allocated to purposes for which 

 the plan was formulated. (Cost sharing policies for 

 water projects will be addressed separately.) 



7. Accounts 



Four accounts are established to facilitate evalu- 

 ation and display of effects of alternative plans. 

 The national economic development account is re- 

 quired. Other information that is required by law or 

 that will have a material bearing on the decision- 

 making process should be included in the other ac- 

 counts, or in some other appropriate format used to 

 organize information on effects. 



(a) The national economic development (NED) ac- 



count displays changes in the economic value 

 of the national output of goods and services. 



(b) The environmental quality (EQ) account displays 



nonmonetary effects on significant natural and 

 cultural resources. 



(c) The regional economic development (RED) ac- 



count registers changes in the distribution of 

 regional economic activity that result from each 

 alternative plan. Evaluations of regional effects 

 are to be carried out using nationally consistent 

 projections of income, employment, output, 

 and population. 



(d) The other social effects (OSE) account registers 



plan effects from perspectives that are relevant 

 to the planning process, but are not reflected 

 in the other three accounts. 



8. Discount Rate 



Discounting is to be used to convert future mone- 

 tary values to present values. 



9. Period of Analysis 



The penod of analysis to be be the same for 

 each alternative plan. 



12. Planning Guidelines 



In order to ensure consistency of Federal agency 

 planning necessary for purposes of budget and 

 policy decisions and to aid States and the public in 

 evaluation of project alternatives, the Water Re- 

 sources Council (WRC), in cooperation with the 

 Cabinet Council on Natural Resources and Environ- 

 ment, shall issue standards and procedures, in the 

 form of guidelines, implementing these Principles. 

 The head of each Federal agency subject to this 

 order will be responsible for consistent application 

 of the guidelines. An agency may propose agency 

 guidelines which differ from the guidelines issued 

 by WRC. Such agency guidelines and suggestions 

 for improvements in the WRC guidelines are to be 

 submitted to WRC for review and approval. The 

 WRC will fonward all agency proposed guidelines 

 which represent changes in established policy to 

 the Cabinet Council on Natural Resources and En- 

 vironment for its consideration. 



13. Effective Date 



These Pnnciples shall apply to implementation 

 studies completed more than 120 days after issu- 

 ance of the standards and procedures referenced 

 in Section 12, and concommitant repeal of 18 CFR, 

 Parts 711, 713, 714, and 716. 



These economic and environmental Principles 

 are hereby approved. 



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February 3, 1 983 



