7793

• UCREFRP Catalog Number: 7793
• Author: Douglas, A. J. and R. L. Johnson
• Title: Instream Flow Assessment and Economic Valuation
• USFW Year: 1993
• USFW - Doc Type: A Survey of Nonmarket Benefits Research
• Copyright Material: YES

INSTREAM FLOW

101

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Table I Columbia River fish run restoration costs covered by various benefits estimates using a 10%
discount rate to calculate present values

Type of cost of Costs covered by Costs covered by Costs covered by
Columbia River benefits benefits estimates of
fish run estimates estimates of extrapolated-
restoration of Olsen er at. modified-Olsen Loomis
ECPA costs No Yes Yes
ECPA costs + cost
of hatcheries No Maybe Yes

hydropower units are having their 50 year Federal permit licenses reviewed by
FERC for renewal during the early 199O's.42 The Electric Consumer Protection Act
of 1986 (ECPA) calls for FERC to balance nonmarket instream flow benefits and
hydropower output in the relicensing process.42 Since the passage of ECPA, FERC
has often asked hydropower installations to install fish screens and ladders and (or)
~nstitute flow release regimes from reservoirs that will aid anadromous fish migra-
tion.43 The costs of installing fish ladders, fish screens, and modifying reservoir
releases in the Columbia River basin are the "ECPA costs" listed in Table I. The
benefits estimates in Loomis et at. 7 certainly support the ECPA induced FERC
regulatory stance. Our calculations indicate that the estimated benefits in
Loomis et 01.7 for restoring the anadromous fish runs to just one California river
are greater than the gross revenues produced by the entire 1988 hydropower
output of California.44 Olsen et 01. 'S38 benefits estimates do not support costly
efforts to augment the Columbia River basin fish runs through the installation of
fish screens, upgrading and constructing of fish ladders, and altering reservoir
releases.
Bonneville Power Administration and the Northwest Power Planning Council are
beginning to estimate the costs of the Council's fish run restoration program. The
total social costs of potential fish run enhancing construction activities at all of the
hydropower installations including the cost of installing fish screens, upgrading fish
ladders, and installing downstream passageways could be as large as a billion dol-
lars.45 A modified reservoir release program is currently being used to facilitate
smoll outmigration. Estimates of the annual costs of altered hydropower output
for the current water release program on the Columbia and Snake Rivers-the
"water budget enhancement program"-are in the $70-to-$2oo million per annum
range.46.47 The present value of the hydropower related costs for current programs-
the costs for activities that FERC is calling for under ECPA-for restoring the runs
are $1.7-$3 billion with a 10% discount rate. Thus $1.7-$3 billion is the magnitude
of the present value of the ECPA costs of Table I. The discounted benefits estimates
in Olsen et 01.38 equal the ECPA costs only if the costs are in the low end of the
$1.7-$3 billion range.
There are other types of costs of enhancing the runs. For example, the US Army
Corps is in the midst of a hatchery construction program that began in the late 1960's.
The total cost of building the hatcheries will be hundreds of millions of dollars.48
Modified-Olsen covers the current hydropower related costs incurred. but may not
cover all of the pertinent costs of augmenting the runs. Extrapolated-Loomis
exceeds current estimates of the costs of restoring the anadromous fish runs,
including the hydropower related costs and the fish hatchery construction costs
(Table I).