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on488 current retail firm power pri'..es." It is stated that this is "an over-estimate of the p ': esent wholesale value of project generated power, and probably an understatement of future values, due to the steeply ri;ing trend of energy costs." There appears to be a discrep,-'.ncy in pricing theory as applied to the value of hydroelectric production versus the value of agriculture, municipal and industrial water supplies. It would appear that the authors have .tried to anticipate an increase in the value of hydroelectric power production but not in the value of municipal, agricultural and industrial water supplies. The effect of this could be to place a greater value on hydroelectric projects than those projeots which produce municipal, agricultural and industrial water supplies. Project Investment or Construction Costs. We ooncur with the statement regarding the cost estimates presented in this report: "Such adjustments, while unavoidable, are questionable reliability when spanning more than a few years." We would hope that later on in the report a description of each project is complete enough to insure that the present project concept and the project concept on which the economic evaluation is based are the same. Some changes in concept have occurred on these projects over the years. The methodology used by the authors to evaluate economic benefits should be subject to close scrutiny by the Advisory Committee. We believe that the economic benefit evaluation is oversimplified and that further research should be done to consider alternatives to this method. There is particular concern about the problem of overstating or understating the value of either irrigation, municipal or industrial water supplies or the value of hydroelectric power, since we are comparing projects which offer in some cases only irrigation water and no hydroelectric power, or perhaps only municipal and industrial water supplies with hydroelectric power, and no irrigation water. Comparison of these projects would be invalid if the economic benefit analysis is not accurate within each sector for benefits and relatively among sectors. In addition, some assurance is needed regarding the project investment or construction costs, and just how valid these costs are, given the fact that they have been adjusted to 1980 price levels, in some cases over a period of 20 years or more. The degree of uncertainty associated with these price adjustments should be made known to the project Advisory Committee by comparing some upward adjustments with some revised recent cost estimates. On Page 55 it is stated, "net economic benefits are composed of market value outputs,..." The methods used do not appear to reflect market value outputs, but only the net income or net return resulting from market value outputs. The statement 4