An economic analysis conducted for a Seattle philanthropic organization concluded that the economic benefits of removing the four lower Snake River dams would far outweigh the costs.
ECONorthwest released its report--titled Lower Snake River Dams: Economic Tradeoffs of Removal--on July 29.
The report was prepared for Vulcan, which calls itself the "engine behind" late philanthropist and Microsoft cofounder Paul Allen's "network of organizations and initiatives."
Finding a total benefit of $8.65 billion, the report says, "The best available information to date indicates that substantial non-use and recreational use values gained from removal more than offset the costs of removal, even with increased power and transportation costs."
The benefit relies on nearly $11 billion in nonuse value along with a $1 billion boost to recreation through fishing and whitewater activities on the lower Snake River to offset $3.45 billion in economic costs that would come with removing the dams.
Costs include about $1 billion to remove the dams; $2.21 billion in added power costs and carbon emissions; and $170 million in new irrigation costs. The result is an $8.65 billion benefit to the region, according to the report.
The analysis uses what it calls "non-use value," an amount ratepayers in five Western states would be willing to pay to protect ecosystems, habitats and resources. It extends those benefits to more than 18 million households in Washington, Oregon, Idaho, Montana and California.
The report explains, "Previous literature has shown that non-use values are an important and potentially large component of the values that people derive from ecosystems. These values are generally defined and measured as a dollar amount that individuals are willing to pay to protect or enhance an environmental resource, regardless of whether they ever plan on visiting or directly utilizing that resource."
The report uses a survey conducted by Save Our Wild Salmon that determined people in the Northwest are willing to increase electricity bills by $39.89 per year to help protect wild salmon. "However, removal of the dams would be justified at any value over $8.44 per year," the analysis found.
Economic benefits from the dam removal come from the nonuse value of lowering the risks for threatened and endangered species, and increasing their available habitat, the report says. Since the dams already provide adult fish passage, fall Chinook--which could be delisted in the near future--are the only ESA-listed fish that spawn in the mainstem and would increase its spawning habitat by removing the dams, along with Pacific lamprey and white sturgeon.
It also notes that there are alternatives to achieving those goals that could be accomplished through other actions besides removing the dams. It notes that the Hells Canyon Complex and Dworshak Dam currently block all anadromous fish passage, beyond which substantial habitat exists. It says reductions in harvest would reduce mortality of adults returning to the Snake River.
The report does not conclude that fish recovery in the Snake River would be achieved by removing the dams. Instead, it notes, "When projecting changes to mortality and salmon population recovery levels there is extreme uncertainty due to the variety and magnitude of factors that contribute to overall populations, many of which change on a year to year basis." If the dams are removed, only some problems will be alleviated while others may be introduced, it says.
The report acknowledges the $1.8 billion investment made by the U.S. Army Corps of Engineers to fish passage in the Federal Columbia River Power System since 2001. "Recent upgrades include elevated flumes, pressurized bypass systems, new passive integrated transponder tag detection, augmented fish ladder flow, enlarged fish passage channels, a new emergency bypass structure and other upgrades," it says. Spillway weirs were also installed at all four dams to improve juvenile fish passage by raising the underwater passageway from 10 to 60 feet, it says.
It also points out that only 47.2 percent of yearling Chinook and 48.3 percent of juvenile steelhead survive the entire journey through eight dams from Lower Granite on the Snake River to Bonneville Dam on the Columbia.
The analysis describes changes in the ecosystem that are expected to improve conditions for fish and could reduce mortality of juveniles caused by turbines and gas bubble trauma by a total of 14 to 25 percent, along with unknown magnitudes of reduced mortality from predation, delayed migration and river temperatures.
However, juvenile mortality would also increase by removing the dams because all would migrate in-river instead of being transported, and because of added turbidity and sedimentation in the years immediately after dam removal. Limited reduction in adult mortality is expected from decreased predation at the dams, the report says.
The biggest cost, according to the report, would be to hydropower. The four dams generate about 1,024 aMW, or 12 percent of BPA's average energy, provide a total capacity of 3,033 MW and support a 500-kV grid from eastern Washington to western Montana.
The analysis uses last year's Energy Strategies study commissioned by Northwest Energy Coalition and concluded, "The grid services from the four dams could be replaced at a cost of $400 million to $1.2 billion per year depending on the resource mix and other assumptions. These costs represent an increase in the regional revenue requirement of 2 percent to 3 percent or a monthly bill increase for the average household of $1 to $2 per month."
The analysis comes up with a total of $2.95 billion in new costs for power generation. When added together, it notes, "The net present value of grid services is negative $3.98 billion, indicating a net cost. This includes both the private and public costs of outcomes, including the reduced expenditure on [lower Snake River dams] maintenance, increased cost of replacement power, and the cost of increased CO2 emissions."
The analysis uses information from the study, but instead of assuming power would be replaced by new sources, assumes that other generators--mostly in California--would increase output. That, the analysis says, "would cause an increase in carbon emission, the social costs of which must be accounted for."
With replacement power from California would increase carbon emissions from between 0.131 and 0.428 metric tons of carbon dioxide equivalent per megawatt hour, the report says. Using EPA's social cost of carbon, it values the added cost of carbon emissions at $1.45 billion.
The report also offsets increase from power costs with a $2.2 billion reduction in capital and operating costs that won't be spent if the dams are taken out.
In summary, the report says that if the dams are removed, BPA will pay less for operations and maintenance, capital replacement and overhead, and for fish mitigation. It will also lose revenue from the sale of power, and the value of capacity and flexibility.
If BPA replaces the dams with new generating assets, customers would pay more to cover the cost of the new generating facilities. If they're removed and the federal government pays to remove the dams, ratepayers will pay about the same, but the 9 million aMW would be replaced by sources that could include fossil fuel energy with higher carbon emissions.
The analysis also examines impacts to transportation and irrigation systems that the dams currently provide, as well as the new ecosystem services that would benefit.
It concludes by pushing for including nonuse values as part of an upcoming environmental impact statement for the Columbia River System Operations, a draft of which federal agencies expect to release in February.
"Based on our analysis, the ongoing EIS is likely to come to the same conclusion as the 2002 EIS" the report states. "If non-use values and resulting ecological benefits are ignored, then removal of the dams is not justified.
"However, it is clear now and was clear in 2002, that non-use values are the key to measuring true benefits of dam removal. These values are valid and must be considered, and overwhelmingly provide a justification for removing the Lower Snake River Dams."