Yakima River

   Washington State Chapter

Dam Economics - Washington State

U.S. Bureau of Reclamation’s proposed federal water projects:

costs to taxpayers and ratepayers.

See also:  - Economics of expanding the BuRec’s Columbia Basin Irrigation Project

Irrigators in the Yakima River Basin receiving water from Bureau of Reclamation water projects have still not paid off the bill for the existing infrastructure of dams and water conveyances because of the low cost of water delivery.  Federal and state taxpayers are now being asked to pay billions to build new irrigation dams.  

Because of past wasteful federal dam building projects, in 1983 the U.S. Water Resources Council, under the Reagan Administration, developed Principles and Guidelines (P&Gs) requiring a Benefit:Cost analysis (BCA).  For a federal water project to be built, benefits needs to exceed costs (that is, the BCA must be greater than 1.0).   As a result, the federal dam and water project building agencies have become adept at overestimating "benefits" and underestimating "costs," to try and achieve a BC ratio greater than 1.0.  And even when the BC ratio turns out to be lower than 1.0, Congress can always override and authorize projects that are losers to taxpayers.   

In the Water Resources Development Act of 2007, Congress instructed the Secretary of the Army to develop a new set of Principles and Guidelines for the U.S. Army Corps of Engineers (section 2031).  In an effort to modernize the approach to water resources development, the Obama Administration is expanding the scope of the Principles and Guidelines to cover all federal agencies that undertake water resource projects, not just the four agencies (i.e., U.S. Army Corps of Engineers, Bureau of Reclamation, Natural Resources Conservation Service and the Tennessee Valley Authority) which are subject to the current Principles and Guidelines. 

The President's Council on Environmental Quality has taken the lead on developing a new set of P&Gs.  However, in 2009, CEQ appointed Terry Breyman, a Corps official, to oversee the revisions.  Once adopted, each agency will develop its own “Implementation Guidance” to outline how the new Principles and Guidelines apply to their agency-specific missions.   One concern with the proposed P&G revisions is that "environmental benefits" unrelated to a proposed dam could be counted as "benefits."   In other words, if the Bureau of Reclamation is supposed to provide fish passage at existing dams in an area, they are seeking changes to allow them to build a new dam and then count fish passage constructed at other dams to help justify the new dam.   

In Washington State, an army of state and federal dam-planners -- funded by taxpayers -- spending tens of millions of dollars trying to get around the existing economic standards. 

Dam advocates -- including the U.S. Bureau of Reclamation and Washington State's Office of Columbia River -- have an incentive to warp economic assumptions.  Included in this strategy is assigning fish values to dams (the "Trojan Fish") that inflate benefits and allow transferring of federal water project costs from irrigators to taxpayers. 

C.E.Q.  Updated Principles and Guidelines for Water and Land Related Resources Implementation Studies.

National Research Council. Corps of Engineers Water Resources Infrastructure:  Deterioration, Investment, or Divestment?  October 2012.  (view NRC news release)

U.S. Bureau of Reclamation.  Four Accounts Analysis of the Yakima Integrated Water Plan. October 2012.

YRBWEP Work Group.  Four Accounts Analysis of the Integrated Plan (PowerPoint slides).  September 26, 2012.

YRBWEP Work Group.  Integrated Water Resource Management Plan:  Preliminary Cost Allocation. (PowerPoint slides).  September 26, 2012.

Green Scissors Report 2012.  June 26, 2012

U.S. BuRec.  Cost-Risk Analysis for the Black Rock and Wymer Dam and Reservoir Alternatives.  December 2008.

U.S. BuRec.  Economics Technical Report for the Yakima River Basin Water Storage Feasibility Study - Final Planning Report / Environmental Impact Statement.  December 2008.

U.S. BuRec.  Yakima River Basin Water Storage Feasibility Study.  December 2008.

U.S. BuRec.  Economics Technical Report for the Yakima River Basin.  January 2008.

U.S. BuRec.  Yakima River Basin Storage Study:  Wymer Dam and Reservoir Appraisal Report.  September 2007.