ECONOMIC AND ENVIRONMENTAL

PRINCIPLES AND GUIDELINES

FOR WATER AND RELATED LAND RESOURCES

IMPLEMENTATION STUDIES

March 10, 1983
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iii

Foreword

These Economic and Environmental Principles In accordance with section 103 of the Water

and Guidelines for Water and Related Land Resources Planning Act, as amended (42 U.S.C.

Resources Implementation Studies have been 1962a-2), the Water Resources Council voted on

developed to guide the formulation and September 9, 1982, to repeal the existing

evaluation studies of the major Federal water Principles, Standards and Procedures(18 CFR,

resources development agencies. This Parts711, 713, 714, and 716) and to establish

document is the product of extensive work by these Principles and Guidelines. The President

experts from a variety of professions and was approved the Principles on February 3, 1983. In

developed with the help of hundreds of accordance with Executive Order 11747 (38 FR

comments from the public. It contains the best 30993, November 7, 1973), I hereby approve the

currently available methods for calculating the new Standards (Chapter I) and Procedures

benefits and costs of water resources (Chapters II and III).

development alternatives accurately and

consistently, and is intended to ensure proper

and consistent planning by the covered Federal

agencies. I am confident that these Principles

and Guidelines will enhance our ability to identify

and recommend to the Congress economically

and environmentally sound water project 

alternatives. 

<Signature of James G. Watt>

James G. Watt

Chairman

U.S. Water Resources Council 

 
iv

Economic and Environmental Principles for Water and

Related Land Resources Implementation Studies

These Principles are established pursuant to the 3. State and Local Concerns

Water Resources Planning Act of 1965 (Pub. L. 89-

80), as amended (42 U.S.C. 1962a-2 and d-1).

These Principles supersede the Principles established in connection with promulgation of principles,

standards and procedures at 18 CFR, Parts 711,

713, 714 and 716.

1. Purpose and Scope

These principles are intended to ensure proper

and consistent planning by Federal agencies in the

formulation and evaluation of water and related land

resources implementation studies.

Implementation studies of the following agency

activities are covered by these principles:

(a) Corps of Engineers (Civil Works) water

resources project plans; 4. International Concerns

(b) Bureau of Reclamation water resources project Federal water resources planning is to take into

plans; account international implications, including treaty

(c) Tennessee Valley Authority water resources

project plans;

(d) Soil Conservation Service water resources project plans.

Implementation studies are pre- or post authoriz- 5. Alternative Plans

ation project formulation or evaluation studies undertaken by Federal agencies.

2. Federal Objective

The Federal objective of water and related land

resources project planning is to contribute to national

economic development consistent with protecting the

Nation's environment, pursuant to national

environmental statutes, applicable executive orders,

and other Federal planning requirements.

(a) Water and related land resources project plans

shall be formulated to alleviate problems and

take advantage of opportunities in ways that

contribute to this objective.

(b) Contributions to national economic development

(NED) are increases in the net value of the national output of goods and services, expressed in

monetary units. Contributions to NED are the

direct net benefits that accrue in the planning

area and the rest of the Nation. Contributions to

NED include increases in the net value of those

goods and services that are marketed, and also

of those that may not be marketed.

Federal water resources planning is to be responsive to State and local concerns. Accordingly,

State and local participation is to be encouraged in all

aspects of water resources planning. Federal

agencies are to contact Governors or designated

State agencies for each affected State before initiating studies, and to provide appropriate opportunities

for State participation. It is recognized, however, that

water projects which are local, regional, statewide, or

even interstate in scope do not necessarily require a

major role for the Federal Government; non-Federal,

voluntary arrangements between affected

jurisdictions may often be adequate. States and

localities are free to initiate planning and

implementation of water projects.

obligations. Timely consultations with the relevant

foreign government should be undertaken when a

Federal water project is likely to have a significant

impact on any land or water resources within its

territorial boundaries.

Various alternative plans are to be formulated in

a systematic manner to ensure that all reasonable

alternatives are evaluated.

(a) A plan that reasonably maximizes net national

economic development benefits, consistent with

the Federal objective, is to be formulated. This

plan is to be identified as the NED plan.

(b) Other plans which reduce net NED benefits in

order to further address other Federal, State,

local, and international concerns not fully addressed by the NED plan should also be formulated.

(c) Plans may be formulated which require changes

in existing statutes, administrative regulations,

and established common law; such required

changes are to be identified.

(d) Each alternative plan is to be formulated in consideration of four criteria: completeness, effectiveness, efficiency, and acceptability. Appropriate mitigation of adverse effects is to be an integral part of each alternative plan.
v

(e) Existing water and related land resources plans, 10. Risk and Uncertainty

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 11. Cost Allocation

benefit consistent with protecting the Nation's environment (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 recommending

another plan, based on other Federal, State, local

and international concerns.

7. Accounts

Four accounts are established to facilitate evaluation and display of effects of alternative plans. The

national economic development account is required.

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 accounts, or

in some other appropriate format used to organize

information on effects.

(a) The national economic development (NED) ac- order will be responsible for consistent application of

count displays changes in the economic value of the guidelines. An agency may propose agency

the national output of goods and services. guidelines which differ from the guidelines issued by

(b) The environmental quality (EQ) account displays

non monetary effects on significant natural and

cultural resources.

(c) The regional economic development (RED) ac- which represent changes in established policy to the

count registers changes in the distribution of Cabinet Council on Natural Resources and Enregional economic activity that result from each vironment for its consideration.

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 monetary values to present values. Ronald Reagan>

9. Period of Analysis

The period of analysis to be the same for each February 3, 1983

alternative plan.

Planners shall identify areas of risk and uncertainty 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.

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.)

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 Resources Council (WRC), in cooperation with the

Cabinet Council on Natural Resources and Environment, shall issue standards and procedures, in the

form of guidelines, implementing these Principles.

The head of each Federal agency subject to this

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 forward all agency proposed guidelines

13. Effective Date

These Principles shall apply to implementation

studies completed more than 120 days after issuance

of the standards and procedures referenced in

Section 12, and concomitant repeal of 18 CFR, Parts

711, 713, 714, and 716.

These economic and environmental Principles are

hereby approved.

<Signature of the President of the United States,
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vii

Economic and Environmental Guidelines for Water and

Related Land Resources Implementation Studies

Chapter I - Standards

Section I - Introduction

1.1.1 Purpose and Scope

1.1.2 Authority

1.1.3 Applicability

Section II - The Federal Objective

Section III - Summary of the Planning

Process

1.3.1 Introduction

1.3.2 Major Steps

1.3.3 Specification of the problems and opportunities associated with

the Federal objective and specific State and local concerns.

1.3.4 Inventory and forecast of water and related land resources

conditions.

1.3.5. Formulation of alternative plans.

1.3.6 Evaluation of effects.

1.3.7 Comparison of alternative plans.

1.3.8 Plan selection.

Section IV—General Planning Considerations

1.4.1 Federal-State relationship in planning.

1.4.2 International consultations.

1.4.3 General public participation

1.4.4 Review and consultation.

1.4.5 Interdisciplinary planning.

1.4.6 Agency decision making.

1.4.7 Planning area.

1.4.8 Scoping.

1.4.9 Forecasting.

1.4.10 Prices.

1.4.11 Discount rate.

1.4.12 Period of analysis.

1.4.13 Risk and uncertainty-sensitivity analysis.

1.4.14 Documentation.

Section V—Inventory and Forecast of

Conditions Without a Plan

1.5.1 Resource conditions.

1.5.2 Problems and opportunities.

Section VI—Alternative Plans

1.6.1 General.

1.6.2 Formulation.

1.6.3 The NED plan.

1.6.4 Other alternative plans.

Section VII—Accounts

1.7.1 General.

1.7.2 National economic development account.

1.7.3 Environmental quality account.

1.7.4 Regional economic development account.

1.7.5 Other social effects account.

Section VIII—Displays

1.8.1 General.

1.8.2 Content and format.

Section IX—Cost Allocation

1.9.1 General

1.9.2 Definitions.

1.9.3 Cost allocation standard.

1.9.4 Allocation of constituent cost

Section X—Plan Selection

1.10.1 General.

1.10.2 Selection.

Supplement I—Risk and Uncertainty

S1 Concepts.

S2 Application.

S3 Report and display.

Chapter II—National Economic

Development (NED) Benefit

Evaluation Procedures

Section I—General

2.1.1 Purpose.

2.1.2 Conceptual basis.

2.1.3 Calculating net NED benefits in average annual equivalent

terms.

2.1.4 Definitions

Section II—NED Benefit Evaluation

Procedure—Municipal and Industrial (M&I) Water

Supply

2.2.1 Introduction.

2.2.2 Conceptual basis.

2.2.3 Planning setting.

2.2.4 Evaluation procedure: General.

2.2.5 Evaluation procedure: Identify study area.

2.2.6 Evaluation procedure: Estimate future M&I 

 water supplies.
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2.2.7 Evaluation procedure: Project future M&I water 2.5.8 Evaluation procedure: Compute benefits.

 use. 2.5.9 Evaluation procedure: Data sources.

2.2.8 Evaluation procedure: Identify the deficit 2.5.10 Alternative Procedure: Financial Evaluation.

 between future water supplies and use. 2.5.11 Report and display procedures.

2.2.9 Evaluation procedure: Rank and display the alternative plans

based on least cost analysis.

2.2.11 Evaluation procedure: Identify the most likely alternative.

2.2.12 Evaluation procedure: Problems in application.

2.2.13 Evaluation procedure: Problems in application.

2.2.14 Report and display procedures.

Section III—NED Benefit Evaluation

Procedures: Agriculture

2.3.1 Introduction.

2.3.2 Conceptual basis.

2.3.3 Evaluation components.

2.3.4 Planning setting.

2.3.5 Evaluation procedure: Crops.

2.3.6 Evaluation procedure: Damage reduction for other agricultural

properties and associated agricultural enterprises.

2.3.7 Evaluation procedure: Off-site sediment reduction.

2.3.8 Evaluation procedure: Problems in application.

2.3.9 Evaluation procedure: Data sources

2.3.10 Report and display procedures.

Section IV—NED Benefit Evaluation

Procedures: Urban Flood Damage

2.4.1 Introduction

2.4.2 Conceptual basis.

2.4.3 Planning setting.

2.4.4 Evaluation procedure: General.

2.4.5 Evaluation procedure: Step 1—delineate affected 

 area.

2.4.6 Evaluation procedure: Step 2—determine floodplain

characteristics.

2.4.7 Evaluation procedure: Step 3—project activities in affected

area.

2.4.8 Evaluation procedure: Step 4—estimate potential land use.

2.4.9 Evaluation procedure: Step 5—project land use.

2.4.10 Evaluation procedure: Step 6—determine existing flood

damages.

2.4.11 Evaluation procedure: Step 7—project future flood damages.

2.4.12 Evaluation procedure: Step 8—determine other costs of using

floodplain.

2.4.13 Evaluation procedure: Step 9—collect land market value and

related data.

2.4.14 Evaluation procedure: Step 10—compute NED benefits.

2.4.15 Evaluation procedure: Problems in application.

2.4.16 Evaluation procedure: Data sources.

2.4.17 Report and display procedures.

Section V—NED Benefit Evaluation

Procedures: Power (Hydropower)

2.5.1 Introduction.

2.5.2 Conceptual basis.

2.5.3 Planning setting.

2.5.4 Evaluation procedure: General.

2.5.5 Evaluation procedure: Identify system for analysis.

2.5.6 Evaluation procedure: Determine need for future generation.

2.5.7 Evaluation procedure: Determine most likely non-Federal

alternative.

Section VI—NED Benefit Evaluation

Procedures: Transportation (Inland

Navigation)

2.6.1 Introduction.

2.6.2 Conceptual basis.

2.6.3 Planning setting.

2.6.4 Evaluation procedure: General.

2.6.5 Evaluation procedure: Step 1—identify the commodity types.

2.6.6 Evaluation procedure: Step 2-identify the study area.

2.6.7 Evaluation procedure: Step 3—determine current commodity

flow.

2.6.8 Evaluation procedure: Step 4—determine current costs of

waterway use.

2.6.9 Evaluation procedure: Step 5—determine current cost of

alternative movement.

2.6.10 Evaluation procedure: Step 6—forecast potential waterway

traffic by commodity.

2.6.11 Evaluation procedure: Step 7—determine future cost of

alternative modes.

2.6.12 Evaluation procedure: Step 8—determine future costs of

waterway use.

2.6.13 Evaluation procedure: Step 9—determine waterway use, with

and without project.

2.6.14 Evaluation procedure: Step 10—compute NED benefits.

2.6.15 Evaluation procedure: Problems in application.

2.6.16 Report and display procedures.

Section VII—NED Benefit Evaluation 

Procedures: Transportation (Deep-Draft

Navigation)

2.7.1 Introduction.

2.7.2 Conceptual basis.

2.7.3 Planning setting.

2.7.4 Evaluation procedures.

2.7.5 Problems in application.

2.7.6 Report and display procedures.

Section VIII—NED Benefit Evaluation 

Procedures: Recreation

2.8.1 Introduction.

2.8.2 Conceptual basis.

2.8.3 Planning setting.

2.8.4 Evaluation procedure: General.

2.8.5 Evaluation procedure: Define the study area.

2.8.6 Evaluation procedure: Estimate recreation resource.

2.8.7 Evaluation procedure: Forecast potential recreation use in the

study area.

2.8.8 Evaluation procedure: Determine the without-project condition.

2.8.9 Evaluation procedure: Forecast recreation use with project.

2.8.10 Evaluation procedure: Estimate value of use with the project.

2.8.11 Evaluation procedure: Forecast recreation use diminished with

the project.

2.8.12 Evaluation procedure: Estimate value of recreation use

diminished with the project.

2.8.13 Evaluation procedure: Compute net project benefits.
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2.8.14 Report and display procedures. 2.12.8 Evaluation procedure: Problems in application.

Appendix 1—Travel Cost Method 2.12.9 Evaluation procedure: Data sources.

Appendix 2—Contingent Valuation (Survey) Methods 2.12.10 Report and display procedures.

Appendix 3—Unit Day Value Method

Section IX—NED Benefit Evaluation Procedure:

Commercial Fishing

2.9.1 Introduction.

2.9.2 Conceptual basis.

2.9.3 Planning setting.

2.9.4 Evaluation procedure: General.

2.9.5 Evaluation procedure: Identify the affected areas.

2.9.6 Evaluation procedure: Determine the without-project

condition.

2.9.7 Evaluation procedure: Determine conditions that would

exist with an alternative plan.

2.9.8 Evaluation procedure: Estimate NED benefits.

2.9.9 Problems in application.

2.9.10 Data sources.

2.9.11 Report and display procedures.

Section X—NED Benefit Evaluation Procedure:

Other Direct Benefits

2.10.1 Introduction.

2.10.2 Conceptual basis.

2.10.3 Planning setting.

2.10.4 Evaluation procedure: General

2.10.5 Evaluation procedure: Problems in application.

2.10.6 Evaluation procedure: Data sources.

2.10.7 Evaluation procedure: Risk and uncertainty.

2.10.8 Report and display procedures.

Section XI—NED Benefit Evaluation Procedures:

Unemployed or Underemployed Labor

Resources

2.11.1 Introduction.

2.11.2 Conceptual basis.

2.11.3 Planning setting.

2.11.4 Evaluation procedure.

2.11.5 Report and display procedures.

Appendix 1—Occupational Tables

Section XII—National Economic Development

(NED) Cost Evaluation Procedures.

2.12.1 Introduction.

2.12.2 Conceptual basis.

2.12.3 Planning setting.

2.12.4 Evaluation procedure: General

2.12.5 Evaluation procedure: Implementation outlays

2.12.6 Evaluation procedure: Associated costs

2.12.7 Evaluation procedure: Other direct costs.

Chapter III—Environmental Quality (EQ)

Evaluation Procedures

Section I—Introduction

3.1.1 Purpose

3.1.2 Limitations

Section II—Definitions

3.2.1 Definitions

3.2.2 References for terms

3.2.3 Abbreviations and acronyms

Section III—General Evaluation Requirements

3.3.1 Interdisciplinary planning.

3.3.2 Public involvement.

3.3.3 Integration of other review, coordination, and consultation

requirements.

3.3.4 Documentation.

3.3.5 Performance objectives.

Section IV—EQ Evaluation Process

3.4.1 Orientation

3.4.2 Define resources phase.

3.4.3 Identify resources activity.

3.4.4 Develop evaluation framework activity.

3.4.5 Inventory resources phase.

3.4.6 Survey existing conditions activity.

3.4.7 Forecast without-plans conditions activity.

3.4.8 Forecast with-plan conditions activity.

3.4.9 Assess effects phase.

3.4.10 Identify effects activity.

3.4.11 Describe effects activity.

3.4.12 Determine significant effects activity.

3.4.13 Appraise effects phase.

3.4.14 Appraise significant effects activity.

3.4.15 Judge net EQ effects activity.

Appendix A—Example Documentation 

Formats

Appendix B—Relationships Between NEPA

Requirements for EIS Contents and the

requirements of these procedures.
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CHAPTER I — STANDARDS

Section I — Introduction

1.1.1 Purpose and Scope.

(a) These Guidelines establish standards and

procedures for use by Federal agencies in formulating and evaluating alternative plans for water and

related land resources implementation studies.

These Guidelines implement the Principles for Water

and Related Land Resources Implementation

Studies.

(b) These Guidelines are for Federal administrative

purposes and shall not create any substantive or

procedural rights in private parties.

(c) Departures in an individual study from these

Guidelines are to be documented and justified in the

study report.

(d) Implementation studies are pre- or postauthorization project formulation or evaluation studies

undertaken by a Federal agency. Studies for the

following agency activities are covered:

(1) Corps of Engineers (Civil Works) water resources project plans.

(2) Bureau of Reclamation water resources project

plans.

(3) Tennessee Valley Authority water resources

project plans.

(4) Soil Conservation Service water resources

project plans.

(e) These Guidelines establish the basic process

for Federal agencies in carrying out implementation

studies. Activities conducted pursuant to the requirements of the National Environmental Policy Act

of 1969 (NEPA) (42 U.S.C. 4321, et. seq.) are to be

fully integrated with this process.

(f) The accounts described in these Guidelines

encompass and are consistent with the concept of

human environment as used in NEPA and the appropriate portions of the NEPA regulations established by the Council on Environmental Quality

(CEQ) in 40 CFR Parts 1500-1508.

1.1.2 Authority.

These Guidelines are established pursuant to

Section 103 of the Water Resources Planning Act

(Pub. L. 89-80) and Executive Order 11747.

1.1.3 Applicability.

(a) These Guidelines apply to implementation

studies completed more than 120 days after issuance of the Guidelines. Studies completed within 120

days should be concluded in accordance with the

guidance applicable to them prior to issuance of

these Guidelines.

(b) Preauthorization or postauthorization studies

are considered completed when the appropriate

planning documents have been approved by the responsible agency's field office.

(c) In the case of reevaluation studies in which

there is no reformulation of the plan, the portions of

this chapter dealing with plan formulation do not

apply.

(d) The administrator of each Federal or Federally

assisted program covered is responsible for applying

these Guidelines.

Section II —The Federal Objective.

(a) The Federal objective of water and related land

resources planning is to contribute to national

economic development consistent with protecting the

Nation's environment, pursuant to national environmental statutes, applicable executive orders, and

other Federal planning requirements.

(b) Contributions to national economic development (NED) are increases in the net value of the

national output of goods and services, expressed in

monetary units. Contributions to NED are the direct

net benefits that accrue in the planning area and the

rest of the nation. Contributions to NED include

increases in the net value of those goods and services that are marketed, and also of those that may

not be marketed.

(c)The Federal objective for the relevant planning

setting should be stated in terms of an expressed

desire to alleviate problems and realize opportunities

related to the output of goods and services or to

increased economic efficiency.

(d) Each statement of a problem or opportunity

should be expressed in terms of a desired output.

Example statements are—

(1) Reduce flood losses in the Red River floodplain

to increase agriculture production;

(2) Reduce the cost of agricultural production in

the irrigated sector of Tolland County; and
2

(3) Increase the value of the recreational experience 1.3.3 Specification of the Problems and

at Lake Zoar. Opportunities Associated With the Federal

Section III — Summary of the Planning

 Process

1.3.1 Introduction.

The planning process consists of a series of steps

that identifies or responds to problems and

opportunities associated with the Federal objective and

specific State and local concerns, and culminates in

the selection of a recommended plan. The process

involves an orderly and systematic approach to making

determinations and decisions at each step so that the

interested public and decisionmakers in the planning

organization can be fully aware of: the basic

assumptions employed; the data and information

analyzed; the areas of risk and uncertainty; the

reasons and rationales used; and the significant

implications of each alternative plan.

1.3.2 Major Steps.

(a) The planning process consists of the following

major steps:

(1) Specification of the water and related land resources problems and opportunities (relevant to the

planning setting) associated with the Federal objective

and specific State and local concerns.

(2) Inventory, forecast, and analysis of water and

related land resource conditions within the planning

area relevant to the identified problems and opportunities.

(3) Formulation of alternative plans.

(4) Evaluation of the effects of the alternative plans.

(5) Comparison of alternative plans.

(6) Selection of a recommended plan based upon

the comparison of alternative plans.

(b) Plan formulation is a dynamic process with

various steps that should be iterated one or more

times. This iteration process, which may occur at any

step, may sharpen the planning focus or change its

emphasis as new data are obtained or as the

specification of problems or opportunities changes or

becomes more clearly defined.

Objective and Specific State and Local Concerns.

(a) The desire to alleviate problems and realize

opportunities should be specified for the planning area in

terms of the Federal objective and specific State and

local concerns. The problems and opportunities should

be defined so that their definition does not dictate a

narrow range of alternatives.

(b) The problems and opportunities should be defined

in such a way that meaningful levels of achievement can

be identified. This will facilitate the formulation of

alternative plans in cases in which there may be financial,

environmental, technical, legislative, or administrative

constraints on the total alleviation of a problem or

realization of an opportunity.

(c) The problems and opportunities should be stated

for both current and future conditions. Desired conditions

for the future should be explicitly stated.

(d) The problems and opportunities should reflect the

specific effects that are desired by groups and individuals

as well as the problems and opportunities declared to be

in the national interest by the Congress or the Executive

Branch. This identification and detailing of problems and

opportunities is the process of making explicit the range

of preferences and desires of those affected by resource

development. It should be understood that the initial

expressions of problems and opportunities may be

modified during the planning process.

1.3.4 Inventory and Forecast of Water and

Related Land Resource Conditions.

The potential for alleviating problems and realizing

opportunities is determined during inventorying and

forecasting. The inventory and forecast of resource

conditions should be related to the problems and

opportunities previously identified.

1.3.5 Formulation of Alternative Plans.

Alternative plans are to be formulated in a systematic

manner to insure that all reasonable alternatives are

evaluated. Usually, a number of alternative plans are

identified early in the planning process and become

more refined through additional development and

through subsequent iterations. Additional alternative

plans may be introduced at any time.
3

1.3.6 Evaluation of Effects. defining the problems and opportunities, in

(a) General. The evaluation of the effects of each

alternative plan consists of assessment and appraisal.

(b) Assessment. Assessment is the process of

measuring or estimating the effects of an alternative

plan. Assessment determines the difference

between without-plan and with-plan conditions for

each of the categories of effects.

(c) Appraisal.

(1) Appraisal is the process of assigning social

values to the technical information gathered as part

of the assessment process.

(2) Since technical data concerning benefits and

costs in the NED account are expressed in monetary units, the NED account already contains a

weighting of effects; therefore, appraisal is applicable only to the EQ, RED, and OSE evaluations.

(d) Displays. The results of the evaluation should

be displayed according to the directions provided in

Section Vlll—Displays.

1.3.7 Comparison of Alternative Plans.

(a) The comparison of plans focuses on the differences among the alternative plans as determined in the evaluation phase.

(b) The differences should be organized on the

basis of the effects in the four accounts or on a

combination of the NED account and another appropriate format for other significant effects.

1.3.8 Plan Selection.

After consideration of the various alternative

plans, their effects, and public comments, a plan is

selected following the general guidance in Section

X—Plan Selection.

Section IV—General Planning 

Considerations

1.4.1 Federal-State Relationship in Planning.

(a) The responsible Federal planning agency is to

contact the Governor or designated agency for

each affected State before initiating a study and

enter into such agreements as are appropriate to

carry out a coordinated planning effort.

(b) The State agency or agencies responsible for

or concerned with water planning are to be provided

with appropriate opportunities to participate in

scoping the study, and in review and consultation.

1.4.2 International Consultations.

When a Federal water project is likely to have a

significant impact on any land or resources

situated in a foreign country or to affect treaty

obligations, the responsible Federal planning

agency, through the Department of State, should

enter into consultations with the government of

the affected country, with a view to determining

the international implications of the project under

consideration.

1.4.3 General Public Participation.

(a) Interested and affected agencies, groups,

and individuals should be provided opportunities

to participate throughout the planning process.

The responsible Federal planning agency should

contact and solicit participation of: other Federal

agencies; appropriate regional, State, and local

agencies; national, regional and local groups;

other appropriate groups such as affected Indian

tribes; and individuals. A coordinated public

participation program should be established with

willing agencies and groups.

(b) Efforts to secure public participation should

be pursued through appropriate means such as

public hearings, public meetings, workshops,

information programs, and citizen committees.

1.4.4 Review and Consultation.

Review and consultation with interested and affected agencies, groups, and individuals are

needed in the planning process. Reviews are to

be consistent with the requirements of applicable

Federal statutes and the CEQ NEPA regulations

(40 CFR Parts 1500-1508). The planning process

described in these Guidelines and the CEQ and

NEPA regulations are complementary.

1.4.5 Interdisciplinary Planning.

An interdisciplinary approach should be used in

planning to ensure the integrated use of the

natural and social sciences and the

environmental design arts. The disciplines of the

planners should be appropriate to the issues

identified in the scoping process. The planning

agency should supplement its available expertise,

as necessary, with knowledgeable experts from

cooperating agencies, universities, consultants,

etc.
4

1.4.6 Agency Decisionmaking. (2) Define the planning area based on the probDecisionmaking is a dynamic process that leads

to selection of a recommended plan. Decision

making begins at the field level and occurs at

differentlevels through subsequent reviews and

approvals as required by the agency until it reaches

the level having authority to approve the project

(final level). The individual in the responsible

planning agency making the decisions at each level

is referred to as the “agency decisionmaker.” The

identity of the agency decisionmaker depends upon

the level of project development and review. For

projects requiring congressional authorization, the

final agency decisionmaker is the Secretary of the

Department or head of the independent agency.

For projects that do not require congressional

approval, the final decisionmaker is the Secretary of

the Department, head of the agency, or such other

official as appropriately delegated.

1.4.7 Planning Area.

The planning area is a geographic space with an

identified boundary that includes:

(a) The area identified in the study's authorizing that meaningful and efficient analysis and choice

document; among alternative plans can occur.

(b) The locations of alternative plans, often called (d) Scoping should include consideration of

“project areas”; and ground water problems and opportunities,

(c) The locations of resources that would be directly, indirectly, or cumulatively affected by alternative plans, often called the “affected area.”

1.4.8 Scoping.

(a) Planning should include an early and open

process termed "scoping" to identify both the likely

significant issues to be addressed and the range of

those issues. This process is complementary with

the scoping process described in the CEQ NEPA

regulations (40 CFR Parts 1500-1508). The agency

should begin scoping as soon as practicable after a

decision to begin planning. The scoping process

should include affected Federal, State, and local

agencies and other interested groups or persons.

Scoping should be used as appropriate throughout

planning to ensure that all significant -

decisionmaking factors are addressed and that

unneeded and extraneous studies are not

undertaken.

(b) As part of the scoping process, the agency

should:

(1) Determine the extent to which the likely significant issues will be analyzed.

lems and opportunities and the geographic areas

likely to be affected by alternative plans.

(3) Identify and eliminate from detailed study

any issues that are not significant or that have

been adequately covered by prior study.

However, important issues, even though covered

by other studies, should still be considered in the

analysis.

(4) Identify any current or future planning that is

related to but not part of the study under

consideration.

(5) Identify review and consultation

requirements so that cooperating agencies (as

defined in 40 CFR 1508.5) may prepare required

analyses and studies concurrently with the study

under consideration.

(6) Indicate the tentative planning and decisionmaking schedule.

(7) The scoping process should be integrated

with other early planning activities.

(c) Scoping may be used to combine or narrow

the number of problems and opportunities, measures, plans, effects, etc., under consideration so

including conjunctive use of ground and surface

water, and in stream flow problems. Appropriate

consideration should be given to existing water

rights in scoping the planning effort.

1.4.9 Forecasting.

(a) Formulation and evaluation of alternative

plans should be based on the most likely

conditions expected to exist in the future with and

without the plan. The without-plan condition is the

condition expected to prevail if no action is taken.

The with-plan condition is the condition expected

to prevail with the particular plan under

consideration.

(b) The forecasts of with- and without-plan

conditions should use the inventory of existing

conditions as the baseline, and should be based

on consideration of the following (including direct,

indirect, and cumulative effects)—

(1) National regional projections of income, employment, output, and population prepared and

published by the Department of Commerce.

(2) Other aggregate projections such as

exports, land use trends, and amounts of goods

and services likely to be demanded;

(3) Expected environmental conditions; and
5

(4) Specific, authoritative projections for small present values using the discount rate established

areas. annually for the formulation and economic

Appropriate national and regional projections

should be used as an underlying forecasting

framework, and inconsistencies therewith, while

permissible, should be documented and justified.

(c) National projections used in planning are to

be based on a full employment economy. In this

context, assumption of a full employment

economy establishes a rationale for general use of

market prices in estimating economic benefits and

costs, but does not preclude consideration of

special analyses of regions with high rates of

unemployment and underemployment in

calculating benefits from using unemployed and

underemployed labor resources.

(d) National and State environmental and health

standards and regulations should be recognized

and appropriately considered in scoping the planning effort. Standards and regulations concerning

water quality, air quality, public health, wetlands

protection, and floodplain management should be

given specific consideration in forecasting the withand without-plan condition.

(e) Other plans that have been adopted for the

planning area and other current planning efforts

should be considered.

(f) Forecasts should be made for selected years

over the period of analysis to indicate how changes

in economic and other conditions are likely to have

an impact on problems and opportunities.

1.4.10 Prices.

(a) The prices of goods and services used for

evaluation should reflect the real exchange values

expected to prevail over the period of analysis. For

this purpose, relative price relationships of outputs

and inputs prevailing during, or immediately

preceding, the period of planning generally

represent the real price relationships expected

over the life of the plan, unless specific

considerations indicate real exchange values are

expected to change.

(b) The general level of prices for outputs and

inputs prevailing during or immediately preceding

the period of planning is to be used for the entire

period of analysis. In the case of agricultural planning, normalized prices prepared by the Department of Agriculture should be used.

1.4.11 Discount Rate.

Discounting is to be used to convert future

monetary values to present values. Calculate

evaluation of plans for water and related land

resources plans.

1.4.12 Period of Analysis.

(a) The period of analysis is to be the same for

each alternative plan. The period of analysis is to

be the time required for implementation plus the

lesser of—

(1) The period of time over which any alternative

plan would have significant beneficial or adverse

effects; or

(2) A period not to exceed 100 years.

(b) Appropriate consideration should be given to

environmental factors that may extend beyond the

period of analysis.

1.4.13 Risk and Uncertainty—

Sensitivity Analysis.

(a) Plans and their effects should be examined

to determine the uncertainty inherent in the data or

various assumptions of future economic, demographic, social, attitudinal, environmental, and

technological trends. A limited number of

reasonable alternative forecasts that would, if

realized, appreciably affect plan design should be

considered.

(b) The planner's primary role in dealing with risk

and uncertainty is to identify the areas of sensitivity

and describe them clearly so that decisions can be

made with knowledge of the degree of reliability of

available information.

(c) Situations of risk are detained as those in

which the potential outcomes can be described in

reasonably well-known probability distributions

such as the probability of particular flood events.

Situations of uncertainty are defined as those in

which potential outcomes cannot be described in

objectively known probability distributions.

(d) Risk and uncertainty arise from

measurement errors and from the underlying

variability of complex natural, social. and economic

situations. Methods of dealing with risk and

uncertainty include:

(1) Collecting more detailed data to reduce measurement error.

(2) Using more refined analytic techniques.

(3) Increasing safety factors in design.

(4) Selecting measures with better known performance characteristics.
6

(5) Reducing the irreversible or irretrievable (b)Based on this analysis, an appraisal should

commitments of resources. be made of the potential for alleviating the prob-

(6) Performing a sensitivity analysis of the estimated benefits and costs of alternative plans.

(e) Reducing risk and uncertainty may involve increased costs or loss of benefits. The advantages

and costs of reducing risk and uncertainty should

be considered in the planning process. Additional

information on risk and uncertainty can be found in

Supplement I to this chapter.

1.4.14 Documentation.

Planning studies are to be documented in a

clear, concise manner that explains the basic assumptions and decisions that were made and the

reasons for them. The documentation should be

prepared in a manner to expedite review and -

decisionmaking.

Section V — Inventory and

Forecast of Conditions Without a

Plan

1.5.1 Resource Conditions.

(a) An inventory should be made to determine

the quantity and quality of water and related land

resources of the planning area and to identify opportunities for protection and enhancement of

those resources. The inventory should include

data appropriate to the identified problems and

opportunities, as determined by scoping, and the

potential for formulating and evaluating alternative

plans. The inventory does not necessarily include

an exhaustive listing of resources of the area. This

inventory should describe the existing conditions

and should be the baseline for forecasting withand without-plan conditions.

(b) The most likely future condition without a

plan should be used for evaluating the effects of

alternative plans.

1.5.2 Problems and Opportunities.

(a) Inventory and forecasting should include an

analysis of the identified problems and Opportunities and their implications for the planning setting.

Resource inventories should be limited to

resources affecting the problems and opportunities

or likely to be affected by the alternative plans. As

alternative plans are developed or refined, the

adequacy of these resource inventories should be

reassessed. This analysis should be used to

redefine the specific problems and opportunities

associated with the Federal objective and other

State and local concerns.

lems and realizing the opportunities. The appraisal

provides guidance on the possible scope and

magnitude of actions needed to address each

problem or opportunity. This appraisal should

identify possibilities for management,

development, preservation, and other opportunities

for action. Resource inventories and forecasts may

suggest additional problems or opportunities.

These possibilities will indicate the resource

capabilities relative to specific commodities,

services, or environmental amenities desired by

the public. By proper selection of these

development or management possibilities, alternatives may be formulated for each problem or

opportunity.

Section Vl — Alternative Plans

1.6.1 General.

(a) An alternative plan consists of a system of

structural and/or nonstructural measures, strategies, or programs formulated to alleviate specific

problems or take advantage of specific opportunities associated with water and related land resources in the planning area.

(b) Alternative plans should be significantly

differentiated from each other.

(c) Alternative plans should not be limited to

those the Federal planning agency could

implement directly under current authorities. Plans

that could be implemented under the authorities of

other Federal agencies, State and local entities,

and nongo-vernment interests should also be

considered.

(d) Alternative plans may either—

(1) Be in compliance with existing statutes, administrative regulations, and established common

law; or

(2) Propose necessary changes in such statutes,

regulations, or common law.

(e) A range of measures that can, over time, balance water demand for various purposes with

water availability should be considered, including

measures that will—

(1) Reduce the demand for water;

(2) Improve efficiency in use and reduce losses

 and waste;

(3) Improve land management practices to con

 serve water; and/or

(4) Increase the available supply of water.
7

(f) Nonstructural measures should be formulated in order to allow the decisionmaker the

considered as means for addressing problems opportunity to judge whether these beneficial

and opportunities. effects outweigh the corresponding NED losses.

(1) Nonstructural measures are complete or (b) In general, in the formulation of alternative

partial alternatives to traditional structural plans, an effort is made to include only increments

measures. Nonstructural measures include that provide net NED benefits after accounting for

modifications in public policy, management appropiate mitigation costs. Include appropiate

practice, regulatory policy, and pricing policy. mitigation of adverse environmental effects, as

(2) A nonstructural measure or measures may in

some cases offer a complete alternative to a

traditional structural measure or measures. In

other cases, nonstructural measures may be

combined with fewer or smaller traditional

structural measures to produce a complete (c) Alternative plans, including the NED plan,

alternative plan. should be formulated in consideration of four

(g) Protection of the Nation’s environment is to

be provided by mitigation (as defined in 40 CFR

1508.20) of the adverse effects (as defined in 40 (1) Completeness is the extent to which a given

CFR 1508.8) of each alternative plan. Accordingly, alternative plan provides and accounts for all

each alternative plan should include mitigation necessary investments or other actions to ensure

determined to be appropriate by the agency the realization of the planned effects. This may

decision- maker. require relating the plan to other types of public or

(1) Appropiate mitigation to address effects on

fish and wildlife and their habitat should be

determined in consultation with Federal and State (2) Effectiveness is the extent to which an

fish and wildlife agencies in accordance with the alternative plan alleviates the specified problems

Fish and Wildlife Coordination Act of 1958 (16 and achieves the specified opportunities.

U.S.C. 661-666(c)), or other appropiate authority.

(2) Appropiate mitigation to address other plan is the most cost effective means of alleviating

adverse effects should be determined in the specified problems and realizing the specified

accordance with applicable laws, regulations, and opportunities, consistent with protecting the

Executive Orders. Nation’s environment.

(3) Mitigation measures determined to be (4) Acceptability is the workability and viability of

appropriate should be planned for concurrent the alternative plan with respect to acceptance by

implementation with other major project features, State and local entities and the public and

where practical. compatibility with existing laws, regulations, and

(h) Other existing water and related land

resource plans, such as State water resource

plans, should be considered as alternative plans if

within the scope of the planning effort.

(I) Various schedules, including staged

construction, for implementing alternative plans

should be considered.

1.6.2 Formulation

(a) Alternative plans which contribute to the

Federal objective should be systematically

formulated, in addition to a plan which reasonably

maximizes contributions to NED, other plans may

be formulated which reduce net NED benefits in

order to further address other Federal, State, local,

and international concerns not fully addressed by

the NED plan. These additional plans should be

required by law, in all alternative plans. Increments

that do not provide net NED benefits may be

included, except in the NED plan if they are costeffective measures for addressing specific

concerns.

criteria: Completeness; effectiveness; efficiency;

and acceptability.

private plans if the other plans are crucial to

realization of the contributions to the objective.

(3) Efficiency is the extent to which an alternative

public policies.

1.6.3 The NED Plan

A plan that reasonably maximizes net national

economic development benefits, consistent with

the Federal objective, is to be formulated. This

plan is to be identified as the national economic

development plan.

1.6.4 Other Alternative Plans

(a) Other alternative plans should be formulated

to adequately explore opportunities to address

other Federal, State, local, and international

concerns not fully addressed by the NED plan.

(b) The number and variety of alternative plans

should be governed by—
8

(1) The problems and opportunities associated hancement of long-term productivity should be diswith the water and related land resources in the played. Any irreversible or irretrievable commitments

study area; of resources should be displayed.

(2) The overall resource capabilities of the study (e) Effects on the values and attributes of ground

area; water and instream flow should be displayed.

(3) The available alternative measures; and (f) Effects of an alternative plan in the displays are

(4) Preferences of and conflicts among State and

local entities and different segments of the public.

(c) When institutional barriers would prevent implementation of an economically attractive plan, alternative plans which include removal of those barriers should be presented where such plans are implement able.

Section Vll — Accounts

1.7.1 General.

(a) Four accounts are established to facilitate

evaluation and display of the effects of alternative

plans. These accounts are: national economic development (NED), environmental quality (EQ), regional economic development (RED), and other

social effects (OSE). These four accounts encompass all significant effects of a plan on the human

environment as required by the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321

et seq.). They also encompass social well-being as

required by Section 122 of the Flood Control Act of

1970 (Pub. L. 91-611, 84 Stat. 1823). The EQ account shows effects on ecological, cultural, and

aesthetic attributes of significant natural and cultural

resources that cannot be measured in monetary

terms. The OSE account shows urban and community impacts and effects on life, health and safety.

The NED account shows effects on the national

economy. The RED account shows the regional incidence of NED effects, income transfers, and employment effects.

(b) The NED account is the only required account.

Other information that is required by law or that will

have a material bearing on the decisionmaking

process should be included in the other accounts

(EQ, RED, and OSE) or in some other appropriate

format used to organize information on effects.

(c) The same effect may be shown only once

within a given account except that the OSE account

may show the incidence of an effect from more than

one point of view. Beyond this exception, claiming the

same benefit, cost, change in a resource attribute, or

effect more than once in a given account would

constitute double counting.

(d) Relationships between short-term use of the

human environment and the maintenance and enthe differences between the forecasted conditions

with the plan and forecasted conditions without the

plan.

(g) Effects in the NED account are to be expressed

in monetary units. EQ effects are to be expressed in

appropriate numeric units or non-numeric terms.

RED and OSE effects are to be expressed in

monetary units, other numeric units, or non-numeric

terms.

(h) Monetary values are to be expressed in average annual equivalents by appropriate discounting

and annualizing techniques using the applicable

discount rate.

1.7.2 National Economic Development Account.

(a) General.

(1) The NED account describes that part of the

NEPA human environment, as defined in 40 CFR

1508.14, that identifies beneficial and adverse effects

on the economy.

(2) Beneficial effects in the NED account are increases in the economic value of the national output

of goods and services from a plan; the value of

output resulting from external economies caused by

a plan; and the value associated with the use of

otherwise unemployed or under-employed labor resources.

(3) Adverse effects in the NED account are the

opportunity costs of resources used in implementing

a plan. These adverse effects include: Implementation outlays, associated costs, and other direct

costs.

(4) Procedures which should be used for evaluating NED effects are in Chapter ll of these Guidelines.

(i) When an alternative procedure provides a more

accurate estimate of a benefit, the alternative

estimate may also be shown if the procedure is

documented.

(ii) Steps in a procedure may be abbreviated by

reducing the extent of the analysis and amount of

data collected where greater accuracy or detail is

clearly not justified by the cost of the plan

components being analyzed. The steps abbreviated

and the reason for abbreviation should be

documented.
9

(iii) Proposals for additions to or changes in the cannot be estimated from market price or change

procedures in Chapter ll may be made when an in net income. This assumes, of course, that

agency head determines that the new technique society would in fact undertake the alternative

will improve plan formulation and evaluation. means. Estimates of benefit should be based on

These proposals are to be submitted to the Water the cost of the most likely alternative only if there is

Resources Council for review and approval for evidence that the alternative would be

inclusion in Chapter ll. Procedures which represent implemented. In determining the most likely

changes in established policy are to be referred to alternative, the planner should give adequate

the Cabinet Council on Natural Resources and En- consideration to nonstructural and demand manvironment for its consideration. agement measures as well as structural

(b) Goods and services: General measurement

standard. The general measurement standard of

the value of goods and services is defined as the tratively established values are proxy values for

willingness of users to pay for each increment of specific goods and services cooperatively estaboutput from a plan. Such a value would be lished by the water resources agencies. An examobtained if the ?seller” of the output were able to ple of administratively established values is the

apply a variable unit price and charge each user range of unit-day values for recreation.

an individual price to capture the full value of the

output to the user. Since it is not possible in most

instances for the planner to measure the actual

demand situation, four alternative techniques can

be used to obtain an estimate of the total value of

the output of a plan: Willingness to pay based on

actual or simulated market price; change in net

income; cost of the most likely alternative; and

administratively established values.

(1) Actual or simulated market price. If the additional output from a plan is too small to have a significant effect on price, actual or simulated market

price will closely approximate the total value of the

output and may be used to estimate willingness to

pay. If the additional output is expected to have a

significant effect on market price and if the price

cannot be estimated for each increment of the

change in output, a price midway between the

price expected with and without the plan may be

used to estimate the total value.

(2) Change in net income. The value of the

change in output of intermediate goods and services from a plan is measured by their total value as

inputs to producers. The total value of intermediate

goods or services to producers is properly measured as the net income received by producers with

a plan compared to net income received without a

plan. Net income is defined as the market value of

producers' outputs less the market value of

producers' inputs exclusive of the cost of the

intermediate goods or services from a plan.

Increased net income from reduced cost of

maintaining a given level of output is considered a

benefit since released resources will be available

for production of other goods and services.

(3) Cost of the most likely alternative. The cost

of the most likely alternative may be used to

estimate NED benefits for a particular output if

non-Federal entities are likely to provide a similar

output in the absence of any of the alternative

plans under consideration and if NED benefits

measures.

(4) Administratively established values. Adminis-

(c) Goods and services: Categories. The NED

account includes goods and services in the following categories:

(1) Municipal and industrial (M&l) water supply

(2) Agricultural floodwater, erosion and 

 sedimentation reduction

(3) Agricultural drainage

(4) Agricultural irrigation

(5) Urban flood damage reduction

(6) Power (hydropower)

(7) Transportation (inland navigation)

(8) Transportation (deep draft navigation)

(9) Recreation

(10) Commercial fishing

(11) Other categories of benefits for which

procedures are documented in the planning report

and which are in accordance with the general

measurement standards in paragraph (b) of this

section.

(d) Other direct benefits. The other direct

benefits in the NED benefit evaluation are the

incidental direct effects of a project that increase

economic efficiency and are not otherwise

accounted for in the evaluation of the plan or

project. They are incidental to the purposes for

which the water resources plan is being

formulated. They include incidental increases in

output of goods and services and incidental

reductions in production costs. For example, a

project planned only for flood damage reduction

and hydropower purposes might reduce

downstream water treatment costs; this reduction

in costs would be shown as another direct benefit

in the NED account.

(e) Use of otherwise unemployed or underemployed labor resources.
10

(1) The opportunity cost of employing otherwise (2) Associated costs. These are the costs in adunemployed and underemployed workers is equal

to their earnings under the without plan conditions

(2) Conceptually, the effects of the use of unemployed or underemployed labor resources should

be treated as an adjustment to the adverse effects

of a plan on national economic development.

Since this approach leads to difficulties in cost

allocation and cost sharing calculations, the

effects from the use of such labor resources are to

be treated as an addition to the benefits resulting

from a plan.

(3) Beneficial effects from the use of

unemployed or underemployed labor resources

are limited to labor employed on site in the

construction or installation of a plan. This limitation

reflects identification and measurement problems wetlands, increased water supply treatment costs

and the requirement that national projections are

to be based on a full employment economy.

(4) If the planning region has substantial and

persistent unemployment and these labor resources will be employed or more effectively employed in installation of the plan, the net additional

payments to the unemployed and underemployed

labor resources are defined as a benefit.

(f) Adverse NED effects: Measurement standards.

(1) In evaluating NED costs, resource use is

broadly defined to include all aspects of the economic value of the resource. This broad definition

requires consideration of the direct private and

public uses that producers and consumers are

currently making of available resources or are

expected to make of them in the future.

(2) If market prices reflect the full economic

value of a resource to society, they are to be used

to determine NED costs. If market prices do not

reflect these values, then an estimate of the other

direct costs should be included in the NED costs.

(3) NED costs may reflect allowance for the salvage value of land, equipment, and facilities that

would have value at the end of the period of analysis.

(g) NED cost categories. For convenience of

measurement and analysis, NED costs should be

classified as implementation outlays, associated

costs and other direct costs.

(1) Implementation outlays. These are the financial outlays (including operation, maintenance and

replacement costs) incurred by the responsible

Federal entity and by other Federal or non-Federal

entities for implementation of the plan in accordance with sound management principles. These

costs do not include transfer payments such as replacement housing assistance payments as specified in 42 U.S.C. 4623 and 4624.

dition to implementation outlays for measures

needed to achieve the benefits claimed during the

period of analysis. For example, associated costs

would include the cost of irrigation water supply laterals if they are not accounted for in the benefit

estimate.

(3) Other direct costs. These are the costs of resources directly required for a project or plan, but

for which no implementation outlays are made.

These costs are uncompensated, unmitigated

NED losses caused by the installation, operation,

maintenance, or replacement of project or plan

measures. Examples of other direct costs include

increased downstream flood damages caused by

channel modifications, dikes, or the drainage of

caused by irrigation return flows, and displaced

public recreation.

1.7.3 Environmental Quality Account.

(a) General 

(1) The EQ account is a means of displaying and

integrating into water resources planning that information on the effects of alternative plans on significant EQ resources and attributes of the NEPA

human environment, as defined in 40 CFR

1507.14, that is essential to a reasoned choice

among alternative plans. Significant means likely

to have a material bearing on the decisionmaking

process.

(2) Beneficial effects in the EQ account are favorable changes in the ecological, aesthetic, and

cultural attributes of natural and cultural

resources.

(3) Adverse effects in the EQ account are unfavorable changes in the ecological, aesthetic, and

cultural attributes of natural and cultural

resources.

(4) A suggested procedure which may be used

for evaluating effects included in the EQ account

appears in Chapter lll of these Guidelines.

(b) Significant EQ resources and attributes.

(1) An EQ resource is a natural or cultural form,

process, system, or other phenomenon that—

(i) Is related to land, water, atmosphere, plants,

animals, or historic or cultural objects.

(ii) Has one or more EQ attributes (ecological,

cultural, aesthetic).

(2) EQ attributes are the ecological, cultural, and

aesthetic properties of natural and cultural resources that sustain and enrich human life.
11

(i) Ecological attributes are components of the (3) Effects that cannot be satisfactorily quantified

environment and the interactions among all its living or described with available methods, data, and in-

(including people) and nonliving components that formation or that will not have a material bearing

directly or indirectly sustain dynamic, diverse, viable on the decisionmaking process may be excluded

ecosystems. In this category are functional and from the RED account.

structural aspects that require special consideration

because of their unusual characteristics.

(ii) Cultural attributes are evidence of past and

present habitation that can be used to reconstruct

or preserve human lifeways. Included in this category are structures, sites, artifacts, environments,

and other relevant information, and the physical

contexts in which these occur.

(iii) Aesthetic attributes are perceptual stimuli that

provide diverse and pleasant surroundings for

human enjoyment and appreciation. Included in this

category are sights, sounds, scents, tastes, and

tactile impressions and the interactions of these

sensations, of natural and cultural resources.

(3) Significant EQ resources and attributes should

be identified based on institutional, public, and

technical recognition.

(c) Significant effects.

(1) An effect on an EQ resource occurs whenever

estimates of future with- and without-plan conditions

of the resource are different.

(2) An effect may be described in terms of duration, frequency, location, magnitude, and other

characteristics, such as reversibility, retrievability.

and the relationships to long-term productivity,

where their description is relevant and useful to

decisionmaking.

(3) The significance of an effect may be established based on institutional, public, and technical

recognition.

(d) Summary. There should be an overall summary of significant beneficial and adverse effects on

EQ resources.

1.7.4 Regional Economic Development Account.

(a) General

(1) The RED account registers changes in the

distribution of regional economic activity that result

from each alternative plan. Two measures of the

effects of the plan on regional economies are used

in the account: Regional income and regional employment

(2) The regions used for RED analysis are those

regions with in which the plan will have particularly

significant income and employment effects. Effects

of a plan not occurring in the significantly affected

regions are to be placed in a ”rest of nation" category.

(b) Positive effects on regional economic

development.

(i) Regional income. The positive effects of a

plan on a region's income are equal to the sum of

the NED benefits that accrue to that region, plus

transfers of income to the region from outside the

region.

(ii) Regional incidence of NED benefits. Because

of the definition of region used for the RED account, all or almost all of the NED benefits for the

plan will accrue to that region, plus transfers of

income to the region from outside the region.

(ii) Transfers. Income transfers to a region as a

result of a plan include income from: Implementation outlays, transfers of basic economic activity,

indirect effects, and induced effects. In each case

income transfers refer to increases in net income

within the region rather than to increases in total

expenditure.

(A) Income from implementation outlays is that

portion of project outlays that becomes net income

in the regional economy, exclusive of NED benefits

from use of otherwise unemployed or underemployed labor resources.

(B) Income from transfers of basic economic activity is net income from economic activity that locates in the region as a direct result of differences

between the with- and without-plan conditions.

(C) Income from indirect effects is regional net

income resulting from expansion in the production

of inputs to industries supplying increased final

products and regional exports.

(D) Income from induced effects is regional net

income resulting from changes in consumption expenditures generated by increases in personal

income.

(2) Regional employment.

(i) The positive effects of a plan on regional employment are directly parallel to the positive effects

on regional income, so that analysis of regional

employment effects should be organized in the

same categories using the same conceptual bases

as the analysis of positive regional income effects.

Regional employment associated with each of the

regional income categories should be calculated

and listed accordingly.

(ii) To the extent practical, planning reports

should provide reasonable estimates of the

composition of increased employment according

to relevant service, trade, and industrial sectors,
12

including a separate estimate for agriculture. The (1) The OSE account is a means of displaying

nature of the employment increase to each sector and integrating into water resource planning inforshould be classified as to the level of skill mation on alternative plan effects from perspecrequired—unskilled, semiskilled, and highly skilled. tives that are not reflected in the other three ac-

(c) Negative effects on regional economic development.

(1) Regional income. The negative effects of a

plan on a region's net income are equal to the sum

of the NED costs of the plan that are borne by the

region, plus transfers of income from the region to

the rest of the Nation.

(i) Regional incidence of NED costs. The NED

costs of a plan that are borne by a region should be

organized in the same categories used in the cost

section of the NED account. Information from the

cost allocation and cost sharing analysis undertaken as a part of the planning process will be

needed to estimate these direct expenditures.

(ii) Transfers. Income transfers from the region

include net income losses from plan-induced shifts

of economic activity from the region to the rest of

the Nation and losses in existing transfer payments,

plus any impacts that may affect the region as a

result of NED costs or transfers from the region.

(2) Regional employment.

(i) The negative effects of a plan on regional employment should be organized and analyzed using

the same categories and conceptual bases used for

negative regional income effects (paragraph (c)(1)

of this section).

(ii) The incidence of negative regional employment effects should be shown in a manner similar

to that required for the positive regional employment effects.

(d) Relationship between RED and NED effects.

Income information in the RED account should be

organized in the same categories as the NED effects. The relationship between the affected regional economies and the national economy should be

recognized. Since the NED account registers all effects on the national economy, any differences between the regional and national economic effects of

a plan take the form of transfers from the rest of

Nation. The effects of these transfers should be

listed in a ?rest of Nation” category. The effects in

the rest of Nation category are equal to the difference between the RED effects and NED effects of

a plan. This rest of nation category should be displayed in the RED account together with the RED

and NED effects.

1.7.5 Other Social Effects Account.

(a) General.

counts. The categories of effects in the OSE account include the following: Urban and community

impacts; life, health, and safety factors; displacement; long-term productivity; and energy requirements and energy conservation.

(2) Effects may be evaluated in terms of their impacts on the separate regions and communities affected.

(3) Effects on income, employment, and population distribution, fiscal condition, energy requirements, and energy conservation may be reported

on a positive or negative basis. Effects on life,

health, and safety may be reported as either beneficial or adverse. Other effects may be reported on

either a positive negative basis or a beneficial

adverse basis.

(4) Effects that cannot be satisfactorily quantified

or described with available methods, data, and information or that will not have a material bearing

on the decisionmaking process may be excluded

from the OSE account.

(b) Urban and community impacts.

(1) A formal treatment of urban related impacts

is not required for implementation studies.

However, types and locations of significant

impacts, broken down by salient population groups

and geographic areas, may be reported in the

OSE account.

(2) The principal types of urban and community

impacts are—

(i) Income distribution;

(ii) Employment distribution, especially the share

to minorities;

(iii) Population distribution and composition;

(iv) The fiscal condition of the State and local

governments; and

(v) The quality of community life.

(c) Life, health, and safety. Effects in this category include such items as risk of flood, drought, or

other disaster affecting the security of life, health,

and safety; potential loss of life, property, and essential public services due to structural failure; and

other environmental effects such as changes in air

or water quality not reported in the NED and EQ

accounts.

(d) Displacement. Effects in this category include

the displacement of people, businesses, and

farms.

(e) Long-term productivity. Effects in this category include maintenance and enhancement of the
13

productivity of resources, such as agricultural land, .Table 1.8.2.—Effects of the Recommended Plan

for use by future generations. on Natural and Cultural Resources

Section Vlll—Displays

1.8.1 General.

(a) Displays are graphs, tables, drawings, photographs, summary statements, and other graphics in

a format that facilitates the analysis and comparison

of alternative plans. Concise, understandable

displays are helpful during the planning process

and provide documentation in compliance with

NEPA.

(b) Displays should facilitate the evaluation and

comparison of alternative plans necessary to make

the following determination:

(1) The effectiveness of given plans in solving the

problems and taking advantage of the opportunities

identified in the planning process.

(2) What must be given up in monetary and non

monetary terms to enjoy the benefits of the various

alternative plans.

(3) The differences among alternative plans.

1.8.2 Content and Format.

The content and format of the displays should be

determined by the planning agency according to the

following guidance:

(a) Existing and forecasted resource conditions

without any of the alternative plans and the problems and opportunities related to the planning setting should be reported. 

Table 1.8.2.—Effects of the Recommended Plan

on Natural and Cultural Resources

Types of resources Authorities Measurement of

effects1

Air Clean Air Act, as Enter area in

Quality................ amended (42 square miles where

U.S.C. 1857h-7 et State air quality

seq.). classifications

would change for

each affected

classification.

Areas of particular Costal Zone Enter gains and

concern within the Management Act of losses in

costal zone. 1972, as amended appropriate units.

(16 U.S.C. 1451 et

seq.)

Types of Resources Authorities Measurement of

effects1

Endangered and Endangered Species (Enter list of species

threatened species Act of 1973, as affected and area of

amended (16 U.S.C. each critical habitat

1531 et seq.). type gained and lost

in acres.)

Fish and Wildlife Fish and Wildlife (Enter area of each

habitat Coordination Act (16 habitat type gained

U.S.C. 661 et seq.) and lost, in acres.)

Floodplains................ Executive Order (Enter area gained

11988, Floodplain and lost, in acres.)

Management.

Historic and Cultural National Historic (Enter number and

properties Preservation Act of type of National

1966, as amended (16Register [listed or

U.S.C. 470 et seq.). eligible] properties

affected.)

Prime and Unique CEQ Memorandum of(Enter area of each

farmland August 1, 1980: farmland type gained

Analysis of Impacts onand lost, in acres.)

Prime or Unique

Agricultural lands in

implementing the

National

Environmental Policy

Act.

Water quality............ Clean Water Act of (Enter length in

1977, as amended (42miles of water

U.S.C. 1857h-7 et course, and area in

seq.). acres for water

bodies, where state

water quality

classifications would

change for each

classification.)

Wetlands.................. Executive Order Enter area of each

11990, Protection of wetland type gained

Wetlands: Clean and lost, in acres.)

Water Act of 1977, as

amended (42 U.S.C.

1857h-7 et seq.).

Wild and Scenic Wild and Scenic (Enter length of each

Rivers Rivers Act, as river type gained and

amended (16 U.S.C. lost, in miles.)

1271 et seq.).

If a type of resource is not present in the planning area, enter 1

“Not present in planning area.” If a type of resource is not

affected, enter “No effect.”
14

(b) Displays regarding reasonable alternatives, including those required by NEPA, should include the

following items:

(1) Measures in each plan.

(2) Effects in the NED account.

(3) Other effects, when shown in either the EQ,

RED, and OSE accounts, or in some other appropriate format.

(c) For the recommended plan, an aggregate display of effects on natural and cultural resources, in

the format of Table 1.8.2, should be included.

(d) A matrix should be included which shows existing or planned Federal and non-Federal projects

or facilities having significant economic, environmental, or physical interactions with the recommended plan together with a brief narrative description of these interactions.

(e) Alternative actions that were considered but

were not developed into plans should be described

briefly. The descriptions should include the measures and effects and the reasons for not proceeding

further.

Section IX — Cost Allocation

1.9.1 General.

(a) The need for cost allocation stems from pricing and cost-sharing policies that vary among purposes. Cost allocation is the process of apportioning

total project financial costs among purposes served

by a plan.

(b) Financial costs are implementation outlays,

transfer payments such as replacement housing assistance payments as specified in 42 U.S.C. 4623

and 4624, and the market value of contributions in

kind, e.g., lands.

(c) Financial costs are to be allocated to those

purposes for which the plan is formulated. These

purposes do not include other direct benefits (see

Section 1.7.2(d)) and use of otherwise unemployed

or underemployed labor resources. All purposes are

to be treated comparably

1.9.2 Definitions.

(a) Separable cost for each purpose in a plan is

the reduction in financial cost that would result if that

purpose were excluded from the plan. This reduction

in cost includes—

(1) The financial cost of measures serving only

the excluded purpose; and

(2) Reductions in the financial cost of measures

serving multiple purposes. In some cases removal of

a purpose would result in selection of different

measures to address the remaining purposes.

(b) Joint cost is the total financial cost for a plan

minus the sum of separable financial costs for all

purposes.

(c) Alternative cost for each purpose is the financial cost of achieving the same or equivalent benefits with a single-purpose plan.

(d) Remaining benefit for each purpose is the

amount, if any, by which the NED benefit or, when

appropriate, the alternative financial cost exceeds

the separable financial cost for that purpose. The

use of alternative cost is appropriate when alternative financial cost for the purpose is less than the

NED benefit, or when there are project purposes that

do not address the NED objective.

1.9.3 Cost Allocation Standard.

Costs allocated to each purpose are the sum of

the separable cost for the purpose and a share of

joint cost as specified below:

(a) Joint cost may be allocated among purposes

in proportion to remaining benefits.

(b) Joint cost may be allocated in proportion to

the use of facilities, provided that the sum of allocated joint cost and separable cost for any purpose

does not exceed the lesser of the benefit or the alternative cost for that purpose.

1.9.4 Allocation of Constituent Cost.

Cost-sharing policies for some purposes pertain

to cost constituents such as construction costs, and

operation and maintenance costs. Costs for each

cost constituent specified in the relevant cost sharing

policy should be allocated among purposes.

Section X — Plan Selection

1.10.1 General.

The planning process leads to the identification

of alternative plans that could be recommended or

selected. The culmination of the planning process is

the selection of the recommended plan or the

decision to take no action. The selection should be

based on a comparison of the effects of alternative

plans. (See Section 1.6.2—Alternative Plans, Formulation.)
15

1.10.2 Selection. 20 years, a situation of risk, rather than uncertainty,

(a) The alternative plan with the greatest net economic benefit consistent with protecting the Nation's

environment (the NED plan) is to be selected unless

the Secretary of a department or head of an

independent agency grants an exception when there

is some overriding reason for selecting another plan,

based upon other Federal, State, local, and

international concerns.

(b) The alternative of taking no action, i.e., selecting none of the alternative plans, should be fully

considered.

(c) Plan selection is made by the agency -

decisionmaker for Federal and Federally-assisted

plans. Agency officials and State and local sponsors

may recommend selection of a plan other than the

NED plan. The agency decisionmaker (the Secretary

of a department or the head of an independent

agency) will determine whether the reasons for

selecting a plan other than the NED plan merit the

granting of an exception.

(d) The basis for selection of the recommended

plan should be fully reported, including considerations used in the selection process.

(e) Plans should not be recommended for Federal development if they would physically or economically preclude non-Federal plans that would likely be

undertaken in the absence of the Federal plan and

that would more effectively contribute to the Federal

objective when comparably evaluated.

Supplement I

Risk and uncertainty—Sensitivity analysis

Uncertainty and variability are inherent in water

resources planning. For example, there is uncertainty in projecting such factors as stream flows,

population growth, and the demand for water.

Therefore, the consideration of risk and uncertainty is

important in water resources planning.

This supplement provides guidance for the evaluation of risk and uncertainty in the formulation of

water resources management and development

plans.

S1 Concepts.

(a) Risk. Situations of risk are conventionally defined as those in which the potential outcomes can

be described in reasonably well known probability

distributions. For example, if it is known that a river

will flood to a specific level on the average of once in

exists.

(b) Uncertainty. In situations of uncertainty, potential outcomes cannot be described in objectively

known probability distributions. Uncertainty is characteristic of many aspects of water resources planning. Because there are no known probability distributions to describe uncertain outcomes, uncertainty

is substantially more difficult to analyze than risk.

(c) Sources of risk and uncertainty. (1) Risk and

uncertainty arise from measurement errors and from

the underlying variability of complex natural, social,

and economic situations. If the analyst is uncertain

because the data are imperfect or the analytical

tools crude, the plan is subject to measurement

errors. Improved data and refined analytic

techniques will obviously help minimize measurement errors.

(2) Some future demographic, economic,

hydrologic, and meteorological events are essentially

unpredictable because they are subject to random

influences. The question for the analyst is whether

the randomness can be described by some probability distribution. If there is an historical data base

that is applicable to the future, distributions can be

described or approximated by objective techniques.

(3) If there is no such historical data base, the

probability distribution of random future events can

be described subjectively, based upon the best

available insight and judgment.

(d) Degrees of risk and uncertainty. The degree

of risk and uncertainty generally differs among various aspects of a project. It also differs over time,

because benefits from a particular purpose or costs

in a particular category may be relatively certain

during one time period and uncertain during another.

Finally, the degree of uncertainty differs at different

stages of the analysis—for example, between rough

screening and final detailed design, when more

precise analytic methods can be applied.

(e) Attitudes. The attitudes of decisionmakers

toward risk and uncertainty will govern the final selection of projects and of adjustments in design to

accommodate risk and uncertainty. In principle, the

government can be neutral toward risk and uncertainty, but the private sector may not be. These differences in attitudes should be taken into account in

estimating the potential success of projects.

S2 Application.

(a) The role of the planner. (1) The planner's primary role in dealing with risk and uncertainty is to

characterize to the extent possible the different degrees of risk and uncertainty and to describe them

clearly so that decisions can be based on the best
16

available information. The planner should also sug- project or specific aspects of it are uncertain, as well

gest adjustments in design to reflect various attitudes as the time periods in which different degrees of

of decisionmakers toward risk and uncertainty. If the uncertainty are likely. A range of reasonably likely

planner can identify in qualitative terms the outcomes can then be described by using sensitivity

uncertainty inherent in important design, economic, analysis—the technique of varying assumptions as to

and environmental variables, these judgments can alternative economic, demographic, environmental,

be transformed into or assigned subjective probabil- and other factors, and examining the effects of these

ity distributions. A formal model characterizing the varying assumptions on outcomes of benefits and

relationship of these and other relevant variables costs. In some cases and in some stages of

may be used to transform such distributions to exhibit planning, this approach, when accompanied by a

the uncertainty in the final outcome, which again is careful description of the dimensions of uncertainty,

represented by a probability distribution. will be sufficient. It can be accompanied by

(2) At all stages of the planning process, the

planning can incorporate any changes in project

features that, as a result of information gained at that (g) It may be appropriate in some cases to charstage, could lead to a reduction in risk and un- acterize the range of outcomes with a set of subcertainty at a cost consistent with improvement in jective probability estimates, but the project report

project performance. should make clear that the numerical estimates are

(b) Some risk and uncertainty are assumed in

nearly every aspect of a water resources project.

Some types of risk and uncertainty are dealt with in

terms of national planning parameters—for example,

ranges of population projections and other principal

economic and demographic variables. Other types of

risk and uncertainty are dealt with in terms of project (h) Utility functions may be used in conjunction

or regional estimates and forecasts. When projects with assessments of uncertainty to explore design

are related to other projects and programs in their adaptations reflecting specific preferences. Public

risk and uncertainty aspects (e.g., interrelated preferences, if well known, may be used to illustrate

hydrologic systems), reasonable attempts should be to decisionmakers what the best design would be,

made to see that the same analyses and presumed given the uncertainties and preferences in a

probability distributions are used for all of them. particular case. If public preferences are not well

(c) The risk and uncertainty aspects of projects

are likely to be seen and analyzed differently as

planning proceeds from rough screening to detailed

project proposals. An effort should be made, therefore, to relate the techniques used in characterizing (i) At each level of analysis, the planner should

and dealing with risk and uncertainty to the stage of take into account the differences in risk and uncerthe planning process. tainty among project purposes and costs, among

(d) The resources available for analyzing aspects

of risk and uncertainty should be allocated to those

assessments that appear to be the most important in (j) Adjustments to risk and uncertainty in project

their effects on project and program design. Rather evaluation can be characterized as general or spethan assuming in advance that one or another cific. General adjustments include the addition of a

variable is a more important source of risk and premium rate to the interest, overestimation of costs,

uncertainty, the planner should make a thorough underestimation of benefits, and limitations on the

effort to determine which variables will be most period of analysis. Such general adjustments are

useful in dealing with measurement errors and usually inappropriate for public investment decisions

natural sources of risk and uncertainty. because they tend to obscure the different degrees

(e) The aspects of project evaluation that can be

characterized by a probability distribution based on

reasonably firm data, such as hydrologic risk, can be

treated by standard methods of risk evaluation

developed by Federal agencies and others.

(f) Most risk and uncertainty aspects of projects

cannot be characterized by probability distributions

based on well established empirical data. A first step

in dealing with this problem is to describe why the

descriptions of design adjustments representing

various attitudes toward uncertainty.

subjective. Moreover, subjective probability distributions should be chosen and justified case by case,

and some description of the impact on design of

other subjective distributions should be given. Design

alternatives reflecting various attitudes toward

uncertainty may be suggested.

known, justification could be given for the selection

of various utility functions, which can be used only to

illustrate the effects on design of various preferences.

various time periods, and among different stages of

planning.

of uncertainty in different aspects of projects and

programs. Specific adjustments—including explicit

assessments of different degrees of risk and

uncertainty in specific aspects of a project or

program and specific adjustments to them—are

preferable. Additional information on methods of

dealing with risk and uncertainty can be found in

Section 1.4.13(d) of Chapter 1.
17

(k) One guide to the use of the techniques discussed here is displayed in Table S-2. In general,

more complex techniques are appropriate as planning proceeds from the initial development and the

screening of alternatives to the analysis and presentation of the final set of alternative plans. For example, sensitivity analysis—testing the sensitivity of

the outcome of project evaluation to variation in the

magnitude of key parameters—may be most useful

and applicable in the early stages of planning, when

the concern is to understand single factors or

relatively general multiple-factor relationships. Multiple-factor sensitivity analysis, in which the joint effects

or correlations among underlying parameters are

studied in greater depth, may be more appropriate in

the detailed analytic stage than in the screening stage.

(l) Similarly, analysis of risk and uncertainty based

on objective or subjective probability distributions

would be more appropriate in the detailed analytic

stage than in the early screening stage. Although

hydrologic and economic probabilities may be used in

the screening stage, the full use of independent and

joint probability distributions, possibly developed from

computer simulation methods, to describe expected

values and variances, is more appropriately reserved

for the detailed stage.

Table S-2 — Planning Task and Approaches to Risk

and Uncertainty

Planning Tasks

Screen- Detailed

ing analysis

alterna- of

tives projects

Final

presentation of

alternatives

Sensitivity analysis..................... X X X

Use of objective and subjective

probability distributions............... X X

Illustrative application of public

preferences and decisionmakers’ attitudes......................... X X

(m) Although decisionmakers' attitudes and decision rules can be used to give perspective on alternative designs throughout the planning process, they

are more appropriate at the stage of displaying

alternative designs.

(n) The differences among the underlying degrees

of risk and uncertainty, the design adaptations to them,

and the preferences of decisionmakers should be kept

clear throughout the analysis. The first two depend

primarily on technical expertise; the last is the set of

preferences based on various attitudes toward risk and

uncertainty.

S3 Report and display.

The assessment of risk and uncertainty in project

evaluation should be reported and displayed in a

manner that makes clear to the decisionmaker the

types and degrees of risk and uncertainty believed to

characterize the benefits and costs of the alternative

plans considered.
18

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19

Chapter II—National Economic Development (NED)

Procedures

Section I—General

2.1.1 Purpose.

(a) The NED procedures in this chapter are for

Federal administrative purposes and do not create

any substantive or procedural rights in private parties.

(b) This chapter provides procedures for evaluating NED effects of alternative plans.

(1) When an alternative procedure provides a

more accurate estimate of a benefit, the alternative

estimate may also be shown if the procedure is

documented.

(2) Steps in a procedure may be abbreviated by

reducing the extent of the analysis and amount of

data collected where greater accuracy or detail is

clearly not justified by the cost of the plan components being analyzed. The steps abbreviated and the

reason for abbreviation should be documented.

(3) Proposals for additions to or changes in the

procedures in Chapter ll may be made when an

agency head determines that the new technique will

improve plan formulation and evaluation. These

proposals are to be submitted to the Water Resources Council for review and approval for inclusion

in Chapter ll. Procedures that represent changes in

established policy are to be referred to the Cabinet

Council on Natural Resources and Environment for

its consideration.

2.1.2 Conceptual basis.

Compare project NED benefits and costs at a

common point in time. Present the following information:

(a) Installation period--the number of years required for installation of the plan. If staged installation is proposed over an extended period of time, the

installation period is the time needed to install the

first phase.

(b) Installation expenditures--the dollar expenses

expected to be incurred during each year of the Installation period.

(c) Period of analysis--the time horizon for project

benefits, deferred installation costs, and operation,

maintenance, and replacement (OM&R) costs. Use

the same period of analysis for all alternative plans.

The period of analysis is the time required for

implementation plus the lesser of (1) the period of

time over which any alternative plan would have

significant beneficial or adverse effects; or (2) a

period not to exceed 100 years. Appropriate

consideration should be given to environmental

factors that may extend beyond the period of analysis.

(d) Benefit stream--the pattern of expected benefits

over the period of analysis.

(e) OM&R costs--the expected costs over the

period of analysis for operation, maintenance, and

replacement necessary to maintain the benefit

stream and agreed-upon levels of mitigation of

losses to fish and wildlife habitats.

(f) Discount rate--the rate established annually for

use in evaluating Federal water projects.

2.1.3 Calculating net NED benefits in average 

annual equivalent terms.

Net NED benefits of the plan are calculated in

average annual equivalent terms. To perform this

calculation, discount the benefit stream, deferred

installation costs, and OM&R costs to the beginning

of the period of analysis using the applicable project

discount rate. Installation expenditures are brought

forward to the end of the period of installation by

charging compound interest at the project discount

rate from the date the costs are incurred. Use the

project discount rate to convert the present worth

values to average annual equivalent terms.

2.1.4 Definitions.

Terms used in these guidelines are defined as

follows:

Agricultural drainage. (1) The rehabilitation and

improvement of existing drainage systems or the

construction of new drainage systems to improve the

efficiency of cropland, woodland, and grassland by

lowering the water level in areas in which agricultural

production has been limited by naturally high water

tables, normal precipitation or normal tide action,

seepage, or excess irrigation water.

(2) Drainage projects include measures for surface drainage, the removal of excess water above

the surface of the ground; and subsurface drainage,

the removal of excess water below the surface of the

ground. Drainage projects involve watershed or sub

watershed areas composed in whole or in part of

lands drained or proposed to be drained. The

boundaries of the water problem area may consist of

artificial barriers that prevent the inflow of water

originating outside of the area.
20

Agricultural flood damage reduction. The adjust- normally dry land from the overflow of rivers and

ment in land use and the structural and nonstructural

measures designed to reduce hazard from

floodwater, erosion, and/or sediment. Reduction of

sediment on agricultural land will normally serve the

single purpose of flood damage reduction. Reduction of sediment in channels or reservoirs may serve

other purposes as well (i.e., navigation, water supply,

power) and should be identified accordingly. To

differentiate flood damage reduction from agricultural and rural drainage of flatlands, flood

damage reduction is defined as any measure undertaken to reduce or prevent damages from surface water caused by abnormally high direct precipitation, stream overflow. or floods caused or aggravated by wind or tidal effects.

Flood. A general and temporary condition of partial

or complete inundation of normally dry land from the

overflow of inland or tidal waters, or the unusual and

rapid accumulation or runoff of surface waters from

any source.

Nonstructural measure. A modification in public

policy, an alteration in management practice, a regulatory change, or a modification in pricing policy that

provides a complete or partial alternative for

addressing water resources problems and opportunities.

Separable feature. A project element that can be

implemented or constructed independently of other

features and that does not depend on other features

for its structural (or other) viability.

Urban drainage. (1) The adjustment in land use

and storm sewer systems designed to collect runoff

from rainfall or snow melt in an urban area and

convey it to natural water courses or to previously

modified natural waterways. Storm sewer systems

include storm drains, inlets, manholes, pipes, culverts, conduits, sewers, and sewer appurtenances,

onsite storage and detention basins, curbs and gutters, and other small drainageways that remove or

help to manage runoff in urban areas.

(2) Storm sewer systems are designed to solve

urban storm drainage problems. which are typified by

excessive accumulations of runoff in depressions,

overland sheet flow resulting from rapid snowmelt or

rainfall, and excessive accumulation of water in one

or more components of a storm sewer system.

Urban flood damage reduction. The adjustment in

land use and the structural and nonstructural measures designed to reduce flood damages in urban

areas from overflow or backwater due to major

storms and snowmelt. The measures include structural and other engineering modifications to natural

streams or to previously modified natural waterways.

Urban flood damage reduction is accomplished by

modifying temporary conditions of inundation of

streams or from abnormally high coastal waters

due to severe storms.

Water supply. The water that becomes

available for consumptive and nonconsumptive

uses either through increases in quantity or

improvements in quality of existing supplies.

Section II—NED Benefit Evaluation

Procedures—Municipal and

Industrial (M&I) Water Supply

2.2.1 Introduction.

This section provides procedures for the

evaluation of NED benefits of municipal and

industrial (M&I) water supply features of water

resource plans. The procedures presented apply

to both structural and nonstructural elements of

such plans.

2.2.2 Conceptual basis.

(a) The conceptual basis for evaluating the

benefits from municipal and industrial water

supply is society's willingness to pay for the

increase in the value of goods and services

attributable to the water supply. Where the price

of water reflects its marginal cost, use that price

to calculate willingness to pay for additional water

supply. In the absence of such direct measures of

marginal willingness to pay, the benefits from a

water supply plan are measured instead by the

resource cost of the alternative most likely to be

implemented in the absence of that plan.

(b) The benefits from nonstructural measures

are also computed by using the cost of the most

likely alternative. However, the net benefits of

certain nonstructural measures that alter water

use cannot be measured effectively by the

alternative cost procedure for the following

reasons: (1) Structural measures and many

nonstructural measures (except those that alter

use) result in similar plan outputs, whereas

use-altering measures (e.g., revised rate

structures) may change levels of output; and (2)

use-altering measures may have fewer direct

resource costs than measures based on higher

levels of output. Because of this lack of

comparability, the benefit from such use-altering

nonstructural measures should not be based on

the cost of the most likely alternative. Attempts to

measure the benefits of use-altering

nonstructural measures on the basis of
21

willingness to pay are encouraged, although the (6) Nonstructural measures and conservation.

display of such benefits is not required.

2.2.3 Planning setting.

(a) Without-project condition. The without-project

condition is the most likely condition expected to exist

in the future in the absence of the proposed water

supply plan, including any known changes in law or

public policy. Several specific elements are included

in the without-project condition:

(1) Existing water supplies. Existing water supplies

are included in the without-project condition. Make

adjustments to account for anticipated changes in

water supply availability because of the age of

facilities or changed environmental requirements.

(2) Institutional arrangements. Existing and expected future water systems and water monument

contracts and operating criteria are considered part

of the without-project condition unless revision of

these systems, contracts, or criteria is one of the

alternative plans being studied.

(3) Additional water supplies. The without-project

condition includes water supplies that are under

construction or authorized and likely to be constructed during the forecast period.

(4) Probability of water supply. Include calculation

and specification of the probability of delivery for

each source of water supply in the analysis.

(5) Water quality. Water use is based on both the

quantity and the quality of water supply. Different

uses may require different qualities as well as quantities of water. Supplies also vary according to quality

and quantity. Because water quality is a critical factor

in water supply, it should be specified in any

consideration or presentation related to water quantity. The degree of detail used to describe water

quality should be suitable to permit differentiation

among water sectors or available water supply

sources.

The without-project condition includes the effects

of implementing all reasonably expected

nonstructural and conservation measures. These

measures include:

(1) Reducing the level and/or altering the time

pattern of demand by metering, leak detection

and repair, rate structure changes, regulations on

use (e.g., plumbing codes), education programs,

drought contingency planning;

(2) Modifying management of existing water development and supplies by recycling, reuse, and

pressure reduction; and

(3) Increasing upstream watershed

management and conjunctive use of ground and

surface waters.

(b) With-project condition. The with-project

condition is the most likely condition expected to

exist in the future with the Federal water supply

plan under consideration. The six elements and

assumptions addressed in the without-project

condition should also be addressed in the

with-project condition. Nonstructural water supply

measures may be used alone or in Combination

with structural measures. If the proposed

measures are already in the process of

implementation, they are part of the without-project condition.

2.2.4 Evaluation procedure: General.

Follow the steps described in 2.2.5 through

2.2.13 to estimate NED benefits that would

accrue to one or more alternative plans for

providing an M&l water supply (see Figure 2.2.4).

The level of effort expended on each step

depends on the nature of the proposed

development, the state of the art for accurately

refining the estimate, and the sensitivity of project

formulation and justification to the estimate.
Identify the study area

Estimate future

M&I water supply

Project future 

M&I water use

Project future M&I water use

Identify deficit between 

future water supply and use

Identify alternatives without 

Federal plan

Rank and display alternative plans

Identify the most likely alternative

Compute M&I benefit

22

Figure 2.2.4 -- Flowchart of M&I Benefit Evaluation Procedures
23

2.2.5 Evaluation procedure: Identify study area. nants to project alternative future water use by sector

The study area is the area within which significant

project impacts will accrue from the use of M&I water

supplies, including areas that will receive direct benefits

and/or incur costs from the provision of M&I water

supply.

2.2.6 Evaluation procedure: Estimate future M&I

water supplies.

Prepare an analysis of all sources of supply expected

to be available to the M&I water user. Data may be

obtained from various sources, including water utilities,

State and local planning agencies, and State water

resources agencies. This analysis should be by time

period and include existing water supplies. institutional

arrangements, additional water supplies, probability of

water supply, and water quality.

2.2.7 Evaluation procedure: Project future M&l 

water use.

Project future water use by sector in consideration of

seasonal variation. Base projections on an analysis of

those factors that may determine variables in levels of

water use.

(a) Sector analysis. Project future water use for the

same time periods as for the supply projections for plemented by communities and/or industries in the

each of the following sectors: Residential (include absence of any Federal alternative. Test various alindoor use and outdoor uses such as lawn irrigation ternatives to the Federal plans for acceptability, efand car washing); commercial (include water use for fectiveness, efficiency, and completeness as defined in

retail and wholesale trade, offices, hospitals, schools, Chapter I, section 6.2(c). These plans should be

medical laboratories. restaurants, service industries, identified through analysis of the total water resources of

etc.); industrial (include all water used by the region, allowing for present and expected competing

manufacturing industries as an input in the production uses.

process); and additional uses (include public service

use--for example, fire protection--and unaccounted-for

losses).

(b) Analysis by time of use. Identify seasonal vari- completely satisfy water supply objectives should also

ations in use for each of the above sectors and

maximum day use for the system for each season.

(c) Related factors analysis. (1) Identify the determinants of demand for each sector. Use such determinants as price of water and sewer service;

income; number and type of housing units and population per unit; industrial mix; and level of economic

activity. Explain the variable projection of these factors

as well as the extent to which they influence projection

of water use in various sectors.

(2) Determine the relationship expected to exist

between future levels of water use and the relevant

determinants of water demand. Develop and use a

forecast or forecasts of future levels of the determiand explain the choice of the particular forecast used.

(d) Aggregation of projections. Aggregate separate

projections for each sector to a single projection by time

period. (This should not, however, be viewed as a

deterrent to meeting the needs of each sector by

separate alternatives.)

2.2.8 Evaluation procedure: Identify the deficit 

between future water supplies and use.

Compare projected water use with future water

supplies to determine whether any deficits exist in the

study area. Make an analysis of the intensity, frequency,

and duration of the expected deficits. Address deficits in

three basic options: (a) reduce protected water use by

implementation of nonstructural or conservation

measures that are not part of the without-project

condition; (b) increase and/or more efficiently use water

supplies through structural measures; and (c) accept

and plan to manage water supply shortages. Plans

generally are formulated to include some or all of these

options.

2.2.9 Evaluation procedure: Identify alternative

without Federal plan.

Identify alternative plans that are likely to be im-

(a) Consideration of alternative plans is not limited to

those that would completely eliminate the projected gap

between supply and demand. Plans that do not

be considered. Include in such plans measures to

minimize and allocate shortages when they occur

(drought management measures). Balance the

increased risk of occasional shortages against the

savings from lesser investments that would increase the

probability of occasional shortages. The costs of

shortages include the costs of implementing drought

management measures and the costs of related public

health and safety measures.

(b) Alternative plans need not be based on the

development of a single source of supply at one time.

They may consist of the development of a single source

or the conjunctive development of several sources with

increments phased to match anticipated growth in water

use.
24

(c) If institutional obstacles to implementation Federal water supply plan. In this case, the benefit

are noted, the plan should still be considered if the may be considered equal to the cost of the

barriers are substantially within the power of the separable M&I facilities plus an appropriate share of

affected water users to correct. Inched a detailed the remaining joint cost of the project. Provide

description of the institutional obstacles. with a dis- documentation of the without-project condition.

cussion of the basis for any conclusion that the obstacles cannot be overcome.

2.2.10 Evaluation procedure: Rank and display

the alternative plans based on least cost

analysis.

(a) Rank all of the alternatives in order from the

highest cost alternative to the lowest. Calculate the

annualized costs of the alternatives on the basis of

the service (depreciable) life of the facility or the

paroled of analysis. whichever is less.

(b) Calculate costs of the alternatives on the following basis: (1) Annualize all costs charged to the

alternative on the basis of the Federal discount

rate; (2) no costs for taxes or insurance should be

charged to the alternative; and (3) all other assumptions and procedures used in calculating the

costs of the alternatives, including external

diseconomies, should be parallel to those

employed in calculating the costs for the proposed

Federal project.

2.2.11 Evaluation procedure: Identify the most

likely alternative

Begin identification of the most likely alternative industrial water supplies. Tables 1 and 2

with the least costly. If an alternative with a lesser summarize by time period (and season, if

cost is passed over for a more expansive one, applicable) the projected use by sector. projected

present the justification for not selecting the lower supply by source, and the difference between the

cost plan. two for average day and maximum day,

2.2.12 Evaluation procedure: Compute M&l alternative by time period (and season, if

water supply annualized benefits applicable).

(a) Annualized benefits of the Federal water

supply plan are equal to the annualized cost of the

most likely alternative. When applicable, the

evaluation should reflect differences in treatment,

distribution, and other costs compared to the most

likely alternative.

(b) The alternative cost of providing a water

supply for smaller communities (population of

10,000 or less) may be extremely expensive on a

per capita basis because these communities lack

the efficiencies of large-scale development. If such

communities are not able to afford an alternative

water supply comparable to the Federal water

supply plan as identified in the procedure

described above. that alternative should not be

used as the basis for evaluating the benefits of the

2.2.13 Evaluation procedure: Problems in the 

application.

(a) Two major problems exist in the application of

this procedure. The first is identification of the value

of conservation and other nonstructural measures.

Examples of evaluation of conservation strategies.

pricing methods, and drought management measures are available in technical publications.

(b) A second major problem will arise over the

desegregation of water use by sectors. Some communities do not collect water use data by sectors.

Where the system is fully metered, such data can

be obtained by coding customer accounts and accumulating data on use for at least one year. Water

use by unmetered customers may be estimated by

extrapolating experience with similar metered systems, recognizing that unmetered customers face a

price of zero. Verify that data and/or forecasts obtained from all sources are reliable and reasonable.

2.2.14 Report and display procedures.

Tables 2.2.14-1, 2, and 3 are suggested

presentations for reports that include municipal and

respectively. Table 3 shows the costs of alternative

plans and the quantity supplied under each

Table 2.2.14-1—M&I Water Supplies—Without

Project Condition—Average Day Use and

Capacity

Projected average day water use 1

 Time period 2

P1 P2 P3 PN

Residential (mgd) .................. ......... ........ ........ ........

Commercial (mgd).................. ......... ........ ........ ........

Industrial (mgd) ..................... ......... ........ ........ ........

Additional (includes public

 services and unaccounted for

 losses) (mgd)....................... ......... ........ ........ ........

 Total ............................ ......... ........ ........ ........

Average day water supply

 capacity without a plan: ......... ........ ........ ........

 Source 1 (mgd) .................... ......... ........ ........ ........

 Source 2 (mgd) .................... ......... ........ ........ ........
25

Table 2.2.14-1. M&I Water Supplies -Without Project Table 2.2.14-3—M&I Water Supply Alternatives

Condition-Average Day Use and Capacity (continued)

Projected average day water use 1 Time period 2

P1 P2 P3 PN

Source 3 (mgd) ...................... ......... ......... ......... .........

Source X (mgd)....................... ......... ......... ......... .........

 Total ...........................

......... ......... ......... .........

Difference between projected

 average day water use and

 supply without a plan (mgd) ..... ......... ......... ......... .........

 Include effects of nonstructural and conservative measures. 1

Show by time period and season where there are 2 

seasonal variations, e.g.

P 1

W S S F

Table 2.2.14-2. M&I Water Supplies -Without Project

Condition- Maximum Day Use and Capacity

Projected average day water use 1 Time period 2

P1 P2 P P

3 N

Residential (mgd) ................. ........... ......... ......... .........

Commercial (mgd)................. ........... ......... ......... .........

Industrial (mgd) ................... ........... ......... ......... .........

Additional (includes public

 services and unaccounted for

 losses) (mgd)....................... ........... ......... ......... .........

 Total ........................ ........... ......... ......... .........

Average day water supply capacity

without a plan:

 Source 1 (mgd) .................... ........... ......... ......... .........

 Source 2 (mgd) .................... ........... ......... ......... .........

 Source 3 (mgd) .................... ........... ......... ......... .........

 Source X (mgd) ................... ........... ......... ......... .........

 Total

Difference between projected

average day water use and supply

without a plan (mgd) .... ........... ......... ......... .........

 Include effects of nonstructural and conservative measures. 1

Show by time period and season where there are seasonal

2

variations, e.g.

 

P1

W S S F

[Period of analysis, price level, discount rate] 

Alternatives

Annualized

cost (in

thousands of

dollars)

Quantity supplied (mgd)

time period1

P 1

P P 2 3

PN

Most likely alternative .................... ............ ....................................

Recommended plan .................... ............ ....................................

Other plans .................... ............ ....................................

Show by time period and season where there are seasonal

1

variations

Section III—NED Benefit Evaluation

Procedures: Agriculture

2.3.1 Introduction.

This section provides procedures for the evaluation of agricultural benefits from water resources

plans. The benefits attributable to flood damage reduction, drainage, irrigation, erosion control and

sediment reduction should be evaluated separately

to the extent practical.

2.3.2 Conceptual basis.

(a)NED Benefits. The NED benefits are the value

of increases in the agricultural output of the Nation

and the cost savings in maintaining a given level of

output. The benefits include reductions in production

costs and in associated costs; reduction in damage

costs from floods, erosion, sedimentation,

inadequate drainage, or inadequate water supply;

the value of increased production of crops; and the

economic efficiency of increasing the production of

crops in the project area.

(b) Basic and Other Crops. (1) Basic crops (rice,

cotton, corn, soybeans, wheat, milo, barley, oats,

hay, and pasture) are crops that are grown throughout the United States in quantities such that no water

resources project would affect the price and thus

cause transfers of crop production from one area to

another. The production of basic crops is limited

primarily by the availability of suitable land.

(2) On a national basis, production of crops other

than basic crops is seldom limited by the availability

of suitable land. Rather, production is generally limited by market demand, risk aversion, and supply

factors other than suitable land. Thus, production

from increased acreage of crops other than basic

crops in the project area would be offset by a

decrease in production elsewhere. In some parts of

the Nation analysis of local conditions may indicate

that the production of other crops is limited by the

availability of suitable land. (Suitable land is land on

which crops can be grown profitably under prevailing
26

market conditions.) In this case, crops other than that are identical except for the provision of improved

basic crops listed above may also be treated as water conditions reflects the present value of the

basic crops when measuring intensification additional net income (i.e., the intensification benefit)

benefits by farm budget analysis. (See Section

2.3.5(d) to determine when other crops may be

treated as basic crops.)

(c) Benefit categories. Agricultural benefits are

divided into two mutually exclusive categories, depending on whether there is a change in cropping

pattern:

(1) damage reduction benefits, that is, benefits

that accrue on lands where there is no change in

cropping pattern between the with- and

without-project conditions; and

(2) intensification benefits, that is, benefits that

accrue on lands where there is no change in

cropping pattern. There is also a subcategory of

intensification benefits called efficiency benefits,

which accrue from reduced costs of production.

(d) Measurement of NED benefits. (1) Damage

reduction benefits. Damage reduction benefits are

the increases in net income due to the plan, as

measured by farm budget analysis. These income

increases may result from increased crop yields

and decreased production costs.

(2) Intensification benefits. Intensification benefits

are measured either by farm budget analysis or by

land value analysis. Intensification benefits from increased acreage of basic crops and other crops

that are constrained by the availability of suitable

land in the WRC assessment subarea (ASA) are

measured as the net value of the increased

production. Intensification benefits from increased

acreage of other crops (except for acreage of

crops to be treated as basic crops because they

are land constrained) result when there are

production cost savings. These production cost

savings are called efficiency benefits and are

measured as the difference between production

costs in the project area and production costs on

land elsewhere in the ASA.

(i) Farm budget analysis. On land where the intensification benefit is solely from increased acreage of basic crops (and crops to be treated as

basic crops), benefits are measured as the change

in net income (see Section 2.3.5(d) through (g)).

On land where the intensification benefit is from increased acreage of other crops, use the efficiency

procedure found in section 2.3.5(h).

 (ii) Land value analysis. Intensification benefits

alternatively may be measured as the difference in

the value of benefiting lands with and without the

plan. The market value of a parcel of land reflects

the capitalized value of the expected net income

that can be derived from the land. Therefore, the

difference in market value of two parcels of land

that can be attributed to improved water

management or supply. (See Section 2.3.5(i).)

2.3.3 Evaluation Components.

Evaluation of the impact of water management

practices or control measures should consider the

following components:

(a) Cropping patterns. Project the most probable

cropping patterns expected to exist with and without

the project. If project measures are designed to

reduce damage or associated cost problems without

changing cropping patterns, project the current

cropping pattern into the future for both with- and

without-project conditions.

(b) Prices. Use normalized crop prices issued by

the Department of Agriculture to evaluate NED agricultural benefits; adjustments may be made to reflect quality changes caused by floods or drought.

For crops not covered above, statewide average

prices over the three previous years may be used.

(c) Production costs. (i) Analyze production costs

that can be expected to vary between the with- and

without-project conditions. These may include the

costs of equipment ownership and operation; production materials; labor and management; system

operation, maintenance, and replacement (OM&R);

and interest payments. If costs associated with project measures (e.g., on-farm drainage or water distribution costs) are included in the project cost

analysis, exclude them from production costs.

(ii) Value purchased inputs at current market

prices. Compute interest at the project discount rate.

Value all labor, whether operator, family, or hired, at

prevailing farm labor rates. Estimate management

cost on the basis of the type of farming operation.

The estimate normally is expected to be at least six

percent of the variable production cost (the cost of

equipment ownership and operation, production

materials and labor, but excluding the cost of land

and added capital improvements).

(d) Crop yields. Project current yields with average

management in the project area to selected time

periods. Adjust future yields to reflect relevant

physical changes (e.g., erosion, drainage, water

supply, and floodwater runoff) in soil and water

management conditions. Increases In yields due to

future improvements in technology may be included

in the evaluation when realization of these benefits is

dependent upon installation of the project. The costs

associated with these improvements in technology

should be accounted for in the analysis. Changes in

yields, both with and without the project, should be
27

projected consistently with the water management ated will depend on the number of alternative plans

and production practices accounted for in the

production cost analysis.

(e) Livestock production. In geographically

isolated areas increased livestock production may

depend on installation of the water resources project. Where this can be demonstrated, net income

from additional livestock production may be included as a benefit. The test for dependency is

whether the livestock feeds can economically be

transported into or out of the area. Benefits cannot

exceed the delivered cost of the livestock feed if it

were purchased for use in the project area. Such

purchase prices would automatically include the

costs of transporting the feeds into the area.

(f) Comparable lands. Comparable lands are

lands that have climate, aspect, slope, soil properties and water conditions similar to those of a given

category of lands benefiting from a plan.

(g) Land values. The market value of lands

method for estimating the economic benefits of alternative plans requires the involvement of

qualified land appraisers with local experience.

Use of this procedure is appropriate when:

(1) lands to be affected by the proposed alternative plan are comparable to lands elsewhere which

can be appraised;

(2) water resources conditions on comparable

lands are similar to those to be provided on lands

affected by an alternative plan, and they can be

identified and evaluated;

(3) current market data are used to determine

the value of capital improvements and other

factors when making adjustments for these factors

on comparable lands; and

(4) the estimated value of lands to be affected

by the plan is not changed by speculation that

Federal action is anticipated.

2.3.4 Planning setting.

(a) The without-project condition, including conservation measures, is the condition expected to

exist in the absence of an alternative plan.

(b) The with-project condition is the condition expected to exist with each alternative plan under

consideration.

(c) Agricultural income and production costs

should be determined for various conditions or

levels of land and water quantity and/or quality

use. (Include other resources associated with

changes in land and water quantity and/or quality.)

The level of use to be evaluated initially is the without-plan condition. Other levels of use to be evaluselected for analysis.

2.3.5 Evaluation procedure: Crops

This procedure is for the evaluation of benefits to

crop production that would accrue from an alternative plan. Steps in this procedure are summarized in

Figure 2.3.5.

(a) Step 1. Identify land use and cropping patterns

with and without a plan. This information is generally

developed for segments of the plan area with

significantly different characteristics. Collect

appropriate data about the current and historic

cropping patterns and yields in the project area.

When appropriate, collect similar data on other

areas with comparable soils to determine conditions

expected with alternative plans. Analyze trends and

expected changes for without-project conditions.

Project future cropping patterns and yields under

without-plan conditions. Include the effects of

conservation and structural and nonstructural

measures expected under existing programs. Project

future cropping patterns and yields for each

alternative plan. For analytical purposes, separate

land in the project area into two categories: lands on

which the cropping pattern is the same with and

without the plan; and lands on which there would be

a change in cropping pattern with the plan. To

estimate crop production benefits on lands where

there would be a change in cropping pattern, go to

Step 3. To estimate crop production benefits on

lands where there would not be a change in cropping

pattern, proceed with Step 2.

(b) Step 2. Determine damage reduction benefit.

For land on which the cropping pattern would not

change, determine the change in net income with

and without a plan. This is the damage reduction

benefit. Income increases may result from increased

crop yields and decreased production costs. They

are measured as reduced damage to crops from

excessive soil moisture, water inundation, drought

and erosion, and reduced costs associated with

using water and land resources for the production of

crops.

(i) Estimate reduced damage to crops from excessive soil moisture on the basis of the change in

frequency and duration of excessive soil moisture.

Estimate reduced damage to crops from water inundation on the basis of the change in frequency,

depth, and duration of inundation. Estimate reduced

damage from drought on the basis of the change in

frequency and duration of inadequate soil moisture

during the growing season. Estimate reduced

damage from erosion on the basis of the change in

land voiding from gully and stream bank erosion and

on the basis of the change in productivity losses from

floodplain scour, sheet erosion, over bank deposition, and swamping.
28

(ii) Estimate reduced costs associated with using by the availability of suitable land in the ASA and,

water and land resources for the production of therefore, treated as basic crops. Otherwise it can be

crops on the basis of the changes in the costs of inferred that production of other crops is not land

equipment ownership and operation; production constrained in the ASA. When the crops are not land

materials; labor and management; and system op- constrained, go to Step 8; otherwise, proceed with

eration, maintenance, and replacement. Step 5.

(iii) Use farm budget analysis to measure (e) Step 5. Determine limit on acreage of other

changes in net income from reduced damage to

crops and reduced costs of production.

(c) Step 3. Select evaluation method for estimating intensification benefits. For land on which the

cropping pattern would change, select either farm

budget analysis or land value analysis as the

method for measuring intensification benefits. If

land value analysis is selected, go to Step 9. If

farm budget analysis is selected, proceed with

Step 4.

(d) Step 4. Determine whether other crops are

to be treated as basic crops. If the change in

cropping pattern increases the acreage in

production of other crops and if it is believed that

the production of other crops is constrained by the

availability of suitable land, the following test may

be applied to determine whether these crops

should be treated as basic crops in the benefit

analysis. If the test is not applied, go to Step 8.

(1) Select a representative sample of farm operations on lands comparable to lands benefiting

from the project under with-project conditions.

(i) For each farm operation determine the

respective acreage of basic and other crops.

(ii) Use these data to compute the proportion of

other crop acreage to total crop acreage for each

farm.

(iii) Use farm budget analysis to identify the top

25 percent of farms in the representative sample in

terms of expected net income per acre.

(iv) The average of the proportions of other crop

acreage to total crop acreage for the top 25 percent of farm operations is defined as the ‘optimal

proportion.’ The optimal proportion for these farm

operations will reflect risk and uncertainty, returns

to management, and prevailing market conditions.

(2) If it can be demonstrated through standard

statistical tests that the optimal proportion is not

statistically different from the proportion computed

as the average of individual farm operation proportions for the complete sample, then the production

of other crops can be considered to be constrained

crops that may be treated as basic crop acreage. If

the production of the other crops is found to be

constrained by availability of suitable land in the ASA,

then multiply the acreage of comparable land in the

project area by the optimal proportion found in Step

4(1). This is the maximum acreage of other crops

that may be analyzed using the steps that apply to

basic crops (Steps 6 and 7). To analyze benefits for

any acreage of other crops in excess of this

maximum acreage, go to Step 8.

(f) Step 6. Project net value of agricultural production with and without the plan. Use information

from farm budget analysis to estimate the net value

of agricultural production under without-plan conditions. Estimate the net value of agricultural production associated with each of the alternative plans.

Account for variable costs related to production. Include non-project OM&R costs and associated costs

for each alternative plan.

(g) Step 7. Compute intensification benefits for

acreage of basic crops and other crops to be treated

as basic crops. Compute intensification benefits as

the change in net income between the

without-project condition and conditions with an alternative plan. Express these intensification benefits

in average annual equivalent terms. This completes

the analysis of benefits for lands with increased

acreage of basic crops and other crops that are to be

treated as basic crops.

(h) Step 8. Determine efficiency benefits. Compute efficiency benefits for acreage producing other

crops not treated as basic crops as the sum of:

(1) the difference between the cost of producing

the crops in the project area and the cost of producing them on other lands in the ASA; and

(2) the net income that would accrue from production of an appropriate mix of basic crops on those

other lands. Express this efficiency benefit in average

annual equivalent terms.

(i) Step 9. Land value analysis. When estimating

intensification benefits on the basis of land value

analysis, base appraisals on market values, not on

capitalized income values.
Identify land use and cropping pattern 

with and without plan (Step 1)

For land where cropping pattern 

does not change with plan.

Determine damage reduction 

benefits (Step 2)

For land where cropping pattern 

changes with plan.

Select evaluation method for 

intensification benefits (Step 3)

Use farm budget analysis to determine 

intensification benefits (Steps 4-8)

Use land value analysis to determine 

intensification benefits (Step 9)

Determine total 

crop benefit

(OR)

29

Figure 2.3.5 -- Flowchart of Agricultural Benefit

Evaluation Procedure: Crops
30

(1) Obtain appraisals of the current market value (ii) Determine damage to improvements. Gather

of lands that would benefit from the plan. These historical data on damages to other agricultural

lands should be divided into various categories properties, such as equipment, improvements, and

where values differ significantly. agricultural enterprises.

(2) Obtain and appropriately adjust appraisals of (iii) Determine average annual equivalent

non-project lands in the ASA that are comparable damage to improvements. Use appropriate data to

to lands in each category of project lands and that determine average annual equivalent damage to

have water conditions comparable to those that improvements. For example, use depth-damage

would result from each alternative plan. relationships for each reach, integrated with

(i) Adjust the value of these comparable lands

for facilities and other capital improvements that

are not present on project lands. For example,

subtract the current market value of improvements

such as investments in orchards. (b) Determine damage reduction benefits for as-

(ii) In the case of irrigation projects, add to the

appraised value of comparable lands the present

value of water costs incurred by the operator.

These water costs include both payments to outside suppliers and the cost of self-supplied water

Use the project discount rate to calculate the present value of these costs.

(iii) control for other factors that may affect the

value of land, such as kinds of crops grown, distance-to urban areas, availability of transportation

facilities, presence of utilities, zoning regulations,

and special property tax rates. This control may be

achieved by using totally comparable parcels of

lands; by collecting a sample large enough so that

differences will be averaged out; or by a statistical

means such as regression analysis.

(3) Subtract the value in (1) from the adjusted

value in (2). This is the intensification benefit.

(4) Annualize the intensification benefit found in

(3) at the project discount rate.

2.3.6 Evaluation procedure: Damage reduction

for other agricultural properties and

associated agricultural enterprises.

(a) Determine damage reduction for other

agricultural properties. The term ‘other agricultural

properties’ includes physical improvements

associated with various farm enterprises and the

agricultural community. Measure benefits to such

properties as reduction in damages in the future

with the project compared to without the project.

The following discussion identifies key analytical

steps in the evaluation. Benefits accrue through

alterations in water conditions or in altering the

susceptibility of the property to damage (e.g.,

flood-proofing).

(i) Inventory damageable improvements. Identify

the location, type, number, and value of other agricultural properties within the area that are subject

to damage. This information is most easily obtained

through interviews of farmers and field reconnaissance.

hydrologic data, to develop average annual flood

damages with and without the plan. Include

consideration of the frequency and duration of the

damage.

sociated agricultural enterprises. Associated

agricultural enterprises are economic activities that

may be affected by changed water supply or water

management conditions. Evaluate damages of this

type as reduced net income under without-project

and with-project conditions. An example of this type

of damage is delay in spring planting on flood free

lands because of flooding of access roads.

(c) Calculate average annual equivalent

benefits. The damage reduction benefit is the

difference between average annual equivalent

damages with and without the plan.

2.3.7 Evaluation procedure: Off-site sediment

 reduction.

Determine average annual equivalent sediment

damages by adding the costs in constant dollars of

removing sediment from roads, culverts, channels,

etc., over a representative period of time and dividing by the years of record. The difference in damages with and without the project is the benefit. Extending the useful life of an existing reservoir is another type of sediment reduction benefit. Discount

the net value of the extension to present values,

and amortize it over the project life. The increased

cost of providing goods and services (e.g., additional treatment costs for removing sediment from municipal water) can also be used to evaluate damages. Reductions in the costs of sediment removal

or water treatment provide the basis for assessing

benefits with the plan.

2.3.8 Evaluation procedures: Problems in

 application.

(a) Damage reduction benefits. Damage reduction benefits are measured by farm budget

analysis. Proper measurement of such benefits

requires accurate estimates of with- and

without-plan soil,. water, and land use conditions.

Changes in physical conditions take place at

different rates and over different time periods.

Analysis can be improved by projecting changes in
31

physical conditions to selected time periods, damages, that is, damages that would still occur

analyzing net income for the time periods, and with implementation of the plan.

converting net income for the time periods to an

average annual equivalent value. In farm budget

analysis, double counting can be avoided by taking

a holistic approach (including all soil, water and

land use conditions in a single farm budget

analysis).

(b) Determination of land constraint. Intensification benefits for other crops are measured either as fecting the values requires detailed knowledge of

a change in net income or as an efficiency gain de- local physical and financial conditions.

pending on whether there is an adequate supply of

suitable land in the region for growing crops other

than basic crops (that is, whether production is land (a) Interviews. Interviews with farmers and other

constrained). This determination requires a regional

(ASA) analysis of comparable lands. In order to

make this determination properly, care must be exercised to ensure that lands being evaluated are

fully comparable. Care must also be exercised in

order to obtain the proper determination of aggregate acreages of basic and other crops for the top

25 percent of the farms. (See Section 2.3.5(d) (1).)

(c) Benefit attribution. In flatland watersheds,

drainage and flood damage reduction benefits

cannot be separated analytically. Therefore, they

are arbitrarily allocated on a 50/50 basis. The value (b) Physical specialists. Agronomists and soil

of benefits in other categories is determined on the

basis of changes in physical conditions with and

without the plan. The benefits are assigned according to the following: the proportion of the change in

net income attributed to changes in soil moisture,

water inundation, drought and erosion; the proportion of land use changes attributed to each of the

above; and changes in production costs attributed

to each of the above. Except for the problem with

drainage and flood damage reduction in flatland

watersheds, benefits can be measured independently if proper assumptions are made to avoid

double counting. Double counting can be avoided

by making sure that total benefits measured independently do not exceed total benefits from a holistic farm budget analysis.

(d) Residual damages. In evaluating with-plan

conditions, care must be taken to consider residual 

(e) Land value analysis. Because proper land

value analysis is dependent on accurate appraisals,

the appraisals on which this analysis is based

Should be performed by qualified land appraisers.

Adjustment of appraised values of lands comparable to project lands to account for capital improvements, costs of water supply, and other factors af2.3.9 Evaluation procedure: Data sources.

area residents are important for most of the categories of benefits to be evaluated. Interviews should

not be confined to farmers in the project area. Data

collected outside the project area serves as a

comparative basis for estimating damages and

yields in the project area. Use only interview forms

approved by the Office of Management and

Budget. In the project report, the questionnaire and

a summary of responses should be compiled and

displayed in such a way as to prevent the disclosure of individual sources.

scientists can provide data to establish yield

estimates by soil type and the effects on production

of soil depletion or sediment deposition.

(c) Universities and Federal agencies. Many universities and the Department of Agriculture have

developed typical enterprise budgets that can be

modified to reflect conditions in the area being

studied.

(d) Land appraisers. Market values of project

lands and comparable lands should be provided by

qualified land appraisers.

2.3.10 Report and display procedures.

A clear presentation of the study results will facilitate review. Tables 2.3.10-1 and 2 are suggested

presentations.

Table 2.3.10-1 Summary of Crop Benefits

(Farm Budget Analysis Method)

Item Year Year Year Year Year Current

Year

Base Year a a a a a

Annualized

Valueb

Without Plan........................................ ............. .............. ........... ........... ........... ........... ........... ....................

 Acres:........................................... ............. .............. ........... ........... ........... ........... ........... ....................

 basic crops............................. ............. .............. ........... ........... ........... ........... ........... ....................

 other crops............................. ............. .............. ........... ........... ........... ........... ........... ....................

 Value of agriculture production.... ............. .............. ........... ........... ........... ........... ........... ....................
32

Table 2.3.10-1 Summary of Crop Benefits - Continued

(Farm Budget Analysis Method)

Item Year Year Year Year Year Current Annualized

Year Value

Base

Year a a a a a

b

Agricultural production costs............... ............. .............. ........... ........... ........... ........... ........... ....................

With Plan

 Acres:

 basic crops ............................ ............. .............. ........... ........... ........... ........... ........... ....................

 other crops ............................ ............. .............. ........... ........... ........... ........... ........... ....................

 Value of agricultural production ............. .............. ........... ........... ........... ........... ........... ....................

Agricultural production costs .............. ............. .............. ........... ........... ........... ........... ........... ....................

 NED BENEFITS ......... ............. .............. ........... ........... ........... ........... ........... ....................

Annual value at the given year a Annualized at - - percent discount rate b 

Table 2.3.10-2 Intensification Benefits benefit is realized only to the extent that removal of

(Land Value Analysis Method)

Item Current Year Annualizeda

With Plan

 Value of agricultural land ....... ................ ................

With plan

 Value of agricultural land ....... ................ ................

INTENSIFICATION BENEFIT ..... ................ ................

 Annualized at -- percent discount rate. a 

Section IV—NED Benefit Evaluation 

Procedures: Urban Flood Damage

2.4.1 Introduction.

This chapter presents the procedure for measuring the beneficial contributions to national economic development (NED) associated with the urban

flood hazard reduction features of water resource

plans and projects.

2.4.2 Conceptual basis.

(a) General. Benefits from plans for reducing

flood hazards accrue primarily through the reduction in actual or potential damages associated with

land use.

(b) Benefit categories. While there is only one

benefit standard, there are three benefit categories,

reflecting three different responses to a flood

hazard reduction plan.

 (1) Inundation reduction benefit. If floodplain use

is the same with and without the plan, the benefit is

the increased net income generated by that use. If

an activity is removed from the floodplain, this

the activity increases the net income of other activities in the economy.

(2) Intensification benefit. If the type of

floodplain use is unchanged but the method of

operation is modified because of the plan, the

benefit is the increased net income generated by

the floodplain activity.

(3) Location benefit. If an activity is added to the

floodplain because of a plan, the benefit is the difference between aggregate net incomes (including

economic rent) in the economically affected area

with and without the plan.

(c) Types of flood damage. Flood damages are

classified as physical damages or losses, income

losses, and emergency costs. Each activity affected

by a flood experiences losses in one or more of

these classes.

(1) Physical damages. Physical damages

include damages to or total loss of buildings or

parts of buildings; loss of contents, including

furnishings, equipment, decorations, raw materials,

materials in process, and completed products; loss

of roads, sewers, bridges, power lines, etc.

(2) Income loss. Loss of wages or net profits to

business over and above physical flood damages

usually results from a disruption of normal activities.

Estimates of this loss must be derived from specific

independent economic data for the interests and

properties affected. Prevention of income loss results in a contribution to national economic development only to the extent that such loss cannot be

compensated for by postponement of an activity or

transfer of the activity to other establishments.

(3) Emergency costs. Emergency costs include

those expenses resulting from a flood that would not

otherwise be incurred, such as the costs of

evacuation and reoccupation, flood fighting, and
33

disaster relief; increased costs of normal operations (3) Executive Orders. Compliance with E.O.

during the flood; and increased costs of police, fire,

or military patrol. Emergency costs should be determined by specific survey or research and should not

be estimated by applying arbitrary percentages to the

physical damage estimates.

2.4.3 Planning setting.

 (a) General. The benefit of flood hazard reduction

plans is determined by comparison of the with- and

without-project conditions.

(b) Without-project condition. The without-project 

condition is the land use and related conditions likely

to occur under existing improvements, laws, and

policies. There are three significant assumptions

inherent in this definition:

(1) Existing and authorized plans. Existing flood

hazard reduction plans are considered to be in

place, with careful consideration given to the actual

remaining economic life of existing structures. Flood

hazard plans authorized for implementation but not

yet constructed are evaluated according to the

relative likelihood of actual construction. If there is a

high likelihood of construction, the authorized plan is

considered to be in place.

(2) Flood Disaster Protection Act. The adoption

and enforcement of land use regulations pursuant to

the Flood Disaster Protection Act of 1973 (Pub. L.

93-234) is assumed.

(i) Regulation certified or near certification. If the

local land use regulation has been or will be

certified, partially waived, or adjusted by the Flood

Insurance Administration (FIA) as adequate under 24

CFR 1910.3 (c) and/or (d) and 24 CFR 1910.5, that

regulation defines the without-project condition. 

(ii) Regulation not yet certified. It is assumed that

the local jurisdiction will adopt in the near future land

use regulations certifiable to FIA under the

without-project condition as a datum and under the

with-project condition if a residual hazard will remain.

This applies to floodplains regulated under 24 CFR

1910.3 (a) and (b); to floodplains regulated by local

ordinances independent of FIA; and to floodplains

with no flood regulation in effect. For revenue

situations, the following two crucial features are

included: no future confinement or obstruction of the

regulatory floodway; and no future occupancy of the

flood fringe unless residences are elevated to or

above the 100-year flood level and nonresidences

are floodproofed to that level.

(iii) Application. It is assumed that floodproofing

costs will be incurred if an activity decides to locate in

the floodplain.

11988, Floodplain Management and E.O. 11990,

Protection of Wetlands, is assumed.

(4) Individual actions. In addition to the three

assumptions stated in paragraphs (b) (1), (2), and

(3) of this section, the analyst shall consider the

likelihood that individuals will undertake certain flood

hazard reduction measures, such as flood proofing,

when the cost of such measures is reasonable

compared to the costs of potential flood damages.

(c) With-project condition. The with-project

condition is the most likely condition expected to exist

in the future if a specific project is undertaken. There

are as many with-project conditions as there are alternative projects.

(1) In projecting a with-project condition, the analyst must be sensitive to the relationship between

land use and the characteristics of the flood hazard

for the alternative project being analyzed.

(2) The same assumptions underlie the with-project and without-project conditions.

(3) Consideration should be given to both structural and nonstructural alternatives and to alternatives incorporating a mix of structural and nonstructural measures. Nonstructural measures include:

(i) Reducing susceptibility to flood damage by

land use regulations, redevelopment and relocation

policies, disaster preparedness, flood proofing, flood

forecasting and warning systems, floodplain

information, floodplain acquisition and easements;

and

(ii) On-site detention of flood waters by protection

of natural storage areas such as wetlands or in

manmade areas such as building roofs and parking

lots.

(4) Since project alternatives can differ in their

timing as well as in their physical characteristics, the

optimal timing of projects and of individual project

features should be considered in project formulation.

2.4.4 Evaluation procedure: General.

Ten steps are involved in computing benefits (see

Figure 2.4.4). The steps are designed primarily to

determine land use and to relate use to the flood

hazard from a NED perspective. The level of effort

expended on each step depends on the nature of the

proposed improvement and on the sensitivity of

project formulation and justification to further refinement. The first five steps result in a determination of

future land use; emphasis is on evaluating the

overall reasonableness of local land use plans with

respect to (a) OBERS and other larger area data,

and (b) recognition of the flood hazard.
Delineate the affected area

Determine floodplain characteristics Forecast activities in affected area

Determine existing flood damages Estimate potential land use

Estimate other flood-related costs Estimate future flood damages

Allocate land use

Collect market value data

Compute benefits

34

Figure 2.4.4—Flowchart of Urban Flood

Damage Benefit Evaluation Procedures
35

2.4.5 Evaluation procedure: Step 1—Delineate water supply, waste disposal, and sand, mineral, and

 affected area.

The area affected by a proposed plan consists of

the floodplain plus all other nearby areas likely to

serve as alternative sites for any major type of activity

that might use the floodplain if it were protected; one

example of a major activity-type is commercial. If the

potential use of the floodplain includes industrial use

within a standard metropolitan statistical area

(SMSA), the entire SMSA is the affected area; for

residential use, even within an SMSA, a much

smaller area may be designated the affected area.

2.4.6 Evaluation procedure: Step 2—Determine

 floodplain characteristics.

The existing characteristics of the floodplain must

be determined before its actual use can be estimated; therefore, undertake an inventory of the floodplain to determine those characteristics that make it

attractive or unattractive for the land use demands

established in steps 3 and 4, with emphasis on

those characteristics that distinguish the floodplain

from other portions of the affected area. Use the

following categorizations as a guide:

(a) Inherent characteristics of a floodplain. Floodplain characteristics may include:

(1) Flooding. Describe the flood situation, including

a designation of high hazard areas. The description

should include characteristics of the flooding, such

as depths, velocity, duration, and debris content;

area flooded by floods of selected frequencies,

including 100-year frequency; historical floods, and,

where applicable, larger floods.

(2) Floodway, natural storage. Describe and delineate those areas which, if urbanized or structurally potential land use.

protected, would affect natural storage, velocity, or

stage, or would affect flood flows elsewhere.

(3) Natural and beneficial values, including open

space, recreation, wildlife, and wetlands. Many

floodplains, particularly those near urban areas, are

potential recreation, open space, wetland, or wildlife

preserves. The potential of the floodplain for these

purposes should be recognized and present

(4) Transportation. Floodplains near navigable

streams have inherent attractiveness for industries

that demand water-oriented transportation. Floodplains also serve as sites for railroads, highways,

pipelines, and related facilities that are not susceptible to serious flood damage but have a tendency to

attract Industry to the area.

(5) Other attributes. Other Inherent attributes of

floodplains may include soil fertility, reliability of

gravel deposits.

(b) Physical characteristics. Describe

pertinent physical characteristics, including slope,

soil types, and water table.

(c) Available services. Most activities require

some or all of the following services: transportation

(highway and rail), power, sewerage, water, labor,

and access to markets. Indicate the availability of

such services in or near the floodplain, including

comparisons with similar services available in other

portions of the affected area.

(d) Existing activities. Include in the inventory

of the floodplain a list of existing activity types, the

number of acres, and the density, age, and value of

structure for each activity-type by flood hazard zone.

2.4.7 Evaluation procedure: Step 3—Project 

 activities in affected area.

Base economic and demographic projections

on the most recent available studies and include the

following: population, personal income, recreation

demand, and manufacturing, employment, and

output. Additional projections may be necessary for

any given area, depending on the potential uses of

the floodplain and the sensitivity of the plan to these

projections. Base projections on assessment of

trends in larger areas and appropriate data (e.g.,

OBERS); the relationship of historical data for the

affected area to trends projected for larger areas;

and consultation with knowledgeable local officials,

planners, and others. The basis for the projections

should be clearly specified in the report.

2.4.8 Evaluation procedure: Step 4—Estimate

Estimate potential land use within the affected

area by converting demographic projections to

acres. The conversion factors can normally be derived from published secondary sources, from

agency studies of similar areas, or from empirical

and secondary data available in the affected area.

The categories of potential land use need be only as

detailed as necessary to reflect the incidence of the

flood hazard and to establish the benefits derived

from a plan.

2.4.9 Evaluation procedure: Step 5—Project

land use.

Allocate land use demand to floodplain and nonfloodplain lands for the without-project condition and

for each alternative floodplain management plan.
36

(a) Basic factors. Base the allocation on a com- determine land use and associated damages for

parison of the floodplain characteristics, the characteristics sought by potential occupants, and the

availability of sought-after characteristics in the

non-floodplain portions of the affected area.

(b) Criteria. The floodplain should not be used

unless it has characteristics that give it a significant

economic advantage to the potential user over all

other available sites within the affected area. If such

advantages exist, determine whether they overcome

potential flood losses, potential flood proofing costs,

and the costs of other related hazards. Flood losses

and costs should be specific to the zone of the

floodplain being considered.

2.4.10 Evaluation procedure: Step 6—Determine

 existing flood damages.

Existing flood damages are the potential average

annual dollar damages to activities affected by

flooding at the time of the study. Existing damages

are those expressed for a given magnitude of flooding or computed in the damage frequency process.

No projection is involved. The basis for the determination of existing damages is losses actually sustained in historical floods; therefore, specify the year

and month of all significant recorded discharges

above zero point of damage and indicate the

damages actually sustained by reach or zone and

type of property and activity. Historical data are often

incomplete; urbanization and other changes will

have occurred over the years. Many streams and (c) Projection of physical damages. Base meareaches do not have gaging stations. Therefore, data

on historical flood losses should be carefully

scrutinized and supplemented by appraisals, use of

area depth-damage curves, and an inventory of

capital investment within the floodplain. Further,

estimates of damages under existing conditions

should be computed for floods of magnitude that

have not historically occurred. Estimate average

annual losses by using standard damage-frequency

integration techniques and computer programs that

relate hydrologic flood variables such as discharge

and stage to damages and to the probability of occurrence of such variables. Annual hydrologic data

are normally sufficient for urban drainage estimates.

Access flood damages by activity-type and by

whether they are borne by the owner or by the public

at large.

2.4.11 Evaluation procedure: Step 7—Project

 future flood damages.

Future flood damages are the dollar damages to

economic activities identified in step 3 that might use

the floodplain in the future in the absence of a plan.

Use this step in combination with step 5 (land use) to

each future with-project and without-project

condition. “Future” is any time period after the year in

which the study is completed; in order to relate costs

ultimately to benefits, however, future damages must

be discounted to the base year. Determine future

flood damages on the basis of losses sustained both

by the floodplain occupant and by others through

insurance subsidies, tax deductions for casualty

losses, disaster relief, etc.

(a) Hydrologic changes. Changes in basin land

use may result in major alteration of drainage characteristics, particularly surface runoff; project such

hydrologic changes for the planning period. Average

future hydrologic conditions should not be used,

since they obscure situations in which the level of

protection afforded by a project may be significantly

different from average conditions by the end of the

planning period.

(b) Economic changes. Economic changes can

be expected to result in a change in the level of

future flood losses. A benefit-cost ratio for the existing condition should always be shown. If the ratio is

greater than 1:1, the projection of future benefits

may be accomplished in abbreviated form unless it

would distort the comparison of alternative projects

or the cost allocation and cost sharing in multiple

purpose projects. In the latter situation, the detail and

accuracy of the estimates of flood control benefits

should be comparable to the estimates of benefits

for other water resources purposes.

surement and projection of flood damages on the

establishment of actual, observed relationships between damages, flood characteristics, and those indicators used for measurement and projection.

These relationships should be modified as appropriate by consideration of constraints that change the

historically derived relationship between flood damages and a given indicator. The relationships should

be made explicit in the report and their accuracy and

representativeness supported, to the extent possible,

by empirical evidence. Use three steps in measuring

flood damages for a future year: estimate the

number and size of physical units; estimate the

future value of units; and determine the damage

susceptibility of units.

(1) Physical units. The first step in measuring

flood damages for a future year is to determine from

step 2 (2.4.6) the number and size of physical units

with potential to use the floodplain by hazard zones

for each activity type. Care must be taken to

determine whether existing structures will continue to

occupy the floodplain over the period of analysis

and, if not, the future land use and damage potential

of new structures.
37

(2) Value per physical unit. This step involves es- 2.4.12 Evaluation procedure: Step 8—

timating future unit value. Increases in the value of

property in the floodplain may result from the expansion of existing facilities or the construction of

new units. The following guidance applying to content value is derived from an empirical study of

flood-prone property:

(i) Existing development. Use the OBERS

regional growth rate for per capita income as the

basis for increasing the real value of residential

contents in the future.

(ii) Future development. Project the value of contents within new residential structures from the

year each unit is added.

(iii) Translation to future flood damages. Use the

projected rate of increase in the value of flood-susceptible household contents as the basis for increasing the future unit flood damage to

household contents.

(iv) Limit. The value of contents should not

exceed 75 percent of the structural value of the

residence unless an empirical study proves that a

special case exists (e.g., trailer parks), nor should

the increase in value of household contents be

projected beyond project year 50. property may be configured in a different way with

(v) Commercial and industrial property. The procedure described for residential contents does not

apply to commercial and industrial categories.

(3) Damage susceptibility. The third step in

measuring future flood damages is to determine

the damage susceptibility of units. Once the

number of physical units and the value associated

with each unit are known, examine possible future

changes, if any, in damage susceptibility

relationships as a function of the total value of

each physical unit and the stream's flood

characteristics. such as velocity, depth, duration,

volume, debris load, and salinity. Some of the

determinants of damage susceptibility are type of

activity, vertical development, location within the

floodplain, nature of flood proofing, construction

material used, and individual response.

(d) Projection of income losses. Income losses

may be projected to increase on the basis of projected land use. Increases in physical losses

should not be used to project income losses.

(e) Projection of emergency costs. Emergency with protection. The flood-free land should be

costs encompass a wide variety of programs.

Some, such as emergency shelter and food, are characteristics.

primarily a function of occupancy of the floodplain

but not of the value of development in the floodplain. Emergency costs should not be projected to

increase as a direct function of physical losses.

Determine other costs of using the floodplain.

The impact of flooding on existing and

potential future occupants is not limited to flood

losses. Some of the impacts are intangible but

others can be translated into NED losses. These

latter include the following:

(a) Flood proofing costs. High flood hazards

lead to high flood costs. Therefore, compute the

flood proofing costs of different activity-types and

different flood hazard zones.

(b) National flood insurance costs. A national

cost of the flood insurance program is its administration. The cost of servicing flood insurance policies in effect at the time of the study is the average

cost per policy, including agent commission, and

the costs of servicing and claims adjusting. FIA

should be contacted to obtain these costs.

(c) Modified use. In some cases, the flood

hazard has caused structures to be used less

efficiently than they would be with a project. For

example, the first floor of garden apartments may

not be rented because of a flood hazard, or

the plan compared to without a plan.

2.4.13 Evaluation procedure: Step 9—Collect

land market value and related data.

If land use is different with and without the

project, compute the difference in income for the

land. This is generally accomplished by using land

market value data. Provide supporting data in the

situations described in paragraphs (a) through (d)

of this section.

(a) Land use is different with project. If land

use is different with compared to without the

project, collect the following data as appropriate to

complete step 10.

(1) Comparable value. If the plan does not

result in a major addition to the supply of land in

the area, the value with protection is the market

value of comparable flood-free land. If the plan

results in a major addition to the supply of land, the

effect on the price of land should be taken into

account in estimating the value of floodplain lands

comparable in terms of physical and infrastructural
38

(2) Existing value. Use the value of nearby because the current market value of land

floodplain sites or, as appropriate, the current value theoretically captures the expected stream of income

of the floodplain. In either case, report the current over time.

and, if available, past market values of the floodplain.

Use actual market values, not capitalized income

values. Therefore, it should not be assumed that the

value of land being used for agriculture in an urban or

urbanizing situation is the capitalized value of

agricultural returns or that any value higher than that

is due to speculation that a Federal program will be

constructed or lack of knowledge. On the contrary,

without-project land values in excess of agricultural

land values should be expected, reflecting the

probability of future use as well as existing and

anticipated infrastructural investments.

(3) Net income data. The net income (earned) with

a project may be estimated directly based on an

analysis of a specific land use with the project. This

approach would be used, for example, for lands to

be developed for recreation; the projected recreation

benefits would constitute the gross income earned on

the floodplain and would be shown as a project

benefit.

(4) Encumbered title market value. Estimate the

market value of land with an encumbered title for

inclusion as a benefit in step 10 in situations in which

the floodplain is to be evacuated, no specific public

use is planned, and the land could be resold with an

encumbered title (which would ensure that future

uses would be consistent with Executive Order

11988— Floodplain Management, May 24, 1977).

(b) Land use is same but more intense with project. If land use is the same but more intense, as

when an activity's use of the floodplain is modified as

a result of the project, base determination of the

increase in income on increased land values or direct

computation of costs and revenues.

(c) Evacuation plan. In the case of an evacuation

plan, changes in market value of properties adjacent

to a restored floodplain may reflect recreation or

open-space benefits to occupants of those properties. Document such an NED benefit by empirical

evidence. Care must be taken to avoid double

counting of benefits.

(d) Market value is lowered by flood hazard. If the

market value of existing structures and land is lower

because of the flood hazard, restoration of the

market value represents a quantification of otherwise

intangible benefits. In such cases, the benefit is the

difference between increased market value and that

portion of increased market value attributable to

reductions in flood damages. Careful attention should

be given to ensuring that factors not related to the

flood hazard are not included as project benefits.

(e) No projected increase in market value. Projected increase in the market value of land over the

project life with and without a plan should not be

used to measure flood hazard reduction benefits

2.4.14 Evaluation procedure: Step 10—Compute

 NED benefits.

At this point in the analysis, enough information

is available to compute NED benefits for structural

and nonstructural measures. Table 2.4.14 displays

the types of benefits claimable for three of the major

flood hazard reduction measures and the steps in

this procedure that provide the necessary data. The

table applies generally; specific cases may vary.

Discount and annualize all benefits at the appropriate

discount rate to the beginning of the period of

analysis. Benefits are categorized in the following

way:

Table 2.4.14— Guide to Types of Benefits

Type of benefit 

(And step) Structural Evacuation Floodproofing

Inundation

 Incidental flood Claimable Claimable Claimable

 damages 

 (step 6)

 Primary flood Claimable Claimable Not 

 damages claimable

 (step 6)

 Floodproofing Claimable Not Not 

 costs reduced claimable claimable

 (step 7)

 Reduction in Claimable Claimable Claimable

 insurance 

 overhead 

 (step 7)

 Restoration of Claimable Claimable Not 

 land value claimable

 (step 9)

Intensification Claimable Claimable Not 

(steps 7 and 9) claimable

Location

 Difference in use Claimable Claimable Not 

 (step 9) claimable

 New use Not Not Claimable

 (step 9) claimable claimable

 Encumbered title Not Not Claimable

 (step 9) claimable claimable

 Open space Not Not Claimable

 (step 9) claimable claimable

(a) Inundation reduction benefits. To the extent

that step 5 indicates that land use is the same with

and without the project, the benefit is the difference

in flood damages with and without the project (step

7), plus the reduction in flood proofing costs (step 8),

plus the reduction in insurance overhead (step 8),

plus the restoration of land values in certain circumstances (step 9). To the extent that step 5 indicates a difference in land use for an evacuation

plan the benefit is the reduction in externalized
39

costs of floodplain occupancy that are typically 2.4.15 Evaluation procedure: Problems in

borne by taxpayers or firms providing services to

floodplain activities. Examples of such costs are

subsidized flood insurance; casualty income tax There are four major problem areas in

deductions; flood emergency costs; and flood computing flood hazard reduction benefits:

damages to utility, transportation, and

communication systems. Reduction of costs not

borne by the floodplain activities may be a major

benefit of projects to evacuate or relocate

floodplain activities. Reduction of flood damages

borne by floodplain activities should not be claimed

as a benefit of evacuation or relocation because

they are already accounted for in the fair market

value of floodplain properties.

 (1) Benefit from saving insurance costs. One

category of costs that can be avoided by a removal measured from the point of view of the firm or the

plan is public compensation for private flood dam- household, but care must be taken to avoid

ages through the subsidized Federal Flood Insur- double-counting. Loss of income because of idle

ance Program. Expressing savings in these exter- labor must be net of income to labor employed in

nalized costs as project benefits is appropriate for cleanup and repair of damages; unemployment

properties in communities that participate in the compensation and other transfer payments to idle

Federal Flood Insurance Program or are expected labor are not income from an NED perspective.

to participate under the without-project condition.

This benefit is the reduction of insurable flood

damages projected over the life of the project with

careful attention to the projected without-project

condition.

(2) Insurable flood damages. Base the projection

of insurable flood damages on traditional depth activity (without the proposed plan).

damage-frequency relationships used in projecting

total flood damages. Then reduce projected total

damages by subtracting: losses that are non insurable either because they are in non insurance loss

categories or because they exceed the coverage

limits of the subsidized program; the deductible

portion of each expected flood damage event; and

the annual cost of the insurance premium paid by

the policyholders. For this benefit calculation,

assume that all eligible parties purchase

subsidized insurance. This assumption is

appropriate because the market value of

properties, which determines project costs. reflects

the availability of the program, not the extent of its

utilization by current floodplain occupants.

(b) Intensification benefits. If step 5 indicates that

land uses are the same with and without the project but activity is more intense with the Project,

measure the benefit as the increase in market

value of land from step 9 or changes in direct

income from step 6. Care must be taken to avoid

double counting.

(c) Location benefits. If step 5 indicates that land

use is different with and without the project, meas- solely to increases in the number of structures

ure the benefit by the change in the net income or and/or shifts from one type of structure to another.

market value of the floodplain land and certain adjacent land where. for example, the plan creates

open space (step 9).

 application.

 

(a) Income losses. The loss of income by

commercial, industrial, and other business firms is

difficult to measure because of the complexity

involved in determining whether the loss is

recovered by the firm at another location or at a

later time. Direct interview and empirical post-flood

studies are the most appropriate data sources for

analyzing whether a real resource loss, such as

idle capital or decaying inventories. is involved.

The loss of income because of idle labor may be

(b) Intensification benefits. This category

of benefits is theoretically applicable to urban

situations, but there are to date few documented

case studies. This benefit cannot exceed the

increased flood damage potential when the

existing activity is compared to the intensified

(c) Risk. The analysis of response to a

flood hazard is based on a probability weighting of

floods of various magnitude. This implies that

floodplain occupants are risk-neutral, but many

occupants, individually or as a group, either avert

or accept risk. Therefore, responses to actual and

potential flood damages should be viewed broadly

in determining land use, mode of conducting

business, and even benefits. Explain any

significant deviations from expected behavior

based on actual or potential flood damages

computed on a risk-neutral basis.

(d) Sensitivity analyses. The report should

contain sensitivity analyses that present a range of

benefit levels representing data and assumptions

about which reasonable persons might differ.

Report the benefit level that is most probable;

present other levels for public information. If

increases in damages are based on increases in

value, conduct a sensitivity analysis of value per

structure under the alternate assumption that there

is no increase in the average value of structure or

contents and that increases in damages are due
40

2.4.16 Evaluation procedure: Data sources. acres by land-use type; disruption of essential services

The following summarizes problems associated with

two key data sources:

(a) Interviews. The primary use of personal interviews content, etc.; and other indicators pertinent to catastrophic

is to collect flood damage data, but interviews may also

be used to collect other necessary data not available

from secondary sources. Use only interview forms

approved by the Office of Management and Budget. Use

statistically sound techniques for selecting the interview

sample and for devising the questions. The questionnaire

and a summary of responses should be compiled and

displayed in the final report in a way that protects the

source of individual disclosures. Describe the errors and

uncertainty inherent in the sampling methods and

responses.

(b) Local land use plans. Local land use plans and current and future land use; and 100-year and other flood

zoning ordinances are valuable guides to future land use

in the floodplains but caution must be exercised in the

use of such plans and ordinances. First, the

demographic implications of local plans and ordinances

must be consistent with, or convincingly distinguished

from, trends in a larger area, e.g., OBERS. Second, a

local plan is not an acceptable projection for the

without-project condition if it ignores the flood hazard.

Third, the status, date, and likelihood of change of local

plans vary. Finally, local plans may not contain

sufficiently detailed information to be of direct use in

benefit analysis.

2.4.17 Report and display procedures.

Include in the report enough data to enable the

reviewer to follow the key steps above and, more

important, the underlying rationale for the project.

(a) Report procedures for risk and uncertainty. To

assist reviewers in assessing response to risk, summarize the following separately and display the information in tabular form:

(1) Remaining flood damage situations: Categorizations. The remaining damages are those expected to

occur even with a floodplain management plan in

operation. Remaining damages include:

(i) Damages to activities that would occupy the

floodplain with as well as without the plan;

(ii) Damages to activities that would occupy the

floodplain only with the plan; and

(iii) Increased damages to activities outside the

protected area with and without the plan. This includes

downstream flooding, if any, caused by the plan or

project.

(2) Flood with two-tenths of 1 percent of occurrence.

Fully describe the flood with two-tenths of 1 percent

chance of occurrence (500-year frequency) with and

without the plan. The report should contain, for example,

two-tenths of 1 percent flood damages; the number of

people and towns affected; the number of structures and

(e.g., water, power, fire protection, and sanitary services)

and distance to unaffected essential services; anticipated

warning time; flood depths, velocity, duration, debris

flooding.

(b) Summary tables. Summary tables 2.4.17-1 through

4 are suggested presentations for all reports that include

flood hazard reduction as a purpose. Other summary

tables. such as the displays presented in 2.4.5 through

2.4.15, may be necessary and pertinent. The summary

tables should include pertinent land use data for

computing not only NED benefits, but also environmental,

social, and regional impacts. Also present other floodplain

data pertinent to the evaluation on one or more maps:

Flood limits and depths with and without the project;

limits and depths.

Table 2.4.17—1 Summary of Annualized NED

Benefits and Costs for Alternative Projects

[Applicable discount rate: ——]

Project benefits and costs Alternatives

1 2 3 X

Flood hazard reduction

benefits:

 Inundation:

 Physical ............................. ......... ......... ......... .........

 Income ............................... ......... ......... ......... .........

 Emergency ........................ ......... ......... ......... .........

 Total ................................... ......... ......... ......... .........

Intensification ......... ......... ......... .........

Location:

 Floodplain ............................. ......... ......... ......... .........

 Off floodplain ......................... ......... ......... ......... .........

 Total ................................... ......... ......... ......... .........

Total Flood Benefits ................. ......... ......... ......... .........

 Benefits from other purposes ......... ......... ......... .........

Total project benefits ............... ......... ......... ......... .........

Project costs ............................ ......... ......... ......... .........

Net benefits ............................. ......... ......... ......... .........
41

Table 2.4.17—2 Flood Damages by Decade, Alternative Projects

[Applicable discount rate: — —]

Project

Time Period1

P0 P10 AAE P20,

 etc.

2

No. 1 ...................................................................................................................................................... ........................ .............. ..............

No. 2 ...................................................................................................................................................... ........................ .............. ..............

No. 3 ...................................................................................................................................................... ........................ .............. ..............

The designation P10 and P20 identify the 10th and 20th years, respectively, of project life. 1 

Average annual equivalent 2 

Table 2.4.17—3 Flood Damages by Decade Without Project

[Applicable discount rate: — —]

Property type Time Period1

P-50 P-40, etc. Existing P0 P10 PN AAE2

Residential:

 a (Subclassification of residential) ................... ................ .................. .................. ................. ................ ................. ................

 b ........................................................................ ................ .................. .................. ................. ................ ................. ................

 c ........................................................................ ................ .................. .................. ................. ................ ................. ................

Commercial ........................................................... ................ .................. .................. ................ ................ ................. ................

Industrial ............................................................... ................ .................. .................. ................ ................ ................. ................

Other .................................................................... ................ .................. .................. ................ ................ ................. ................

 Total .............................................................. ................ .................. .................. ................ ................ ................. ................

The designation P10 and P20 identify the tenth and twentieth years, respectively, of project life. P-50 is 1932, P-40 is 1942, etc. 1 

Average annual equivalent 2 

Table 2.4.17-4 Number of, Floodplain Without Project1

 Acres

Property type Existing

Time Period2

P0 P10 P20 P30 P40 P50 P100

Residential:

 a (Subclassification of rate residential

 units) ............. ........... ............ ............ ............ ............ ............ ............

 b ............................................................................ ............. ........... ............ ............ ............ ............ ............ ............

 c ............................................................................ ............. ........... ............ ............ ............ ............ ............ ............

Commercial ............................................................... ............. ........... ............ ............ ............ ............ ............ ............

Industrial .................................................................... ............. ........... ............ ............ ............ ............ ............ ............

Semipublic.................................................................. ............. ........... ............ ............ ............ ............ ............ ............

Transportation ........................................................... ............. ........... ............ ............ ............ ............ ............ ............

 Comparable tables may be made for all alternatives, if pertinent. 1 

The designations P10 and P20 identify the 10th and 20th years, respectively, of project life. 2 

Section V—NED Benefit Evaluation

Procedures: Power (Hydropower)

2.5.1 Introduction.

This section describes procedures for the evaluation of national economic development (NED)

benefits of hydropower features of water resources

projects and plans. These features include single--

purpose hydropower, the inclusion of hydropower as

a function in new multipurpose projects, addition of

power-generating facilities to existing water resource

projects, and expansion of existing hydropower

plants.
42

2.5.2 Conceptual basis.

(a) The conceptual basis for evaluating the measures on the basis of direct willingness to pay

benefits from energy produced by hydroelectric are encouraged.

power plants is society's willingness to pay for these

outputs. If this is not possible or cost effective, benefit

information may sometimes be obtained through 2.5.3 Planning setting.

examination of market prices. Although utility pricing

of electricity is complex and usually based on

average cost rather than marginal cost, in cases

where it can be determined that market price to the

final consumer is based on marginal production

costs, this may be used as a measure of benefits.

When using market price as a measure of benefits

the increment in supply should ordinarily be relatively

small compared to the total (i.e., little change would

be expected in market price due to the incremental

supply). Continued movement of retail electricity

pricing towards marginal cost approximations (e.g.,

seasonal rates. time of day rates. etc.) may make

market Prices more relevant for benefit evaluation in

the future. In the absence of such direct measures of

marginal willingness to pay, the benefit from energy

produced by hydroelectric power plants is measured

by the resource cost of the most likely alternative to

be implemented in the absence of the alternatives

under consideration. Non-federal investment

analysis generally does not provide an adequate

basis for evaluation of potential investments of

Federal resources in hydroelectric power. This is

because non-federal investments reflect financial

conditions, insurance, and tax incentives that differ

from those applying to Federal investments. The

procedure that follows allows the planner to

construct an NED benefit estimate based on real

resource cost of the most likely non-federal alternative. Simplifications are encouraged for small

scale hydropower projects. An alternative hydropower benefit evaluation procedure is provided for

single-purpose projects that are to be 100 percent

non federally financed, provided that there are no

significant incidental costs.

(b) The real resource cost of the most likely alternative can also be used to compute benefits from

nonstructural measures. However, the net benefits of

certain nonstructural measures that alter the electric

power load cannot be measured effectively by the

alternative cost procedures for the following reasons:

(1) structural measures and many nonstructural

measures (except those that alter the load) result in

similar plan outputs, whereas load-altering measures

(e.g., revised rate structures) may change levels of

output; and (2) load-altering measures may have

fewer direct resource costs than measures based on

higher levels of output. Because of this lack of

comparability. the benefits from such load-altering

nonstructural measures should not be based on the

cost of the most likely alternative. Attempts to

measure the Benefits of load-altering nonstructural 

(a) Without-project condition. The without-project

condition is the most likely condition expected to exist

in the future in the absence of a project, including

any known changes in law or public policy. The

without-project condition includes the following

specific assumptions:

(1) Existing resources. Existing generating resources are part of the without-project condition.

Make adjustments to account for anticipated plant

retirements and changes in plant output due to age

or environmental restrictions associated with existing

policy and regulations.

(2) Existing Institutional arrangements. Existing

and reasonably expected future power system and

water management contracts, treaties, and non

power river operating criteria are part of the without-project condition. If revision of these arrangements is part of an alternative plan, the new arrangement (revised contract, criteria, etc.) would be

considered in the with-project condition.

(3) Alternative actions anticipated or under way.

The without-project condition includes those generating resources that can reasonably be expected to

be available in the forecast period.

(4) Nonstructural measures and conservation. The

without-project condition includes the effects of

implementing all reasonably expected nonstructural

and conservation measures.

(b) With-project condition. (1) The with-project

condition is the most likely condition expected to exist

in the future with the plan under consideration.

Examples of alternative plans include: alternative

combinations of projects in a basin study; alternative

sites in a reach study; alternative plant sizes at a

specific site; alternative reservoir sizes at a reservoir

site; use of reregulation and/or pump back to

increase firm capacity; and reallocation of storage to

increase firm energy output.

(2) Nonstructural alternatives to hydropower may

be used alone or in combination with structural

measures. Nonstructural measures include but are

not limited to reducing the level and/or time pattern

of demand by time-of-day pricing; utility-sponsored

loans for insulation; appliance efficiency standards;

education programs: inter-regional power transfers;

and increased transmission efficiency.
43

2.5.4 Evaluation procedure: General.

(a) Follow these steps to estimate NED benefits

that would accrue whenever the plan would not be

100 percent nonfederally financed. When single

purpose hydropower alternatives being studied

would be 100 percent nonfederally financed, the

market-based procedure specified in Section 2.5.10

may be used. Nonfederally financed means that all

construction and operation costs would be financed

entirely from sources other than federally appropriated funds. The level of effort expended on each

step depends upon the nature of the proposed development, the state of the art for accurately refining

the estimate, and the likely effect of further refinement on project formulation and justification.

(b) For the purpose of ensuring efficiency in the

use of planning resources, simplifications of the

procedures set forth in this section are encouraged

in the case of single-purpose, small scale hydropower projects (25 MW or less), if these simplifications lead to reasonable approximations of NED

benefits and costs. In addition, an analysis of marketability may be substituted for determination of

need for future generation for hydropower projects

up to 80 MW at existing Federal facilities.
Identify system for analysis

Estimate future demand 

for electric power

Define base system 

generating resources

Evaluate load/resource difference

Determine most likely 

nonfederal alternative

Compute benefits

44

Figure 2.5.4 -- Flowchart of Hydropower Benefit

Evaluation Procedures
45

2.5.5 Evaluation procedure: Identify system for plants as well as the reduction of output of some

 analysis.

Because of the trend toward interconnection and

coordination among utilities and power systems, it is

most appropriate to evaluate NED benefits for

hydropower on a system basis, rather than on the

needs of an individual utility or local area. The size

of the system would depend on the situation but

could consist of a power pool, a National Electric

Reliability Council (NERC) regional area, the marketing area of a Federal power marketing administration, or other geographic region.

In some cases, physical or institutional constraints

may limit the analysis to a smaller area, but care

must be taken to ensure that benefits are not

misstated by such analysis.

2.5.6 Evaluation procedure: Determine need for

 future generation.

(a) Estimate future demand for electric power.

Forecast electric power loads in terms of the annual

peak demand period. When a high proportion of the

generation is from hydropower, a forecast of annual

energy demand should be made. Also forecast

weekly load shapes to represent a minimum of

three periods in the year (e.g., typical summer,

winter, and spring/fall days) to assist in determining

the type of load that a hydropower project could

carry. Load forecasts should reflect the effects of all

load management and conservation measures that,

on the basis of present and future public and private

programs, can reasonably be expected to be

implemented during the forecast period. Load

forecasts should be made and analyzed by sectoral

use (e.g. residential, commercial, industrial).

Estimate loads at increments of no more than 10

years from the present to a time when the proposed

plant will be operating in a state representative of

the majority of its project life. In the case of staged

hydropower development or where generation

system resource mixes may change markedly, load

forecasts may be appropriate for 20 years or more

beyond the initial operation date. Account for

system exports and reserve requirements.

(b) Define base system generating resources.

Project future generating resources and imports at

various points in time without the proposed plan or

any alternative plan. Estimate resources for the

time periods stated in 2.5.6(a). Provide information

on peak capacity and on average annual energy

production where a high proportion of the systems

generation is hydropower. Data are readily available

on projected system resources for about 10 years.

Base projected resource additions beyond that time

on system studies. Account for retirement of older

plants due to age or environmental constraints.

(c) Evaluate load/resource difference. Compare

the loads identified under 2.5.6(a) with the resources identified under 2.5.6(b) to determine: (1)

when generating resource deficits will occur, (2) the

magnitude of these deficits, and (3) what portion of

these deficits could be met by the hydropower project. If nonstructural measures are components of

an alternative plan and these measures reduce

system loads, the amount of such reduction lessens

system deficits. Hydropower sites can be developed

to provide either a base load, mid-range, or peaking

service. Evaluate the system demand for each

class of hydropower generation. Simple tabulation

of annual peak and energy loads and resources is

generally adequate for preliminary studies. Use

system load-resource models that account for load

characteristics and generating plant operating

capabilities, if available, to evaluate accurately the

usability of specific projects.

2.5.7 Evaluation procedure: Determine the most

 likely non-federal alternative.

(a) General. Select the one alternative most likely

to be implemented in the absence of the proposed

Federal project. Begin identification of the most

likely alternative to the plan being considered with

the least costly alternative. If an alternative with a

lesser cost is passed over for a more expensive

one, justify not selecting the lower cost plan.

(b) Screen alternatives. The alternatives to a specific hydropower project must be viable in terms of

engineering, environmental quality, and other national policy considerations. Engineering viability

limits thermal alternatives to commercially available

electric power plants. Environmental viability implies

that plant costs include all equipment required to

meet environmental quality criteria. National policy

considerations include factors such as legal limitations on the use of oil, natural gas, and other

‘scarce’ fuels for electric power generation. Each

alternative need not in itself deliver service similar in

kind to the hydropower project, but the total power

system with the alternative must deliver service

similar in kind to the system with the hydropower

project. If nonstructural measures or conservation

are components of an alternative plan and these

measures reduce the need for additional capacity

or for additional power, the amount of such

reduction constitutes provision of service similar in

kind; this ensures that evaluation procedures will

not be biased against the selection of an alternative

that utilizes nonstructural measures.

(c) Identify the most likely alternative. (1) Compare the system with the hydropower project under
46

consideration to alternatives capable of meeting (iv) Occasionally, the initial output of a hydrosystem loads within established criteria of system power project is large compared to annual growth

reliability. Base the comparison on the basis of cost in system load; two or more years may be recolored

and other factors to determine the most likely alter- to fully absorb its output into the load. In these

native, i.e., the structural and/or nonstructural cases adjust the credit (benefit) to reflect the genmeasures that will be implemented if the project erating capacity and energy actually used in the

under consideration is not implemented. load in the early years of project life.

(2) If institutional obstacles to implementation are (2) Energy value adjustment. Account for the

noted, an alternative plan should still be considered

the most likely if the barriers are substantially within

the power of the affected users to correct. A detailed description of the institutional obstacles

should be included, with a discussion of the basis

for the conclusion that the obstacles cannot be

overcome.

(3) If the most likely alternative includes new

thermal plants, use those plants' capacity costs (including amortized investment costs, transmission

costs, and fixed operating and maintenance (O&M)

costs) as the measure of the value of the hydropower project's generating capacity, and use the

thermal plants' energy costs (primarily variable

O&M costs and fuel costs) as the measure of the

value of the hydropower project's energy production.

2.5.8 Evaluation procedure: Compute benefits.

(a) Compute hydropower plant annual benefits.

Compute annualized benefits based on the costs of

the most likely alternative for each hydropower development and installation component.

(1) Alternative costs. (i) Base the calculation of

alternative costs to be used as a measure of NED ranges from 5 to 10 percent of the cost per kilowatt

benefits on the following: (A) calculate all interest of thermal capacity, depending on the operating

and amortization costs charged to the alternative on characteristics of the hydropower project and alterthe basis of the Federal discount rate; (B) charge natives that include thermal capacity. The adjustno costs for taxes or insurance to the alternative; ment may be applied by increasing the capacity

and (C) in calculating costs of the most likely cost of the most likely alternative by the appropriate

alternative, use assumptions and procedures that percentage determined by the Federal Energy

parallel those used to calculate the costs of the Regulatory Commission (FERC).

plan being evaluated.

(ii) In many cases, benefits may vary over the life

of a project. This may be due to such factors as

staged development of the hydropower project,

changes in operation of the hydropower project resulting from changes in the resource mix in the total

generating system, and real escalation in fuel costs

(if the most likely alternative system includes a

thermal plant). Compute project benefits by time

intervals and discount these values to derive annualized power benefits.

(iii) When applicable, the evaluation shall reflect

differences in the cost of transmission, distribution,

and other facilities compared to the most likely alternative.

effect on system production expenses when computing the value of hydroelectric power. Adding

structural or nonstructural measures of a plan to a

system instead of adding an alternative power

source may result in greater or lesser system production expenses than if a particular thermal capacity were added; the effect on production expenses

can be determined by performing a system analysis. If there is a difference in system production expenses, adjust the energy value in the economic

analysis of the plan. If the alternative plan would

lower system production costs, the adjustment

would be negative. If the alternative plan would increase system production expenses, the adjustment would be positive. Consider system production expenses in determining the most likely alternative.

(3) Capacity value adjustment. The physical operating characteristics of hydropower projects differ

significantly from alternative thermal plants. Appropriate credit may be given to hydropower projects to

reflect their greater reliability and operating flexibility. When the value of these characteristics

cannot otherwise be quantified, an adjustment can

be made to the alternative plant capacity costs.

Typically, the adjustment per kilowatt of capacity

(4) Intermittent capacity adjustment. The dependable capacity of a hydropower project is based on

the load-carrying capability of the project under the

most adverse combination of system loads, hydrologic conditions, and plant capabilities. This value,

conservative approach is unrelated to the dependable capacity of a hydropower project's alternative if

thermal capacity is included and given no credit for

the value of capacity that is available a substantial

amount of the time. When power system operation

studies show that there is an intermittent capacity

value to the system, a capacity adjustment should

be made.

(5) Price relationships. Assume relative price relationships and the general level of prices prevailing 
47

during the planning study to hold generally for the plans are evaluated in a consistent way, the most

future, unless specified studies and considerations financially attractive plan can be identified as the

indicate otherwise. Examples of the latter include NED plan.

escalation of relative fuel cost (e.g., due to increasing scarcity) or increased capital costs expected to

result from changed environmental or safety criteria. Fuel costs used in the analysis should reflect

economic prices (market clearing) rather than regulated prices.

(b) Compute benefits of nonstructural measures.

Compute the average annual benefits of nonstruc- tract, power and energy availability (daily, weekly,

tural measures, based on the cost of the most likely seasonally), geographic relationship, delivery voltalternative identified above, except as specified in age, power factor, point(s) of delivery (busbar, high

2.5.2(b). voltage grid, load center), interconnecting facilities,

2.5.9 Evaluation procedure: Data sources. may be obtained from the Federal Energy RegulaData on existing and planned resources, loads,

marketability criteria; and alternative costs are available from various agencies and groups, including

the Department of Energy, NERC regional councils,

FERC regional offices, Federal power marketing

administrations, State energy agencies, utility

companies, and regional planning groups. If (a) Tables 2.5.11-1 through 2.5.11-3 are sugspecific operating characteristics of individual plants gested for presentation for reports that include fedare not available, generalized data can be obtained erally financed hydropower measures. Table

from other sources, including the Electric Power 2.5.11-1 summarizes the output of all plans by

Research Institute. Load-resources models based peaking capacity and system load factor, and preon simulated system operation may be used if sents the costs of each alternative plan. Tables

available. Some of these models are available from 2.5.11-2 and 3 summarize the output of the strucvarious sources, including FERC, Federal power tural component of each alternative, the benefits of

marketing administrations, and a number of the structural components, and the resource costs

consulting services. of all structural and nonstructural components of

2.5.10 Alternative Procedure: Financial all projects will have intermittent capacity, for examEvaluation. ple, and in some cases it will be appropriate to ac-

(a) General. This section provides an alternative

hydropower benefit evaluation procedure that may

be used for evaluating single-purpose projects that

are to be 100 percent nonfederally financed, provided that there are no significant incidental costs.

This approach employs market data based on long

run (10 or more years) utility wholesale prices as an

estimate of the cost of producing equivalent power

from the most likely alternative. These prices may

be used to evaluate and compare the financial

feasibility of alternative plans, provided that they are

consistently applied to all of the alternatives. The

formulation of alternative plans under this procedure is subject to the provisions of chapter 1, including evaluation of incidental benefits and costs,

compliance with environmental laws, and inclusion

of appropriate mitigation. Through this process, the

most financially attractive alternative is identified.

Because the benefits and costs of all alternative

(b) Industry long-run wholesale prices. The

market approach must be carefully applied to

ensure that the long-term (10 or more years) contract prices reflect the energy and capacity characteristics of the proposed hydropower project. In

screening contracts for applicability, a number of

factors should be examined, including: term of conreliability standards and emergency backup. Information on long-term wholesale power contracts

tory Commission, State public service commissions,

the Federal power marketing administrations, and

electric generating and distribution utilities.

2.5.11 Report and display procedures.

each alternative plan. The number of benefit categories included will vary from project to project. Not

count separately for firm and secondary energy.

System energy costs are sometimes included in the

unit energy values; in those cases such costs would

not have to be accounted for separately.

(b) Table 2.5.11-3 is suggested if the nature or

magnitude of hydropower benefits changes substantially over time. Examples are: staged construction of the hydropower project; change in the role of

hydropower in the system over time; and situations

in which several years are required to absorb a

large project into the system.

(c) When the alternative financial evaluation

procedure is used to evaluate financial feasibility of

plans that are to be 100 percent nonfederally financed (see Section 2.5.10), physical data similar

to that found in tables 2.5.11-1 through 3 should be

displayed. Capacity and energy values, as developed through the financial analysis, should also be

displayed in a manner facilitating comparison
48

among alternatives. These displays are in lieu of the However, no benefit-cost ratio can be presented,

standard presentation of hydropower benefits and because the analysis of the hydropower project's

project costs in the NED account. Also display any financial feasibility is not comparable to economic

incidental benefits and costs of the alternatives. analysis.

Table 2.5.11-1—Electric Power Supply Alternatives

[Period of analysis, price level, discount rate]

Alternatives Annualized

cost ($1,000) 1

Peak power supplied, conserved, and system 

load factor (MW) by time period 2 3

P1 P2 P3 PN

Most likely

alternative............................................. ................................ ..................... ................... ................. ..................

Recommended

plan............................................... ................................ ..................... ................... ................. ..................

Other plans

analyzed............................................. ................................ ..................... ................... ................. ..................

Annual equivalent cost includes system adjustment costs. 1

For example, for the summer season, an entry “90 10 6” would represent meeting the 100 MW deficit in the summer peak use identified 2

in the without-project condition by supplying 90 MW and reducing the quantity used by 10 MW, the system load factor for the entire system

for the summer would be .6.

Show by time period and season where there are seasonal variations. 3

Table 2.5.11-2 Summary of Annualized NED Benefits for Structural Measures and NED Costs for Structural

and Nonstructural Measures1

[(Thousands of month, year dollars) Applicable discount rate:— —]

Alternative

1 2 3 X

Plant data:

 Installed capacity, MW.................................................................................................................. ----------- ----------- ----------- -----------

 Dependable capacity, MW............................................................................................................. ----------- ----------- ----------- -----------

 Intermittent capacity, MW............................................................................................................. ----------- ----------- ----------- -----------

 Average annual energy, gWh........................................................................................................ ----------- ----------- ----------- -----------

 Average annual capacity factor (percent)..................................................................................... ----------- ----------- ----------- -----------

Benefits:

 Unit capacity and value ($/kW-yr)................................................................................................. (---------) (---------) (---------) (---------)

 Dependable capacity benefits....................................................................................................... ----------- ----------- ----------- -----------

 Intermittent capacity benefits........................................................................................................ ----------- ----------- ----------- -----------

 Unit energy value (mills/kWh)....................................................................................................... (---------) (---------) (---------)

 Energy benefits............................................................................................................................. ----------- ----------- ----------- -----------

 Unit system energy adjustment (mills/kWh).................................................................................. (---------) (---------) (---------) (---------)

 System energy cost adjustment.................................................................................................... ----------- ----------- ----------- -----------

 Real fuel cost escalation rate (percent)......................................................................................... (---------) (---------) (---------) (---------)

 Period of real fuel cost adjustment (years)................................................................................... (---------) (---------) (---------) (---------)

 Real fuel cost adjustment............................................................................................................. ----------- ----------- ----------- -----------

 Total hydro benefits................................................................................................................. ----------- ----------- ----------- -----------

 Other purpose benefits (list)......................................................................................................... ----------- ----------- ----------- -----------

 Annualized cost............................................................................................................................ ----------- ----------- ----------- -----------

 Structural measures..................................................................................................................... ----------- ----------- ----------- -----------

 Nonstructural measures............................................................................................................... ----------- ----------- ----------- -----------

 Net annualized benefits........................................................................................................... ----------- ----------- ----------- -----------

Note that benefits from load-altering nonstructural measures are excluded. This table may be used for displaying the benefits of

1 

nonstructural measures that do not alter the load (see 2.5.2 (b)).
49

Table 2.5.11—3 Time Distribution of NED Electric Power Benefits for structural Measures of Alternative —

—

1

[Applicable discount rate:——]

Time period 2

P1 P1 P1 P1 AAE3

Plant data:

 Installed capacity, MW.............................................................................................. ----------- ----------- ----------- ----------- -----------

 Dependable capacity, MW......................................................................................... ----------- ----------- ----------- ----------- -----------

 Intermittent capacity, MW......................................................................................... ----------- ----------- ----------- ----------- -----------

 Average annual energy, gWh.................................................................................... ----------- ----------- ----------- ----------- -----------

 Average annual capacity factor (percent).................................................................. ----------- ----------- ----------- ----------- -----------

Benefits:

 Unit capacity and value ($/kW-yr).............................................................................. (---------) (---------) (---------) (---------) (---------)

 Dependable capacity benefits.................................................................................... ----------- ----------- ----------- ----------- -----------

 Intermittent capacity benefits..................................................................................... ----------- ----------- ----------- ----------- -----------

 Unit energy value (mills/kWh).................................................................................... (---------) (---------) (---------) (---------)

 Energy benefits.......................................................................................................... ----------- ----------- ----------- ----------- -----------

 Unit system energy adjustment (mills/kWh)............................................................... (---------) (---------) (---------) (---------) (---------)

 System energy cost adjustment................................................................................. ----------- ----------- ----------- ----------- -----------

 Real fuel cost escalation rate (percent)..................................................................... (---------) (---------) (---------) (---------) (---------)

 Period of real fuel cost adjustment (years)................................................................ (---------) (---------) (---------) (---------) (---------)

 Real fuel cost adjustment.......................................................................................... ----------- ----------- ----------- ----------- -----------

 Annualized benefits.............................................................................................. _______ _______ ________ ________ _______

Note that benefits from load-altering nonstructural measures are excluded. This table may be used for displaying the benefits of

1 

nonstructural measures that do not alter the load (see 2.5.2 (b)).

Time periods selected depend on the nature of project and power system. 

2

Average annual equivalent.

3

Section Vl—NED Benefit Evaluation

 Procedures: Transportation (Inland

 Navigation)

2.6.1 Introduction.

This chapter presents the procedure for measuring

the beneficial contributions to national economic

development (NED) escalated with the inland

navigation features of water resource protects and

plans.

2.6.2 Conceptual basis.

The basic economic benefit of a navigation project

is the reduction in the value of resources required to

transport commodities. Navigation benefits can be

categorized as follows:

(a) Cost reduction benefit (same origin-destination;

same mode). For traffic that uses a waterway both

With and without a project, the benefit is the

reduction in the economic cost of using the waterway. This reduction represents an economic efficiency or NED gain because resources will be released for productive use elsewhere in the economy;

for example:

(1) Reductions in costs incurred from trip delays

(e.g., reduced congestion by expanding lock sizes

at congested facilities or by imposition of congestion fees).

(2) Reduction in costs because larger or longer

tows can use the waterway (e.g., by channel

straightening or widening).

(3) Reduction in costs by permitting barges to

be more fully loaded (e.g., by channel deepening).

(b) Shift of mode benefit (same

origin-destination; different mode). For traffic that

would use a waterway with the project but uses a

different mode, including a different waterway,

without the project, the benefit is the difference

between the costs of using the alternative mode

without the project and the costs of using the

waterway with the alternatives under consideration.

The economic benefit of the waterway to the

national economy is the savings in resources from

not having to use a more costly mode.

(c) Shift of origin-destination benefit. If a project

would result in a shift in the origin of a commodity,

the benefit is the difference in total costs of getting

the commodity to its place of use with and without

the project. If a project would result in a shift in the

destination of a commodity, the benefit is the difference in net revenue to the producer with and without the Project. The shift of origin-destination
50

benefit cannot exceed the reduction in transportation ensure the most effective use of an existing watercharges achieved by the project. way system over time. This analysis should be

(d) New movement benefit. This benefit applies if a

commodity or additional quantities of a commodity

would be transported only because of lowered

transportation charge with the Project. The quantities

are limited to increases in production and consumption resulting from lower transportation costs.

An increase in waterway shipments resulting from a

shift in origin or destination is not included. The new

movement benefit is defined as the increase in

producer and consumer surplus; practically, it can be

measured as the delivered price of the commodity

less all associated economic costs, including all of

the costs of barge transportation other than those of

the navigation project. This benefit, like the preceding one, cannot exceed the reduction in transportation costs achieved by the project.

(e) Use of rates for benefit measurement. It is

currently more difficult to accurately compute the

long-run marginal costs of particular rail movements

on the basis of cost estimation studies than to determine the rates at which railroad traffic actually

moves. In competitive markets, rates (prices) correspond to marginal cost, and, given market stability,

prices will settle at long-run marginal costs. Moreover, the rates actually charged determine the distribution of traffic among modes. For these reasons,

rates will be used to measure shift of mode benefits.

Section 7a of the Department of Transportation

(DOT) Act of 1966 (Pub. L. 89-670) requires the use

of prevailing rates, as described in 2.6.9(b). In the

case of new waterways, this rate may or may not

represent the best estimate of long-run marginal

costs. In the case of existing waterways, prevailing

competitive similar rates are the best available

approximation of long-run Marginal costs.

2.6.3 Planning setting.

(a) Without-project condition. The without-project

condition is the most likely condition expected to exist

in the future in the absence of the navigation project

or any change in law or public policy. The

without-project condition includes any practice likely

to be adopted in the private sector under existing law

and policy, as well as actions that are part of broader

private and public planning to alleviate transportation

problems. The following specific assumptions are

part of the projected without-project condition:

(1) Assume that all reasonably expected nonstructural practices within the discretion of the operating agency, including helper boats and lock operating policies, are implemented at the appropriate

time. Substantial analysis is required to determine

the best combination of nonstructural measures to

documented in project reports to assure the

reviewer that the best use of existing facilities will

be made in the without-project condition and that

the benefits of alternative with-project conditions

are correctly stated. The criteria for the best

utilization of the system are overall public interest

concerns, including economic efficiency, safety

and environmental impact.

(2) User charges and/or taxes required by law

are part of the without-project condition. Proposed

or possible fees, charges, or taxes are not part of

the without-project condition but should be considered as part of any nonstructural alternatives in the

with-project condition.

(3) The without-project condition assumes that

normal operation and maintenance will be performed on the waterway system over the period of

analysis.

(4) In projecting traffic movements on other

modes (railroad, highway, pipeline, or other), the

without-project condition normally assumes that

the alternative modes have sufficient capacity to

move traffic at current rates unless there is specific

evidence to the contrary.

(5) Alternative modes should be analyzed as a

basis for identifying the most likely route by which

commodities will be transported in the future in the

absence of waterway improvement.

(6) The without-project condition normally assumes that only waterway investments currently in

place or under construction are in place over the

period of analysis.

(b) With-project condition. The with-project

condition is the most likely condition expected to

exist in the future if a project is undertaken. The

same assumptions as for without-project condition

underlie the with-project condition. The following

discussion relates to the alternatives considered

under the with-project condition.

(1) Management of demand by the use of congestion or lockage fees is a nonstructural alternative, which alone or in combination with structural

devices may produce an economic optimum in a

congested waterway. Influencing marginal

waterway users through a congestion fee can

increase the net benefits of a waterway. Evaluate

alternatives that influence demand on the same

basis as supply-increasing (structural) alternatives.

(2) Additional nonstructural measures not within

the current purview of the operating agency may

be considered ‘supply management’ measures.

One example is traffic management. These

supply-increasing (nonstructural) measures can be
51

used alone or in combination with other structural or costs is included in the costs of the alternative

nonstructural measures. under study and its incremental contribution to

(3) Project alternatives can differ in their timing as

well as in their physical characteristics. Consider the

optimal timing of projects and of individual project

features in project formulation, so as to maximize net

benefits over time. Use the following 10 steps to estimate

(4) Consider improvements in alternative transportation modes as part of the without-project condition only, as specified in 2.6.3(a)(5).

(5) A change in the waterway system that is cur- sensitivity of project formulation and justification to

rently authorized but not yet under construction may further refinement, especially as applied to steps

be included if an appropriate share of its associated 6, 7. and 8.

benefits is explicitly identified.

2.6.4 Evaluation procedure: General.

navigation benefits. (See Figure 2.6.4.) The level

of-effort expended on each step depends upon the

nature of the proposed improvement, the state of

the art for accurately refining the estimate, and the
Identify 

commodity 

types

Identify study areas

Determine current cost 

of alternative movement 

Determine current 

commodity flow

Determine current 

cost of waterway use

Determine future cost 

of alternative modes

Forecast potential

waterway traffic

Determine future cost 

of waterway use

Determine waterway use 

with and without project

Compute benefit

52

Figure 2.6.4——Flowchart of Inland Navigation Benefit

Evaluation Procedure
53

2.6.5 Evaluation procedure: Step 1—Identify shifts in origin and destination, and to resource and

the commodity types. market analysis in the case of benefits from new

Identify the types of commodities susceptible to

movement on the waterway segment under consideration. The level of detail for each commodity is not

prespecified; for example, in some cases "grains" is

detailed enough, while in others "corn," "wheat" or

"soybeans" is needed.

(a) New waterways. Identify commodity types primarily by antennas of shippers and by resource

studies. Interviews will identify primarily the benefit

potentials of a shift of mode; resource studies will

identify primarily the benefit potentials of shifts in

origin-destination and in new movements.

(b) Existing waterways. Identify commodity types

primarily by analysis of data on existing use of the

waterway segment under study; e.g., data from the

Performance Monitoring System (PMS) and the Water borne Commerce Statistical Center (WCSC).

2.6.6 Evaluation procedure: Step 2—Identify the

 study area.

The study area is the area within which significant

project impacts are incurred. The origins and

destinations of products likely to use the waterway

are normally included in the study area, broken out

by river segments.

(a) New waterways. Determine the origins and

destinations primarily by interviews of shippers and

by resource studies.

(b) Existing waterways. Determine origins and

destinations by analysis of data on existing use of the

waterway segment under study; e.g., PMS and

WCSC traffic traced to its ultimate origin and destination.

2.6.7 Evaluation procedure: Step 3—Determine

 current commodity flow.

Gather current data for commodity movements

between origin-destination pairs susceptible to waterway movement as well as for commodities currently transported by waterway.

(a) New waterways. This step seeks to identify the

total tonnage that could benefit from using the

waterway. Obtain this information primarily by interviews of shippers. For benefits from shifts in origin

and destination and from new movements, care

must be taken to identify whether such movement

would be likely to occur if waterway transportation

were available; base this information primarily on interviews. Give particular attention to delivered price

from substitute sources in the case of benefits from

movements. Assess current transportation costs in

the area.

(b) Existing waterways. This step seeks to identify uses beyond the existing use of the waterway; it

seeks to identify potential commodities that might

use the waterway in response to a reduced transportation charge.

2.6.8 Evaluation procedure: Step 4—Determine

 current costs of waterway use.

Determine current costs of waterway use for all

the tonnage identified in step 3. Include in the waterway transportation cost the full origin-to-destination costs, including handling, transfer, demurrage,

and prior and subsequent hauls for the tonnages

identified in step 3. Consider the effect of seasonality on costs. In calculating the cost of prior and

subsequent hauls, care must be taken to avoid inappropriate aggregations and averaging of the

costs of movements in situations in which there is a

wide geographic dispersion in ultimate origins and

or destinations, as in the case of grain traffic.

(a) New waterways. The current cost of the proposed waterway use represents the with-project

condition; there are no without-project costs for waterway transportation.

(b) Existing waterways. Construct two arrays,

one representing the without-project and one the

with project condition. The difference between the

two arrays reflects the reduction in current delays

and any gains in efficiencies resulting from the

alternative under consideration.

2.6.9 Evaluation procedure: Step 5—Determine

 current cost of alternative movement.

Determine the current cost of alternative movement for all the tonnages identified in step 3. The

cost includes the full origin-to-destination costs, including costs of handling, transfer, demurrage, and

prior and subsequent hauls. Consider the effect of

seasonality on costs. In calculating the costs of

gathering or distribution prior or subsequent to the

primary line haul, care must be taken to avoid inappropriate aggregations and averaging of the costs

of movements in situations in which the ultimate

origins and/or destinations are widely dispersed, as

the case of grain traffic. This procedure uses price

data when available as a proxy for the long-run costs

of movement by other modes. This step, combined

with steps 3 and 4, generates a first approximation of

a demand schedule for waterway transportation given

(1) the costs of transportation by alternative modes,
54

(2) current levels of production, and (3) the commodity flows can be adequately described

distribution of economic activity.

(a) New waterways. In the case of rail movements,

use the prevailing rate actually charged for moving

the traffic to be diverted to waterways. For traffic

induced by the waterway construct the rail rate as in

step 5b.

(b) Existing waterways. Use rate and other price

data when available to estimate the cost of movement by alternative modes. In the case of rail

movements, if the rate for that movement is not now

used, use prevailing rates that are (1) competitive,

and (2) for movements similar to the individual move

that would occur without the project. Avoid the use of

paper rates, i.e., rates at which no significant amount

of traffic is actually moved. A rate is "competitive" to

the extent that it is for traffic for which there is

intramodal or intermodal competition within the

relevant markets. In identifying a ‘similar’ movement,

the factors considered may include geographic

location, degree of use, characteristics of terrain,

back haul, contract division, seasonality, ownership

of rolling stock, and physical rail connection to the

shipper. It is the responsibility of the analyst to select

rates that, in his or her view, best represent the

long-run marginal costs of the movement. Cost

estimates for particular movements may be useful in

selecting the rate or rates that best meet the criteria

of competitiveness and similarity. If more than one

competitive and similar rate is identified, an average

may be used. Assume that all water-compelled or

water-competitive rates are competitive and similar.

2.6.10 Evaluation procedure: Step forecast

potential waterway traffic by commodity.

Develop projections of the potential use of the

waterway under study for selected years from the

time of the study until the end of the project life, over

time intervals not to exceed 10 years. Document

commodity projections for the commodity groups

identified in step 3.

(a) The usual procedure for constructing commodity projections is to relate the traffic base to

some type of index over time. Indices can be constructed by many different methods, depending on

the scope and complexity of the issue under consideration and the availability of data and previous

studies.

(b) Generally, OBERS projections are the demographic framework within which commodity

projections are made. There are many instances,

however, in which a direct application of

OBERS-derived indices is clearly inappropriate.

Frequently, there are circumstances that distort the

relationship between waterway flows and the

economy described by OBERS. Even when total

through the use of indices derived from OBERS

projections, factors such as increasing

environmental concerns, changes in international

relations and trade, resource depletion, and other

factors, may seriously alter the relationship between

waterway commodity flows and the economy

described by OBERS.

(c) If problems of the type described in

paragraph (b) of this section are identified,

undertake independent studies to ascertain the

most appropriate method of projecting commodity

flows. The assessment of available secondary data

forms the basis of these independent studies.

These data will assist in delineating the bounds on

the rate of increase for waterway traffic, as well as

facilitate a better understanding of the problem.

Supplement these data With (1 ) interviews of

relevant shippers, carriers, and port officials; (2)

opinions of commodity consultants and experts: and

(3) historical flow patterns. Commodity projections

can then be constructed on the basis of the results

of the independent studies.

(d) Generally, specific commodity studies are of

limited value for projections beyond approximately

20 years. Given this limitation, it is preferable to

extend the traffic projections to the end of project

life through the use of general indices on a regional

and industry basis. Such indices can be constructed

from the OBERS projections or other generally

accepted multi-industry and regional models.

2.6.11 Evaluation procedure: Step 7—

Determine future cost of alternative modes.

(a) Future cost per unit of each commodity will

normally be the same as current cost. As stated in

2.6.3(a)(5), the without-project condition normally

assumes that the alternative modes have sufficient

capacity to move traffic at current rates unless there

is specific evidence to the contrary. This step

combined with step 6 provides a time series of

demand schedules specific to a particular commodity origin-destination pattern. Address the projection

of any change in future prices as indicated below.

(b) A future rate is a prevailing rate as defined in

step 5. It reflects exclusively a shift in rates because

of projected changes in the volume of shipments on

a given mode or a shift from one mode to another

(e.g., from rail to pipeline). To support such a shift,

show that the increase in volume is likely to lead to

a change in rate; do not assume, for example, that

an increase in volume of traffic of a commodity

from one area to another will automatically ensure

a more favorable high-volume rate.
55

2.6.12 Evaluation procedure: Step 8 — 2.6.14 Evaluation procedure: Step 10 —

Determine future cost of waterway use. Compute NED benefits.

Two separate analyses make up this step. First, Once the tonnage moving with and without a

analyze the possibility of changes in the costs of the plan is known and the alternative costs and waterwaterway mode for future years for individual way costs are known, total NED navigation

origin-destination commodity combinations. benefits can be computed at the applicable

Second, analyze the relationship between waterway discount rate:

traffic volume and system delay. Do this second

analysis in the context of the total volume of traffic

on the waterway segments being studied for withand without-project conditions. This analysis will

generate data on the relationship between total

traffic volume and delay patterns as functions of the

mix of traffic on the waterway; it may be undertaken

iteratively with step 9 to produce a "best estimate."

2.6.13 Evaluation procedure: Step 9—

Determine waterway use, with and without

project.

At this point the analyst will have a list of commodities that potentially might use the waterway

segment under study, the tonnages associated with

each commodity, and the costs of using alternate

modes and the waterway, including system delay

functions with and without the project over time. Use

this information to determine waterway use over

time with and without the project based upon:

(a) A comparison of costs for movements by the

waterway and by the alternative mode, as modified

by paragraph (b) of this section.

(b) Any changes in the cost functions and

demand schedules comparing (1) the current and

future without-project conditions and (2) the current

and future with-project condition. Conceptually, this

step should include all factors that might influence

a demand schedule; e.g., impact of uncertainty in

the use of the waterway; ownership of barges and

special equipment; level of service; inventory and

production processes; and the like. As a practical

matter, the actual use of a waterway without a cost

savings or nonuse of a waterway with a cost savings

depends on the knowledgeable judgment of

navigation economists and industry experts.

(c) Account for the ‘phasing in’ or ‘phasing out’ of

shifts from one mode to another in the analysis.

Base diversion of traffic from other modes to the

waterway, and from the waterway to other modes

as the waterway becomes congested, on expected

rate savings as adjusted by any other factors affecting the willingness of users to pay or the speed

of the response mechanism to changes in the relative attractiveness of alternative modes. Specifically,

determine diversions from congested waterways in

the order of the willingness of users to pay for

waterway transportation. Divert users with the

lowest willingness to pay first.

(a) For cost reduction benefits, the benefit is the

reduction in cost of using or operating the waterway; the cost of the alternative mode is a factor in

determining whether the tonnage would move both

with and without the project but is not a factor in

computing benefits. Cost reduction benefits are

generally limited to evaluation of existing waterways. The benefits for current and future cost reductions are reflected by the difference in

waterway costs (steps 4 and 8) with and without

the project. Compare waterway cost data (steps 4

and 8) with the alternative mode costs (steps 5 and

7) in order to determine the traffic flow by mode

over time (steps 3 and 6).

(b) For shift of mode benefits, the benefit is the

reduction in costs when the alternative movement

is compared with the waterway. These benefits

apply to new or existing waterways. Cost differences between the alternative mode and the

waterway mode (step 5—step 4 x step 3 and step

7—step 8 x step 6) will identify the shift of mode

benefits over time.

(c) For shift of origin-destination benefits and

new movement benefits, the benefit is the value of

the delivered product less the transportation and

production costs with the project. The transportation cost without the project (assuming the

with-project movement would have occurred) is a

factor in categorizing these benefits but is not a

factor in computing them. The upper limit of these

benefits can normally be determined by computing

reduction in transportation charges achieved by

the project. These can be a reduction in waterway

costs (steps 4 and 8) with and without the project

or changes in mode (step 5—step 4 and step

7—step 8).

2.6.15 Evaluation procedure: Problems in

 application.

(a) Changes in system delays. Differences in

system delays resulting from project alternatives

are difficult to compute. An assessment of system

delays within the state of the analytic art is necessary for a comprehensive benefit analysis. Delays

at all points in the system should be analyzed only

to the extent that project formulation and

evaluation are sensitive to such refinements, and

to the extent that the state of the art permits

accurate refinement of the estimate. Appropriate
56

proxy measures may be used in lieu of individual alternative on the basis of tonnage over time, curassessments at each element in the system when rent rates (step 3), and current fleet

evaluating system delays. characteristics.

(b) Interaction of supply and demand schedules. (iii) Growth beyond 20-year period. Compute

The entire evaluation procedure (2.6.4 through the benefits for alternatives carried forward for final

2.6.15) is based on an assumption that the supply display assuming no growth in tonnage or changes

and demand schedules are independent; but in in fleet characteristics or costs beyond 20 years in

fact, they are not. This problem is most acute when the future.

considering the variance in delays at high levels of

lock utilization. Essentially, shippers will face not an

expected delay value but rather a highly uncertain

delay value. Shippers' response to uncertainty (as

reflected in the demand schedule) may be quite different from their response to an expected shipping

cost (as reflected by the intersect of the supply and

demand schedules).

(c) User fee collection. The incremental collection

of user charges, fees, or taxes is not a NED benefit.

It is a transfer of resources between the private and

public sectors of the economy, manifesting itself as

resources committed to the proposed navigation

system. The increased collection of these charges,

fees, or taxes is therefore considered a decrease in

the public sector's contribution to the proposed

system.

(d) Sensitivity analysis. Project benefits are

calculated on the basis of ‘the most probable’

with-project and without-project conditions.

However, risk and uncertainty should be addressed

in the analysis of NED benefits and costs. In

particular, major uncertainty exists in the proper

measure of savings to shippers, namely the

difference in long-run marginal costs. To the extent

that rates or other prices vary from long-run

marginal costs, savings to shippers will contain a

component of transfers varying from real resource

savings. This element of uncertainty should always

be identified or acknowledged in estimates of

benefits. In dealing with uncertainty, three

techniques may be used: establishing consistent

sources of data, expanding the data-gathering, and

estimating the range of benefits. Use the following

two specific approaches to implement the third

technique, and display the results in terms of their

effects on project benefits in tabular form in the

project report.

(1) Prespecified sensitivity analysis. Compute the

following and include in the report:

(i) Current tonnage, new waterway. For new waterways, compute benefits for the recommended alternative on the basis of current phased-in tonnage

(steps 3 and 9c), current rates, and current fleet

characteristics.

(ii) Current rates, fleet. For both new and existing

waterways, compute benefits for the recommended

(iv) Interest rate. For projects whose authorized

discount rate is different from the current discount

rate, compute annualized benefits using the

current rate.

(v) User charges. Estimate the effect on

benefits of full cost recovery through user charges.

(2) Other. In addition, the report should contain

such other sensitivity analyses as are necessary to

meet the objective of a clear, concise report presenting a range of benefit levels that represent

data and assumptions about which reasonable

persons might differ.

(e) Data sources. The following discussion

summarizes key data sources, including problems

in their use.

(1) Interviews. Interview data may be used in

steps 1 through 9. (Use only forms approved by

the Office of Management and Budget.) Collect

data not available from secondary sources by

personal intervals. Use statistically sound

techniques for selecting the interview sample and

for devising the questions. The questionnaire and

a summary of responses should be compiled and

displayed in the final report in such a way as to

prevent the disclosure of individual sources.

Describe the errors and uncertainty inherent in the

sampling methods and responses.

(2) Other. The basic organizational source for

systematically collected waterway data is the

Office of the Chief of Engineers.

2.6.16 Report and display procedures.

Clear presentation of study results, as well as

documentation of key input data assumptions and

steps in the analysis, will facilitate review of the

report. Tables 2.6.16-1 through 4 are suggested

presentations for all reports that include

navigational objectives. In addition to detailed data

on the NED benefits of a project, summary tables

may present useful information on other aspects of

the project such as its impact on commodity flows

on other modes of transportation, and on the

location of economic activity. See the following

sample tables.
57

Table 2.6.16—1 Summary of Annualized NED Benefits and Costs for Alternative Projects

[Applicable discount rate: ——]

Alternatives

1 2 3 X

Navigation benefits....................................................................................... ..................... ..................... ..................... ......................

 Cost reduction benefits................................................................................. ..................... ..................... ..................... ......................

 Shift of mode benefits..................................................................................... ..................... ..................... ..................... ......................

 Shift in origin-destination benefits ................................................................ ..................... ..................... ..................... ......................

 New movement benefits............................................................................. ..................... ..................... ..................... ......................

 Total navigation benefits...................................................................... ..................... ..................... ..................... ......................

Other purpose benefits (list).......................................................................... ..................... ..................... ..................... ......................

 Total project benefits.......................................................................... ..................... ..................... ..................... ......................

 Project costs...................................................................................... ..................... ..................... ..................... ......................

 Net benefits........................................................................................ ..................... ..................... ..................... ......................

Table 2.6.16—2 Time Phasing of NED Benefits for Recommended Project1

[Applicable discount rate: ——]

Time period

Base Years

(specify)

Decade2

1 2 3 4 5 AAE3

Navigation benefits:

 Cost reduction benefit:

 Traffic volume (10 tons/year)............. ................. ................. ................... ................. ................ ................ ................

3

 Benefits............................................... ................. ................. ................. ................. ................. ................. .................

 Shift of mode benefit:

 Traffic volume (10 tons/year)............ ................. ................. ................. ................. ................. ................. .................

3

 Benefits.............................................. ................. ................. ................. ................. ................. ................. .................

 Shift in origin-destination benefit:

 Traffic volume (10 tons/year)............. ................. ................. ................. ................. ................. ................. .................

3

 Benefits............................................... ................. ................. ................. ................ ................. ................. .................

 New movement benefit:

 Traffic volume (10 tons/year)............. ................. ................. ................. ................. ................. ................. .................

3

 Benefits.............................................. ................. ................. ................. ................. .................. ................. .................

 Total navigation benefits............................. ................. ................. ................. ................. ................. ................. .................

Other purpose benefits................................... ................. ................. ................. ................ ................. ................. .................

 Total project benefits..................................... .................. .................. .................. .................. .................. .................. ..................

Comparable tables may be made for all detailed alternatives. 1 

Value for last year of decade. 2 

Average annual equivalent. 3 

Table 2.6.16—3 Waterway Traffic and Delays, Without Project Condition

[Applicable discount rate: ——]

Time period

Current

year

Base

Years

(specify)

Decade1

1 2 3 4 5 AAE2

Waterway traffic (10 tons/year)...................... ............. ............... ........... ............ ............ ............ ............ ............

3

 (By major commodity group)......................

Delays (minutes/tow)

 Study site...................................................... ................................. ............ ............ ............ ............ ............ ............

 Critical constraints........................................ ................................. ............ ............ ............ ............ ............ ............

 Total system.......................................... .............. ................ ............ ............ ............ ............ ............ ............
58

Table 2.6.16—3 Waterway Traffic and Delays, Without Project Condition - Continued

Time period

Current

year

Base

Years

(specify)

Decade1

1 2 3 4 5 AAE2

Delays (dollars/ton):

 Study site...................................................... ............... ................ ............ ............ ......... ............ .......... ............

 Critical constraints........................................ ................ ............... ............ ........................ .......................... ..............

 Total system............................................. .............. ................ ............ ............ ......... ............ .......... ............

 Value for last year of decade. 1

 Average annual equivalent. 2

Table 2.6.16—4 Waterway Traffic and Delays, With Recommended Project 1

Time period

Base

Year

Decade2

1 2 3 4 5 AAE3

Waterway traffic (10 tons/year)...................................... ............... ............ ............ ............ ............ ............ ............

3

 (By major commodity group)..................................... ................ ............ ............ ............ ............ ............ ............

Delays (minutes/tow)

 Study site....................................................................... ............................. ............ ............ ............ ............ ............

 Critical constraints......................................................... ............................. ............ ............ ............ ............ ............

Total system................................................................... ............... ............ ............ ............ ............ ............ ............

Delays (dollars/ton):

 Study site................................................................... ................ ............ ............ ............ ............ ............ ............

 Critical constraints........................................................... ............... ............ ............ ............ ............ ............ ................

 Total system......................................................... ............... ............ ............ ............ ............ ............ ............

Comparable tables may be made for all detailed alternatives. 1

 A value for last year of decade. 2

 Average annual equivalent. 3

Section VII—NED Benefit

Evaluation Procedures :

Transportation (Deep-Draft

Navigation)

2.7.1 Introduction.

This subpart presents the procedure for measuring the beneficial contributions to national economic development (NED) associated with the deep

draft navigation features of water resources plans

and projects. Deep-draft navigation features

include construction of new harbors and channels

and improvements to existing or natural harbors on

the sea coasts to meet the requirements of oceangoing and Great Lakes shipping. Harbor improvements include such structural projects as the construction of breakwaters and jetties to protect exposed harbors and the provision of entrance channels, interior channels, turning basins, and anchorage areas. Non-structural deep-draft measures include improved traffic management and pilotage

regulations.

2.7.2 Conceptual basis.

The basic economic benefits from navigation

management and development plans are the

reduction in the value of resources required to

transport commodities and the increase in the

value of output for goods and services. Specific

transportation savings may result from the use of

larger vessels, more efficient use of large vessels,

more efficient use of existing vessels, reductions in

transit time, lower cargo handling and tug

assistance costs, reduced interest and storage

costs such as from an extended navigation

season, and the use of water transportation rather

than an alternative land mode. Principal direct

benefits are categorized as follows: 

(a) Cost reduction benefits. If there is no

change in either the origin or destination of a

commodity, the benefit is the reduction in

transportation costs of quantities of the

commonalty that would move with and without the

plan resulting from the proposed improvement.
59

Cost reduction benefits apply in the following 2.7.3 Planning setting.

situations:

(1) Same commodity, origin-destination, and economic, and policy conditions that influence and

harbor. This situation occurs where commodities

now move or are expected to move via a given

harbor with or without the proposed improvement.

(2) Same commodity and origin-destination, different harbor. This situation occurs where

commodities that are now moving or are expected

to move via alternative harbors without the

proposed improvement would, with the proposed

plan, be diverted through the subject harbor. Cost

reduction benefits from a proposed plan apply to

both new and existing harbors and channels.

(3) Same commodity and origin-destination, different mode. This situation occurs where commodities that are now moving or are expected to move

via alternative land modes without the proposed

improvement would, with the proposed plan, be diverted through the subject harbor or channel. Cost

reduction benefits from a proposed plan apply to

both new and existing harbors and channels. Compute cost reduction benefits for alternate modes in

accordance with Section Vl (See 2.6.2(e)).

(b) Shift of origin benefits. If there is a change in

the origin of a commodity as a result of a proposed

plan but no change in destination, the benefit is the

reduction in the total cost of producing and transporting quantities of the commodity that would

move with and without the plan.

(c) Shift of destination benefits. If there is a

change in destination of a commodity as a result of

a proposed plan but no change in origin, the

benefit is the change in net revenue to the

producer for quantities that would move with and

without the plan.

(d) Induced movement benefits. If a commodity

or additional quantities of a commodity are produced and consumed as the result of lowered

transportation costs, the benefit is the value of the

delivered commodity less production and transportation costs. More precisely, the benefit of each increment of induced production and consumption is

the difference between the cost of transportation

via the proposed improvement and the maximum

cost the shipper would be willing to pay. Where

data are available, estimate benefits for various increments of induced movement. In the absence of

such data, the expected average transportation

costs that could be borne by the induced traffic

may be assumed to be half way between the

highest and lowest costs at which any part of the

induced traffic would move.

The planning setting consists of the physical,

are influenced by a proposed plan or project over

the planning period. The planning setting is

defined in terms of a without-project condition and

with-project condition.

(a) Without-project condition. The

without-project condition is the most likely

condition expected to exist over the planning

period in the absence of a plan, including any

known change in law or public policy. It provides

the basis for estimating benefits for alternative

with-project conditions. Assumptions specific to the

study should be stated and supported. The basic

assumptions for all studies are:

(1) Nonstructural measures within the authority

and ability of port agencies, other public agencies,

and the transportation industry determine changes

that are likely to occur. These measures consist of

reasonably expected changes in management and

use of existing vessels and facilities on land and

water. Examples are lightering, tug assistance, use

of favorable tides, split deliveries, topping-off, alternative modes and ports, and transshipment facilities.

(2) Alternative harbor and channel

improvements available to the transportation

industry over the planning period include those in

place and under construction at the time of the

study and those authorized projects that can

reasonably be expected to be in place over the

planning period.

(3) Authorized operation and maintenance is

assumed to be performed in the harbors and

channels over the period of analysis unless clear

evidence is available that maintenance of the

project is unjustified.

(4) In projecting commodity movements

involving intermodal movements, sufficient

capacity of the hinterland transportation and

related facilities, including port facilities, is

assumed unless there are substantive data to the

contrary.

(5) A reasonable attempt should be made to reflect advancing technology affecting the

transportation industry over the period of analysis.

However, the benefits from improved technology

should not be credited to the navigation

improvement if the technological change would

occur both with and without the plan.

(b) With-project condition. (1) The with-project

condition is the one expected to exist over the

period of analyses if a project is undertaken. Describe the with-project condition for each
60

alternative plan. Since benefits attributable to each planning setting to be projected over the period of

alternative will generally be equal to the difference analysis. Discuss the rationale for selecting these

in the total transportation costs with and without the elements.

project, the assumptions stated for the

without-project condition are used to establish the

with-project condition for each alternative.

(2) Management practices that are sometimes graph (c)(2) of this section and as exemplified by

within the discretion of a public entity and are Tables 2.7.6-1, -4, and -5.

therefore subject to change in the with condition include traffic management, pilotage regulations,

addition of berths, and additions or modifications to

terminal facilities.

(c) Display. In the planning report, present the

derivation and selection of with- and

without-project conditions in accordance with the

following guidelines:

(1) State the assumptions specific to the study.

(2) Specify the significant technical, economic,

environmental, social, and other elements of the

(3) Present the with and without project conditions in appropriate tabular and graphic displays

with respect to the elements selected as in para2.7.4 Evaluation procedures.

Use the following steps to estimate navigation

benefits. The level of effort expended on each step

depends upon the nature of the proposed

improvement, the state-of-the-art for accurately

refining the estimate, and the sensitivity of project

formulation and evaluation to further refinement. A

flowchart of navigation evaluation procedures is

shown in Figure 2.7.4.
8. Determine harbor use 

with and without project

1. Determine economic study area

2. Identify commodity types 4. Determine vessel fleet 

composition and cost

6. Determine alternative 

movement cost

7. Determine future commodity 

movement cost

3. Project waterborne commerce

5. Determine current commodity 

movement cost

9. Compute NED benefits

Figure 2.7.4

Flow Chart of Deep Draft

Navigation Benefit Evaluation Procedures
62

(a) Step 1—Determine the economic study area. portation carriers. In the case of new movements,

Delineate the economic study area that is tributary to

the proposed harbor and channel improvement.

Assess the transportation network functionally related to the studied improvement, including the types

and volumes of commodities being shipped, in order

to determine the area that can be served more

economically by the improvement. Include foreign

origins and destinations in this assessment. Consider

diversion from or to adjacent competitive harbors as

well as distribution via competing modes of transport.

It should be recognized that the lines of demarcation

for the economic study area are not fixed and that

the area may expand or contract as a result of

innovations or technological advances in

transportation and/or production or utilization of a

particular commodity. The economic study area is

likely to vary for different commodities. Combinations

of economic areas will result in a trade area

delineated specifically for the improvement under

study. However, in many cases, due to the close

proximity of adjacent harbors to the proposed improvement, the economic study area may be the

same as, or overlap with, such adjacent harbors.

Therefore, in the final delineation of the economic

study area for a given improvement, there should be

adequate discussion of the trade area relative to

adjacent ports and any commonality that might exist.

(b) Step 2 - Identify types and volumes of commodity flow. To estimate the types and volumes of

commodities that now move on the existing project or

that may be attracted to the proposed improvement,

analyze commerce that flows into and out of the

economic study area. This analysis provides an

estimate of gross potential cargo tonnage; the estimate is refined to give an estimate of prospective

commerce that may reasonably be expected to use

the harbor during the period of analysis in light of

existing and prospective conditions. If benefits from

economics of ship size are related to proposed

deepening of the harbor, the analysis should concentrate on the specific commodities or types of

shipments that will be affected. Thus, an historical

summary of types and trends of commodity tonnage

should be displayed. The considerations generally

involved in estimating current volumes of prospective

commerce are:

(1) If the plan consists of further improvements to

an existing project, statistics on current waterborne

commerce will provide the basis for evaluation. For

new harbors with no existing traffic, or for existing

commodity movements that may be susceptible to

diversion from adjacent harbors, basic information is

collected by means of personal interviews or

questionnaires sent to shippers and receivers

throughout the economic study area. Secondary

commercial data are usually available through State

and local public agencies, port records, and transgive attention to resource and market analyses.

(2) After determining the types and volumes of

commodities currently moving or expected to move

in the economic study area, it is necessary to obtain

origins, destinations, and vessel itineraries in order to

analyze the commodity types and volumes that are

expected to benefit from the proposed improvement.

Commodities that are now moving without the project

but that would shift origins or destinations with the

project, as well as induced movements, should be

segregated for additional analysis (see steps 5 and

6). A study should be made of various alternatives

for the existing traffic and of new traffic susceptible to

diversion from alternative harbors or other modes of

transportation. The objective of such a study is to

determine the type and volume of those

commodities for which savings could be affected by

movement via a proposed navigation improvement

and the likelihood that such movements would

occur. Cost reduction benefits sufficient to divert

traffic from established distribution patterns and

trade routes are navigation project benefits. In

determining the likelihood of prospective commerce,

particular attention should be given to alternative

competitive harbors in the case of new movements

and to hinterland traffic. Elements of analysis of

current tonnage include: size and type of vessel,

annual volume of movements, frequency of

movements, volume of individual shipments,

adequacy of existing harbor and transportation

facilities, rail and truck connections, and service

considerations. Generally this prospective traffic is

the aggregate of a large number of movements

(origin-destination pairs) of many commodities; the

benefit from the navigation project is the savings on

the aggregate of these prospective movements.

(c) Step 3 - Project waterborne commerce. Develop projections of the potential use of the waterway

under study for selected years from the time of the

study until the end of the project life, over time

intervals not to exceed 10 years. Document commodity projections for the commodity groups identified in step 2.

(a) The usual procedure for constructing commodity projections is to relate the traffic base to

some type of index over time. Indices can be constructed by many different methods, depending on

the scope and complexity of the issue under consideration and the availability of data and previous

studies.

(b) Generally, OBERS Projections are the demographic framework within which commodity

projections are made. There are many instances,

however, in which a direct application of

OBERS-derived
63

indices is clearly inappropriate. Frequently, there are nages by trade areas both with and without the project

circumstances that distort the relationship between should be displayed at least for the study year, the

waterway flows and the economy described by base year, fifth year, tenth year, and then by decades

OBERS. Even when total commodity flows can be over the period of the analysis.

adequately described through the use of indices

derived from OBERS projections, factors such as

increasing environmental concerns, changes in international relations and trade, resource depletion,

and other factors, may seriously alter the relationship

between waterway commodity flows and the (d) Step 4 - Determine vessel fleet

economy described by OBERS.

(c) If problems of the type described in paragraph

(b) of this section are identified, undertake independent studies to ascertain the most appropriate

method of projecting commodity flows. The assessment of available secondary data forms the basis of

these independent studies. These data will assist in

delineating the bounds on the rate of increase for

waterway traffic, as well as facilitate a better understanding of the problem. Supplement these data

with (1) interviews of relevant shippers, carriers, and

port officials; (2) opinions of commodity consultants

and experts; and (3) historical flow patterns.

Commodity projections can then be constructed on

the basis of the results of the independent studies.

(d) Generally, specific commodity studies are of

limited value for projections beyond approximately

20 years. Given this limitation, it is preferable to

extend the traffic projections to the end of project life

through the use of general indices on a regional and

industry basis. Such indices can be constructed from

the OBERS projections or other generally accepted

multi-industry and regional models. Describe

projection methods selected in sufficient detail to

permit a review of their technical adequacy.

(2) Sensitivity analysis of several levels of projections is used for the economic analysis. There may

be a high level projection embodying optimistic assumptions and a low level projection based on assumptions of reduced expectations. The high and

low projections should bracket the most foreseeable

conditions. The third and fourth levels of projections

can reflect the with- and without-project conditions

based on the most likely estimates of the future. If a

proposed plan would not induce commodity growth,

one level of projection may be shown for both the

with- and without-project conditions. (See Chapter I, States flag vessels expected to benefit from using the

Supplement I).

(3) The commodities included in the projections

should be identified, if possible, according to the

following waterborne modes: containerized, liquid

bulk, dry bulk, break-bulk, etc. Projection-related

variables include estimated value, density, and perishability. The commodities should also be categorized by imports, exports, domestic shipments, domestic receipts, and internal trade. Projected ton-

(4) Most projections of waterborne commerce

are static estimates of dynamic events; therefore, the

projections should be sufficiently current to support

the report conclusions.

composition and cost — (1) Vessel fleet composition.

Key components in the study of deep-draft harbor

improvements are the size and characteristics of the

vessels expected to use the project. Present data on

past trends in vessel size and fleet composition, and

on anticipated changes in fleet composition over the

project life. Use estimates of future fleet consistent

with domestic and world fleet trends. Undertake

studies to the extent necessary to determine the

appropriate vessel fleet. The assessment of available

secondary data forms the basis of the independent

studies. Data may be obtained from various sources

including the U.S. Department of Transportation

(Maritime Administration), trade journals, trade

associations, shipbuilding companies, and vessel

operating companies. Determine the composition of

the current and future fleet that would utilize the

subject harbor both with and without the proposed

improvement. Provide adequate lead time for

anticipated changes in fleet composition for vessels

that are currently a small part of the world fleet. Size

selection may vary according to trade route, type of

commodity, volume of traffic, canal restrictions,

foreign port depths, and lengths of haul. It may not be

realistic to assume that the optimum size vessel is

always available for charter; the preferred approach is

a fleet concept that includes a range of vessels

expected to call with and without the project. It is

suggested that tabulations in the report show

composition of vessel fleets by deadweight tonnage

for each type of vessel beginning with the current fleet

and by decades through the period of analysis.

Historical records of trips and drafts of vessels calling

at the existing project should also be displayed.

(2) Vessel operating costs. To estimate transportation costs, obtain deep-draft vessel operating costs

for various types and classes of foreign and United

proposed improvement. Since vessel operating costs

are not readily available from ocean carriers or from

any central source, the Corps of Engineers, Water

Resources Support Center, will develop and provide

such costs on an annual basis for use in plan

evaluation. Planners should determine to what extent

these estimates of vessel costs must be modified to

meet the needs of local conditions. Document and

display selected vessel operating costs in the report.
64

(e) Step 5 - Determine current cost of (g) Step 7 - Determine future cost of commodity

commodity movements. Determine transportation movements. Estimate relevant shipping costs

costs prevailing at the time of the study for all during the period of analysis and future changes in

tonnage identified in Step 2. Transportation costs the fleet composition, port delays, and port

include the full origin-to-destination cost, including capacity under the with- and without-project

necessary handling, transfer, storage, and other conditions for each alternative improvement under

accessory charges. Construct costs for the with- study. Base future transportation costs on the

and without project condition. The without-project vessel operating cost prevailing at the time of the

condition is based on costs and conditions study. Additional data may be needed to analyze

prevailing at the time of the study. Transportation the relationship between total volume and delay

costs with a plan reflect any efficiencies that can patterns and the port capacity for the with- and

be reasonably expected, such as use of larger without-project conditions for each alternative.

vessels, increased loads, reduction in transit time Changes in costs due to the project should be

and delays (tides), etc. Use competitive rates, identified and separated from changes due to

rather than costs, for competitive movements by other factors.

land (See 2.7.2(a)(3), 2.6.2(e), and 2.6.9(b)). This

concept also applies to Steps 6, 7, and 9 and

elsewhere where a Competitive movement by land

is an alternative.

(f) Step 6 - Determine current cost of alternative

movement. Determine transportation costs prevailing at the time of the study for all tonnage identified alternatives and for the proposed improvement;

in Step 2 for alternative movements. The cost in- and present and future fleet composition with and

cludes the full origin-to-destination cost. Such without the proposed plan. To estimate the

alternatives include competitive harbors, lightering, proposed harbor use over time, both with and

lightening and topping-off operations, off-shore without the project, compare costs, other than

port facilities, transshipment terminals, pipelines, project costs, for movements via the proposed

traffic management, pilot age regulations, and plan and via each alternative. Analyze any

other modes of transportation. Consider changes in the cost functions and demand

competitive harbors with existing terminal facilities schedules in the current and future without

and sufficient capacities as possible alternatives condition and the current and future with condition.

for traffic originating in or destined to the hinterland Conceptually, this step includes all factors that

beyond the confines of the harbor and for all other might influence a demand schedule. Determine

new commerce as well as all diverted traffic. the impact of uncertainty in the use of the harbor,

Commerce with final origins and destinations the level of service provided, and existing and

within the confines of the study harbor is normally future inventories of vessels. Provide adequate

noncompetitive with other harbors and need not be lead time for adoption for vessels that are currently

considered for diversion unless unusual a small percentage of the world fleet.

circumstances exist. Diversion of established

commerce now moving through the existing harbor

to or from the hinterland is dependent on many

different cost and service factors; therefore, to

ensure that all of these factors are included in the

analysis, interviews, and consultations with

shippers and receivers should be conducted prior

to any determination concerning diversion of traffic.

Factors to be considered in the analysis include

transportation costs for both inland and ocean

movement, handling and transfer charges,

available service and schedules, carrier connections, institutional arrangements, and other related

factors. In addition, for commodities with shifts in

origins and destinations, as well as for new movements, collect data on the value of the delivered

product as well as production and transportation

costs for shipments with the project. The specific

data and method of collection will vary with the

specific situation and the nature of the benefit.

(h) Step 8 - Determine use of harbor and

channel with and without project. At this point, the

analyst will have a list of commodities that

potentially might use the proposed improvement;

potential tonnages of each commodity or

commodity group; transportation costs for

(i) Step 9 - Compute NED benefits. Once the

tonnage moving with and without a plan is known

and the cost via the proposed harbor and via each

alternative are known, compute total NED

navigation benefits will be computed using the

applicable discount rate.

(1) Cost reduction benefits. (i) Traffic with same

commodity, origin-destination, and harbor. For traffic now using the harbor or expected to use it, both

with and without the proposed project, the

transportation benefit is the difference between

current and future transportation cost for the

movement by the existing project (without-project

condition) and the cost with the proposed

improvement (with-project condition) .

(ii) Traffic with same origin-destination; different

harbor. For commerce shifted to the proposed improvement from other harbors or alternatives, including future growth, the benefit is any reduction

in current and future costs when movement via the
65

proposedimprovement is compared with each alternative. attempt to shorten the analysis to the most

(iii) Traffic with same commodity and

origin-destination, different mode. For commerce

shifted to the proposed improvement from other

modes, the benefit is any reduction in current and

future costs to the producer or shipper. (See

2.7.2(a)(3)) when movement via the proposed

improvement is compared with each alternative.)

(2) Shift of origin benefits. For commerce that

originates at a new point because of the proposed

improvement, the benefit is the difference between

the total cost of producing and transporting the

commodity to its destination with and without the

plan.

(3) Shift of destination benefits. For commerce

that is destined to a new point because of the proposed improvement, the benefit is the difference in

net revenues to producers with and without the

plan.

(4) Induced movement benefits. If a commodity

or additional quantities of commodity are produced

and consumed as a result of a plan, the benefit for

each increment of induced production and consumption is the difference between the cost of

transportation via the proposed improvement and

the maximum cost the shipper would be willing to

pay. To determine the maximum cost the shipper

would be willing to pay, estimate how much of a

price increase it would take to induce the producer

to increase its output by each increment or how

much of price decrease it would take to induce

consumers to increase their consumption by each

increment. In the absence of data suitable for

incremental analysis, the expected average

transportation costs that could be borne by the

induced traffic may be assumed to be half way

between the highest and lowest costs at which any

part of the induced traffic would move.

2.7.5 Problems in application.

(a) Multiport analysis. This procedure calls for a

systematic determination of alternative routing possibilities, regional port analyses, and intermodal

networks that may require the use of computer

modeling techniques. The data needed for such a

determination are often difficult to obtain;

therefore, interviews with knowledgeable experts

will often have to be relied upon.

(b) Ultimate origins and destinations. The

procedure calls for an analysis of full

origin-destination costs to determine routings as

well as to measure benefits in some instances.

Problems will arise in determining the ultimate

origins and destinations of commodities and in

determining costs. Therefore, the analyst should

relevant cost items.

(c) Sensitivity analysis. Guidance for addressing

risk and uncertainty in the analysis is found in Supplement I to Chapter I. The uncertainty in the estimates of critical variables should be dealt with.

These variables specifically related to deep-draft

navigation may be traffic projections, especially

foreign shipments, fleet composition, and cost of

commodity movements.

(d) Data sources. The following discussion summarizes key data sources including problems in

their use:

(1) Interviews. Collect data not available from

secondary sources by personal interviews. (Use

only interview forms approved by the Office of

Management and Budget.) Display the questionnaire used and a summary of responses in the

project report in such a way that individual sources

are not disclosed.

(2) Publications. Data concerning commerce in

foreign trade, United States coastal shipping, and

activities of U.S. flag vessels in foreign trade, together with limited data concerning the world fleet,

are readily available from a number of Federal

agencies, trade journals, and port publications.

However, data concerning the foreign-flag fleet are

often not regularly available in up-to-date form

from sources in the United States. Principal

governmental sources are the Corps of Engineers,

the Maritime Administration and the Bureau of the

Census. For more detailed background on world

fleet trends, shipping outlooks, and vessel

characteristics, available foreign literature must be

carefully analyzed. A few of the available foreign

ship registers and literature are listed below to

illustrate the type of data available from foreign

sources.

Lloyd's Register of Shipping, London (Annual).

The Tanker Register, H. B. Clarkson (Annual).

The Bulk Carrier Register, H. B. Clarkson

(Annual).

Shipping Statistics and Economics (and special

reports), H. P. Drewry, Ltd., London (Weekly).

Fairplay International Shipping Journal (and special reports), London (Weekly).

2.7.6 Report and display procedures.

Clear presentation of study results, as well as

documentation of assumptions and steps in the

analysis, will facilitate review of the report. The accompanying tables are suggested. The number of

displays will depend on the complexity of the study.
66

Table 2.7.6—1 Projected Vessel Fleet Size Distribution, -- Ft. Channel Plan a

[By percentage]

Vessel size

(D.W.T.) Currentb

Percentage of tonnage

Base Year Year 5 Year 10 Year 20 Year — Year end c

With project

Total

Without project

Total

Size distribution should be made separately, as follows: 1. For foreign and US flag fleets. 2. For vessel types. 3.For trade routes (where a 

distances, constrictions or other circumstances indicated varying sized vessel fleets). 4. For year project plan.

Study year. b 

First year of project benefits. c 

Table 2.7.6—2 Typical Vessel Dimensions of Vessel Fleet by Type and Deadweight Tonnage

Type

Vessel characteristics

DWT Length Beam Draft, loaded

Table 2.7.6—3 Computation of Annual Transportation Costs for ------- 1 

D.W.T. group Tonnage carried Tonnage carried Tonnage carried

Foot channel Foot channel Foot channel

Unit Unit Unit

cost cost cost

Total Total Total

Percent Volume cost Percent Volume cost Percent Volume cost

(000) (000) (000) (000)

Total ..........................

 Similar computations should be included for major commodity movements 1

Table 2.7.6—4 Projected Commerce for Deep-Draft Traffic

Commodity Year 5 Year 10 Year 20 Year — Year — Year end 1 Current Average

Year Annual 2

Base

Return

Year 3

With project

Without project

Commodities should be categorized by trade area 1 

Study area 2 

First Year of project benefits 3 
67

Table 2.7.6—5 Projected Vessel Trips for Deep-Draft Traffic

Vessel type Year 5 Year 10 Year 20 Year— Year — Year end 1 Current Average

Year Annual 2

Base

Return

Year 3

With project

Without project

Show projected vessel trips by type of vessel and total for project life. 1 

Study year. 2 

First Year of project benefits. 3 

Section Vlll—NED Benefit

Evaluation Procedures: Recreation

2.8.1 Introduction.

This section provides the procedures for

evaluating the beneficial and adverse effects of

water project recreation on national economic

development (NED). The Federal Water Project

Recreation Act of 1965 (Pub. L. 89-72) requires

that full consideration be given to the opportunities

that Federal multiple-purpose and other water

projects afford for outdoor recreation and

associated fish and wildlife enhancement.

2.8.2 Conceptual basis.

(a) General. (1) Benefits arising from recreation

opportunities created by a project are measured

terms of willingness to pay. Benefits for projects

(or project features) that increase supply are

measured as the willingness to pay for each

increment of supply. Benefits for projects (or

project features) that alter willingness to pay (e.g.,

through quality changes) are measured as the

difference between the without- and with-project

willingness to pay. Willingness to pay includes

entry and use fees actually paid for site use plus

any unpaid value (surplus) enjoyed by consumers.

(Payment for equipment, food, transportation

costs, or lodging associated with recreation activity

cannot be used as direct estimates of willingness

to pay, because these payments are not

specifically for site use). The total willingness to

pay is represented as the area under the demand

curve between the old and new supply. Because

most recreation is publicly provided, it is usually

not possible to estimate demand directly from

observed price-consumption data. This section

describes procedures for estimating use and

willingness to pay by means of travel behavior,

user surveys, and other quantifiable measures.

(2) Many proposed projects subject to NED

benefit-cost analysis involve both recreation gains

and recreation losses. For example, stream and

land-based recreation may be lost because of the

project, or recreation may be transferred to the

proposed site from a more distant site. Net

recreation benefits are the value of the gains

minus the value of the losses; benefits may be

positive or negative. Since reliable empirical

methods for estimating willingness to accept

compensation for losses have not been

developed, measures of willingness to pay are

used to value both gains and losses. Evaluation

procedures should be based on sound economic

rationale and have an empirical basis that permits

an objective and reproducible analysis of benefits

and costs.

(b) Criteria for an acceptable evaluation procedure. An acceptable evaluation procedure has the

following characteristics:

(1) Evaluation is based on an empirical estimate

of demand applied to the particular project.

(2) Estimates of demand reflect the socioeconomic characteristics of market area populations,

qualitative characteristics of the recreation resources under study, and characteristics of

alternative existing recreation opportunities.

(3) Evaluation accounts for the value of losses or

gains to existing sites in the study area affected by

the project (without-project condition).

(4) Willingness to pay projections over time are

based on Protected changes in underlying

determinants of demand.

(c) Description of evaluation methods. The

procedures described in this section and its

appendices incorporate three evaluation methods.

They are the travel cost method (TCM), contingent

valuation method (CVM), and unit day value (UDV)

method.
68

The use of any other method should be justified as categories of project-related use: (1) total or gross

Conforming to the Characteristics listed in 2.8.2(b) expected use of project facilities, including transfers

and the selection process described in 2.8.2(d). of use from other sites: (2) and existing site use

(1) Travel cost method. The basic premise of the

travel cost method is that per capita use of a recreation site will decrease as out-of-pocket and time

costs of traveling to the site increase, other variables

being constant. TCM, consists of deriving a demand

curve by using the variable costs of travel and the

value of time as proxies for price. This method may

be applied to a site-specific study or a regional

model.

(2) Contingent valuation method. The contingent

valuation method estimates NED benefits by directly

asking individual households their willingness to pay

for changes in recreation opportunities at a given

site. Individual values may be aggregated by

summing willingness to pay for all users in the study

area. This method maybe applied to a site-specific

study or a regional model.

(3) Unit day value. The unit day value method

relies on expert or informed opinion and judgment to

estimate the average willingness to pay of recreation

users. By applying a carefully thought-out and

adjusted unit day value to estimated use, an approximation is obtained that may be used as an estimate of project recreation benefits.

(d) Selection of evaluation procedure. Select a

procedure for evaluating each of the following two

displaced or destroyed by project facilities. The criteria for selecting the appropriate procedure for each

use category are set out in Figure 2.8.2. Application

of the criteria may result in selection of different

procedures for the two categories. The criteria given

in Figure 2.8.2 consider several dimensions of

project evaluation situations: Three measures of the

absolute and relative size of the recreation benefit

created, displaced, or transferred by the proposed

project, and the nature of the recreation activities

affected. If either use category specified above

involves more than 750,000 annual visits, use either

a regional model or site-specific study to evaluate

benefits or benefits foregone. If recreation is an

important project component relative to other outputs

and costs, or if specialized activities (those for which

opportunities in general are limited, intensity of use is

low, and users skill, knowledge, and appreciation is

great) are affected, the criteria also require greater

accuracy in benefit estimates. If both specialized

activities and general recreation are affected by the

project, the choice between a regional model and a

more limited site-specific study is at the discretion of

the agency, based on consideration of the relative

importance of the specialized activity, the

advantages of the respective methods, and cost

considerations.
69

Figure 2.8.2——Criteria for Selecting Procedures for Evaluating

Recreation Benefits
70

2.8.3 Planning setting. without-project condition provide the basis for the

(a) General. Determine changes in recreation

use and value resulting from alternative plans

through analysis of without-project and with-project

conditions in the study area over the prescribed

period of analysis.

(b) Without-project condition. The

without-project condition is the pattern of

recreation activity expected to prevail over the

prescribed period of analysis in the absence of the

recreation project or plan. The without-project

condition includes existing water and related land

recreation resources, and projects and additional

recreation resources currently being developed or

both authorized and likely to be developed during

this period.

(c) With-project condition. The with-project

condition is the pattern of recreation activity

expected to prevail over the prescribed period of

analysis with a recreation plan or project.

Recreation resources included in the

with-project condition. Analysis of the with-project

condition considers recreation opportunities that

will be diminished in quality or quantity because of

project development and operation. This will be

accomplished in assessing the use of the

proposed recreation development.

2.8.4 Evaluation procedure: General.

Use the following procedure to determine the

benefit from recreation resource use with a plan or

project. (See Figure 2.8.4.) The benefit is based on

the gross value of recreation use of the resource

for the with-project condition less the gross loss in

recreation use caused by the project or plan. The

recreation benefit is measured in nine steps. The

level of effort expended on each step depends on

the nature of the proposed improvement, the state

of the art for accurately refining the estimate. and

the sensitivity of project formulation and

justification to further refinement.
Define study area

Estimate recreation 

resource

Forecast recreation use

Determine without-project 

condition

Forecast recreation use 

diminished by project

Estimate value of recreation 

diminished by project

Forecast recreation use 

with project

Estimated value of recreation 

use with project

Compute benefit

71

Figure 2.8.4 Flowchart of Recreation Benefit Evaluation Procedures
72

2.8.5 Evaluation procedure: Define the study lated land resources providing similar or complearea. mentary types of recreation within the study area.

Determine changes in recreation use and value

resulting from alternative plans through the analysis

of without-project and with-project conditions in the

study area over the prescribed period of analysis.

The impacts should relate to the geographical recreation "market" defined by the location of actual

and potential user populations. Definition of the

study area should be justified with respect to the

particular characteristics and quality of the site and

the availability of similar alternative recreation opportunities. Reference to statistical evidence regarding the spatial distribution of trip generation is

encouraged.

2.8.6 Evaluation procedure: Estimate recreation

 resource.

(a) Include in estimates of the recreation resource

capacity for the study area all sites (see 2.8.3(b))

that provide recreation activities similar to those

displaced or provided by the project. The recreation

resource in the study area is the system of water

and related land recreation sites that influence the

demand for the proposed project and are

influenced in turn by the demand at the existing site.

(b) Include in the inventory of water and related

land recreation sites in this study area those Federal. State, county, local, and private sites that are in 2.8.9 Evaluation procedure: Forecast recreation

varying stages of development or that are authorized and likely to be developed in the forecast

period.

(c) Identify the ability of recreation alternatives to

provide different recreation activities and assess the

quality of the alternative recreation experiences.

2.8.7 Evaluation procedure: Forecast potential

 recreation use in the study area.

Potential use is the expected visitation at prevailing prices unconstrained by supply. Forecast of total

recreation use in the study area should be made for

each activity currently provided at the project site

and for each activity proposed in the plan or project.

The potential use for a specified outdoor water and

related land recreation activity will depend on the

size and characteristics of the study area population

and the availability of the specified recreation

activity and other types of recreation in the study

area.

(a) The recreation use of the site's resources will

depend not only on the attributes of the site and its

proximity to population centers, but also on its location in relation to the location of other water and re-

(b) Forecasting potential future participation in

recreation activities for the study area involves four

steps: (1) Collect data on explanatory variables that

influence the demand for recreation activities; (2)

Relate potential use to these variables by means of

some use estimating techniques as described in

2.8.9; (3) Forecast values of the explanatory variables over the period of analysis. Justify projections

and explain any simplifying assumptions.

Reference to statistical evidence on trends is

encouraged; (4) Calculate expected use for the

study area using the values obtained in Step (3) and

the relationships determined in Step (2).

2.8.8 Evaluation procedure: Determine the

 without-project condition.

Determine the without-project condition for the

study area on the basis of a comparison of the

available recreation resources as specified in 2.8.6

and the recreation resource use as specified in

2.8.7 for each activity currently provided at the project site and each activity proposed in the plan or

project. Compare the capacities of all sites, including the site without the proposed project, to produce

recreation activities with the expected demand for

each activity.

 use with project.

(a) General. Forecast recreation use with the

project as a basis for estimating project recreation

values. Project use over time by calculating the

change in use induced by anticipated changes in

the variables that determine use. Explain values

employed for projecting future demand and any

simplifying assumptions. For the capacity method

described in paragraph (b)(4) of this section, use is

constant over time as determined by the capacity

constraint. Explain use projections and any simplifying assumptions. Reference to statistical projections

of recreation participation is encouraged.

(b) Use estimating techniques. Use one or more

of the following approaches for estimating recreation use for the with-project and/or without-project

conditions. The use of any other method should be

justified as conforming to the characteristics listed in

2.8.2(b). References to statistical estimates are

encouraged.

(1) Regional use estimating models. Regional

use estimating models are statistical models that

relate use to the relevant determinants based on

data from existing recreation slates in the study

area. The use of regional models can economize
73

on resources required for site-specific studies. In (ii) The most efficient and technically sound simithe absence of a regional model, estimate use by lar project procedure is based on per capita use

one of the site-specific methods described below. If curves (i.e., regression curves relating per capita

a use estimating model has already been rate of use to travel distance) from which use estideveloped for the region in which a proposed mates are derived. The similar project method inproject is to be located, use estimates should be volves the following steps:

obtained by the following procedure:

(i) Delimit the areas of origin for the proposed project or other area under study.

project (use of counties or parts of counties as

origin areas will facilitate gathering of data in subsequent steps).

(ii) Compute measures of the explanatory varia- and comparison of the respective recreation market

bles in the use equation for each origin area and for areas.

each year for which an estimate is required.

(iii) Calculate use from each area for each year. the differences between the similar project and the

(iv) Aggregate use from each area to get estimated annual use. (D) Determine the county populations within the

(2) Site-specific use estimating models. The preferred site-specific method of estimating use is a

use estimating model (UEM) that relates use per

1,000 of origin population to distance traveled, socioeconomic factors, and characteristics of the site

and alternative recreation opportunities. Use estimating models yield regression coefficients estimated from data gathered at a comparable existing site

or cross section of existing sites. The coefficients

are used to estimate visitation at a proposed site in

the same way as described for regional models.

Factors that influence demand for recreation, such

as characteristics of user populations and availability of alternative opportunities, are explicitly taken

into account by variables in the model. Because of

the influence of congestion during heavy use periods, it is desirable to distinguish use during summer

weekends and holidays. If data limitations do not

permit desegregation, explain treatment of seasonal use variation and any simplifying assumptions.

(3) Application of information from a similar pro- method provides no information on trip generation,

ject. willingness to pay cannot be evaluated by the travel

(i) If a UEM is not available and cannot be estimated because of data limitations, use may be estimated by the similar project method. This method

assumes that recreation demand for a proposed

project can be estimated from observations of visitation patterns at one or more existing projects with

similar resource, operations, and use characteristics. The alternatives under study are compared

with water resource projects and recreation resource areas for which trip generation and other

statistics are known. It is Important to obtain as

close a match as possible in type, size, and quality

of project; market area demographic and socioeconomic characteristics; existence and location of

competing recreation opportunities; and other variables that influence demand.

(A) Evaluate the characteristics of a proposed

(B) Select a similar project or area by comparing

characteristics of the proposed project with available information for existing sites; include evaluation

(C) Adjust the per capita use curve to account for

proposed project.

market area for the years in question, and derive

per capita use rates for each county population by

measuring road mile distance from the project to

the center of the most populated city within the

county (proxy for centroid of county population).

(E) multiply each county per capita rate by county

population and sum to get total use.

(F) Determine the percentage of total use that

the foregoing estimate represents; if 100 percent,

use as is; if less, adjust accordingly.

(iii) Justify assumptions used to adjust or modify

per capita use curves.

(4) Capacity method of determining use. If data

on use determining variables are unavailable and

are not cost effective to obtain, and if it can be

demonstrated that sufficient excess demand exists

in the market area to accommodate the additional

capacity supplied by a proposed project, use may

be assumed to be equal to capacity. Since this

cost method.

2.8.10 Evaluation procedure: Estimate value of

use with the project.

As noted in 2.8.2, three alternative methods can

be used to estimate recreation benefits:

(a) Travel cost estimate of willingness to pay

based on use estimating model or per capita use

curves— (1) Conditions under which TCM may not

be used. (i) Use was not estimated by a technique

relating trip-generation to distance to the site;

(ii) There is insufficient variation in travel distances to allow parameter estimation (for example,

urban slates); or
74

(iii) The project site is typically only one of several (iv) Given willingness to pay bids from an unbidestinations visited on a single trip. ased sample of users in the market area. the socio-

(2) Construction of a TCM demand curve. The

area under a demand curve based on travel costs

to a site approximates the willingness to pay for

access to the recreation opportunities there. This

estimate involves the following calculations:

(i) Convert round-trip distance from each origin

into monetary values by using the most recent U.S.

Department of Transportation average variable

costs in cents per mile to operate an automobile,

plus the opportunity cost of leisure time spent in

travel and on the site. Time costs vary according to

the alternative uses of time available to visitors and

are correlated with income, age, education, views or mail surveys. The preferred format is one

occupation, time of year, and day of week. Explain

values assigned to time and any simplifying

assumptions.

(ii) Construct a demand curve that relates "prices"

to total visits. Given a relationship between travel

costs and annual visitation from a use estimating

model or a per capita use curve, construct a

demand curve by gradually increasing travel cost

and calculating the total visitation associated with

each increase, until visitation falls to zero for all

origins.

(iii) Compute the area under the demand curve

plus any user charges or entrance fees. This value

measures the annual total willingness to pay for

recreation activities available at the site.

(iv) Discussion of travel cost method can be found

in Appendix 1 of this section. Appendix 1 is provided

for background information. Development and use

of techniques more refined than those presented in

this Appendix are encouraged.

(b) Contingent Valuation (survey) estimate of willingness to pay--( 1 ) Use of contingent valuation

method for dally or annual values. CVM may obtain

either daily or annual estimates of willingness to

pay. Multiply daily estimates by annual use obtained

previously. Annual estimates do not require use estimation except to demonstrate the net increase in

recreation use in the market area.

(2) Designing and using simulated markets to

identify the value of recreational resources as if

actual markets existed. Five steps are involved:

(i) Establish a market to the respondent.

(ii) Permit the respondent to use the market to

make trades and establish prices or values reflecting the respondent's individual evaluation of the

recreation opportunities bought or sold.

(iii) Treat the values reported by the respondent of

individual values for recreation, contingent upon the

existence of the market.

economic characteristics of respondents, distance

to the site, and available alternative recreation opportunities for each origin, obtain multiple regression estimates of average household value for the

proposed change in recreation opportunities for

households in each group.

(v) Multiply this value by the number of households in the group and sum the group values to estimate the aggregate willingness to pay if- the average values are annual; multiply this value by estimated annual use if average values are daily.

(3) Obtaining individual bids from personal interin which the respondent is required to answer "yes"

or "no" to questions if he or she is willing to pay a

stated amount of money to obtain a stated

increment in annual recreation opportunities. The

value is increased gradually until the highest

amount that the respondent is willing to pay is identified. Examples of question formats and further discussion of survey techniques can be found in Appendix 2 of this section. Appendix 2 is provided for

background information. Development and use of

techniques more refined than those presented in

this Appendix are encouraged.

(4) Developing regional contingent valuation

models. Regional models may be developed with

CVM as well as use estimating models. All survey

forms are subject to the clearance procedures of

the Office of Management and Budget.

(c) Unit day value approximation of willingness to

pay--

(1) Application of unit day values. See

2.8.2(c)(3).

(2) Selection of value. (i) If the UDV method is

used for economic evaluations, select a specific

value from the range of values agreed to by Federal water resource agencies. The product of the selected value times the difference in estimated

annual use over the project life relative to the without-project condition provides the estimate of recreation benefits.

(A) If evidence indicates that a value outside the

agreed-to range is more accurate, a regional model

or site-specific study should be conducted. Explain

the selection of any particular value within the published range.

(B) To explain the selection of a specific value, a

point rating method may be used to reflect quality,

relative scarcity, ease of access. and esthetic features. Appropriate use should be made of studies of

preferences, user satisfaction. and willingness to

pay for different characteristics; particular efforts
75

should be made to use estimates derived else- scribed in 2.8.2, estimate the value of the recreation

where from applications of the TCM and CVM tech- uses that would be diminished by the physical

niques. displacement expected to occur as a result of the

(ii) Account for site transfers in choosing unit day

values. An example of a point rating table that does

this and further discussion of unit day value selection can be found in Appendix 3 of this section. Appendix 3 is Provided for background information.

Development and use of techniques more refined

than those presented in this Appendix are encouraged.

2.8.11 Evaluation procedure: Forecast

recreation

 use diminished with project. diminished as estimated in 2.8.12. However, if

Using the appropriate method described in 2.8.9,

forecast the recreation resource uses that would be

diminished due to physical displacement expected

because of the plan or project.

2.8.12 Evaluation procedure: Estimate value of Tables 2.8.14-1 and 2 are suggested presenta-

 recreation use diminished with project

Using the appropriate methods described in

2.8.10 and selected by the appropriate criteria deplan or project. In determining project net benefits,

account for changes in recreation use of an existing

resource and/or project as a result of transfers to

the plan or project under study.

2.8.13 Evaluation procedure: Compute net

project benefits.

Compute the project benefit as the difference

be-tween the gross value of recreation use as

estimated in 2.8.9 and the value of recreation use

excess capacity for any activity exists in the study

area, benefits are the user cost savings plus the

value of any qualitative differences in recreation.

2.8.14 Report and display procedures.

tions for reports that include recreation as a purpose.

Table 2.8.14-1 Recreation Capacity and Use (19--) 1

Without project With project

Capacity Use Surplus or deficit Capacity Gross use Displaced

use

Plan 1...................................................... ......................... ......................... ......................... .................. ...................... ..................

Plan 2...................................................... ......................... ......................... ......................... .................. ...................... ..................

Plan 3 ..................................................... ......................... ......................... ......................... .................. ...................... ..................

Plan X .................................................... ......................... ......................... ......................... .................. ...................... ..................

Prepare for representative project years 1

Table 2.8.14-2 Annualized Recreation Benefits, Recommended Plan

Recreational activity Net value Value of Value of 

gross use displaced use

Specialized.............................................................................. ............................ ........................... ......................................

General .................................................................................... ........................... .......................... ......................................

Appendix 1 to Section Vlll—Travel

Cost Method

 The basic premise of the travel cost method

(TCM) is that per capita use of a recreation site will

decrease as the out-of-pocket and time costs of

traveling from place of origin to the site increase,

other things remaining equal. The method consists

of deriving a demand curve for a recreation site by

using the variable costs of travel and the value of

time as proxies for price. By use of data collected

from users of existing sites, the travel cost method

permits development of (1 ) estimated use of the

proposed site; (2) a per capita demand function for

recreation at the site; and (3) an estimate of the

NED recreation benefits of the site. The travel cost

procedure consists of two steps: estimating use

and deriving a demand curve.
76

(a) Estimating use -- (1) Use estimating models. (i) information for existing sites; include evaluation and

The preferred method for estimating use is a use

estimating model (UEM) that relates use at a proposed site to distance traveled, socioeconomic factors, and characteristics of the site and alternative

recreation opportunities. Use estimating models are

based on data gathered at an existing site or on a

cross section of existing sites with the resultant statistical coefficients used to estimate use at a proposed site. Factors that influence demand for recreation, such as characteristics of user populations

and availability of alternative opportunities, are

explicitly taken into account by variables in the

model.

(ii) Application of an existing UEM to a proposed

site involves the following steps: (A) Identify the

areas of origin for the proposed project (use of

counties or parts of counties as origin areas facilitates gathering of data in subsequent steps); (B)

compute measures of the explanatory variables in

the use equation for each origin area and for each

year an estimate is required; (C) calculate use from

each area and for each year; and (D) aggregate use

from each area to get estimated annual use.

(2) Similar project use estimation. (i) The similar

project procedure is based on the concept that recreation demand for a proposed project can be estimated by observing the visitation patterns at one or

more existing projects with similar resource, oper- (1) The travel cost method is based on the correation, and anticipated recreation-use characteristics. spondence between increasing the distance from

The procedure involves the graphic or statistical areas of origin to the site and increasing the cost or

matching of the recreation site alternatives under price of recreation at the site. The second step of the

study with existing water resource projects and procedure consists of calculating total use at

recreation resource areas for which use statistics different incremental distances (prices); it is based

and other information are known. The objective of directly on use estimator models or per capita use

the similar project procedure is to obtain as close a curves. The result is a demand curve for the site

match as possible in type, size, and quality of being evaluated that relates "prices" to total visits.

project; market area demographic and socioeco- Distances are converted to dollar values using per

nomic characteristics; the existence and location of mile conversion factors reflecting both time and

competing recreation opportunities; and other out-of-pocket travel costs. The area under the

demand influencing variables. demand curve plus any user charges or entrance

(ii) The most efficient and technically sound similar

project procedure is based on per capita use curves

(i.e., regression curve relating on per capita rate of (2) The estimate of recreation use for a project

use to travel distance) from which use estimates are derived from application of a per capita use curve or

derived. Per capita use curves have been estimated UEM model yields an initial point on a resource's

for 52 existing reservoirs. An overview of the demand curve. This point is the quantity of use that

1

methodology adapted from Brown, et al., is provided would be demanded at a zero price. For example,

below. assume that the appropriate per capita use rates

(iii) Briefly stated, use of the similar project prediction method involves the following steps:

(A) Evaluate the characteristics of a proposed

project or area under study.

(B) Select a similar project or area by comparing

characteristics of the proposed Project with available

comparison of the respective recreation market

areas.

(C) Adjust the per capita use curve to account for

the differences between the similar project and the

proposed project.

(D) Determine the county populations within the

market area for the year in question and derive per

capita use rates for each county population by

measuring road-mile distance from the project to the

center of the most populated city within the county

(proxy for centroid of county population).

(E) Multiply the contribution from each county per

capita rate by county population, and sum to get total

use.

(F) Determine the percentage of total use that

the foregoing estimate represents. If 100 percent,

use as is; if less, adjust accordingly.

(iv) A critical shortcoming of this similar project

method is the subjectivity inherent in the manual

adjustment of the per capita use curve required to

account for demand factors other than travel distance. The reliability of the method can be enhanced

through experience, but it cannot be expected to

approach the reliability of the more sophisticated

statistical models.

(b) Deriving demand in the travel cost method.

fees measure the recreation benefits attributable to

the site. The procedure is described in detail below.

have been estimated as follows:

Origin Population Distance Visits per Estimated

capita visitation

A ............ 10,000 10 3 30,000

B ............ 1,000 20 2 2,000

C ............... 3,000 30 1 3,000

 Brown, R., et al., Plan Formulation and Evaluation Studies: Total........... .............. .............. ............. 35,000

1

Recreation. Vol. II. U.S. Army Engineer Institute for Water Research. 

1974 
77

(3) This estimate of 35,000 yields an initial point Estimated Visitation

on the resource's demand curve. To find sufficient

points to determine the entire demand curve, it is

necessary to make small incremental increases in

the price of participation and to measure the quantity of use that would be demanded given these

chances. This is equivalent to moving the project

farther and farther from the potential users, requiring them to pay more and more in travel costs. As

the simulated distance increases, use decreases,

and for each increment in distance a new use estimate is computed using either the use estimating

model or the per capita use curve. The new use

estimates are the various quantities of recreation

that would be demanded at increasing prices.

(4) For example, assume that an increment of

10 miles in travel distance is used to simulate an

increase in cost for the proposed project described

above. The use estimate of use would then be:

Origin Population distance

Simulated

(Actual 10)

Visits per Estimated

capita visitation

A .......... 10,000 20 2 20,000

B .......... 1,000 30 1 1,000

C .......... 3,000 40 0 0

 Total ................. ................. ................. 21,000

 (5) This would be a second point on the resource's demand curve; the quantity demanded

(21,000 visits) at a price equivalent to the travel

cost associated with an increment in distance of 10

miles. (A discussion of the proxy for price used to

assign a dollar value to this increment is in paragraph (6)(i) of this appendix.)

(6) Remaining points on the resource demand

curve are then estimated by making continued increments in the price (simulated increases in distance) until the anticipated visitation from all areas

of origin is zero. In the example above using 10 -

mile increments, the visitation expected with simulated increases in distance would be:

[Simulated increase in mileage]

Origin 0

10 20 30 

miles miles miles

A ................ 30,000 20,000 10,000 0

B ................ 2,000 1,000 0 0

C ................ 3,000 0 0 0

 Total 35,000 21,000 10,000 0

(i) Proxy for price. (A) To determine the price at

which the various quantities of use are demanded,

the incremental increases in distance are simply

converted into the costs that would be incurred by

the recreation users if they were required to travel

the additional mileage. The variable or out-of--

pocket travel costs are used as the proxy for price,

since these are the costs that potential users

would be most aware of when making a decision

about whether to visit a particular resource area.

(B) The conversion of mileage to price should

use the most current published results of studies

conducted periodically by the U.S Department of

Transportation concerning the average cost of operating an automobile. As an example, average

variable cost estimates for 1976 are summarized

below (U.S. Department of Transportation, 1977).

Average Variable Costs, in cents per mile, to

Operate an Automobile

Variable cost category SubcomAutomobile type

Stand- Comard pact pact Average

Maintenance,

accessories, parts, and

tires.... 4.2 3.4 3.1 3.6

Gasoline and oil.... 3.3 2.5 1.8 2.5

Taxes on gasoline, oil,

and tires ..................... 0.9 0.6 0.5 0.7

Total 8.4 6.5 5.4 6.8

(C) The variable cost reflects the average out-ofpocket cost per mile to operate various types of

automobiles. It does not include such fixed costs

as depreciation, insurance, and registration, since

those costs would generally not affect the potential

user's decision to travel the additional mileage for

recreation purposes.

(D) Two adjustments are required, however.

before this cost can be used as the proxy for price.

The first is an adjustment to round-trip mileage.

The distance measure used in the per capita use

curve or regional estimator is one-way mileage,

while the recreation user must incur the variable

costs while traveling to and from the project, so the

cost per mile is doubled. Since more than one
78

user may arrive in each vehicle a second universally accepted formulation of this tradeoff

adjustment must be made to distribute the travel has been established and empirically tested. In

costs of the trip between the number of users one proposed formulation, time is valued as onetraveling in each vehicle. This is readily third the average wage rate in the county of origin

accomplished by using the average number of for adults and one-fourth of the adult value

users per vehicle determined from the survey of (one-twelfth of the wage rate) for children. Any

the existing sites used to develop the per capita method used to value time should be supported by

use curve or regional estimator. documenting evidence. Both travel and onsite time

(E) The variable travel costs are the proxy for

price associated with the simulated increase in distance used to derive the resource demand curve. (iii) Benefit computation. (A) The final

Using the average variable cost for all three types

of automobiles (6.8 cents per mile and using a hypothetical average of 2.7 persons per vehicle, the

proxy for price for a simulated increase in distance

of 10 mites in the above example would be equal

to 80.50 (6.8 cents per mile times 2 for round-trip

mileage, divided by 2.7 persons per vehicle, times

10 mile increment).

(ii) An adjustment for the opportunity cost of

time. (A) The use of variable travel costs alone In (B) The travel cost approach can be used for

the development of the demand schedules ignores

the effects of time on recreation decisions. If time

is ignored, the demand schedules are constructed

under the hypothesis that increasing distance decreases use only because of higher money cost.

However, the additional time required to travel the

increased distance would seem to be a deterrent

equal to or greater than the out-of-pocket money

costs. The exclusion of the time factor introduces a

bias into the derived demand schedule, shifting it

to the left of the true demand schedule and

resulting in an underestimation of the recreation

benefits.

B) The opportunity cost of time is the value of

work or leisure activities foregone to travel to and

recreate at the site. The opportunity cost for a

person whose work time is variable is measured as

income foregone during the recreation visit and

associated travel. Most people, however, are constrained by a fixed work week and receive payload

vacation days. Recreation occurring during periods

where no working time is lost incurs only leisure

time costs. This value may range between 0 (if the

recreationist would not have engaged in any other

leisure activity in the absence of the observed recreation) and the wage rate (if the alternative leisure

activity was valuable enough to forego earnings,

given that opportunity).

(C) Where direct survey data on time costs are which estimates are to be made. A series of surnot available, published statistics or studies of veys at existing sites can provide such basic data,

work-leisure choices and wage rates may be used which would normally include total use, timing and

to justify particular assumed values. One patterns of use, characteristics or users, and users

procedure that may be used to accommodate the areas of origin.

disutility of time is to assume a known trade off

between time and money; however, but no

costs should be included in the derivation of total

willingness to pay for access to the site.

computational step in the travel cost approach is to

measure the area under the demand curve. This

area is equal to the amount users would be willing

to pay but do not have to pay for the opportunity to

participate in recreation at the resource being

evaluated. Any user charges or entrance fees

should be added to this value to determine the

gross value of the resource escalated with the

specified management option.

evaluating either the with-project or without-project

conditions as long as a use estimating model or a

per capita use curve is available for estimating use

under the specified condition. To evaluate the without-project condition, estimate the value of the recreation that would be lost at a site if a water resource development project were developed. To

evaluate a with-project alternative, estimate the

value of the new recreation opportunities that

would be created. If a use estimator is not

available for evaluating either the without-project

conditions or one of the with-project conditions, the

techniques described in other portions of this

manual should be used.

(C) The procedure described above is

applicable to any type of activity or groups of

activities for which use can be described by a use

estimating equation or per capita use curve. The

separation of any use from overnight use or

sightseeing from other day use activities, for

example, is dependent upon the specificity of the

survey data and the model formulation.

 (c) Data requirements. (1) The development of

use estimator models as described above requires

that data from existing areas be systematically collected. The major requirement is that the data on

use and users of a range of facility types and locations span the proposed types and locations for
79

(2) Methods of data collection that have proved eral possible kinds of response bias. Several techfairly satisfactory involve a short handout niques are available for obtaining the individual

questionnaire or interviews of a small sample of bids, which are the basic data for CVM.

randomly selected users of the different recreation

areas. It is important that reliable total visit statistics

be obtained for each existing area being

investigated. This can usually be done satisfactorily

with judicious use of traffic counters at most

water-based recreation areas. If totals are collected

throughout the season, samples for questionnaires

or interviews need be drawn only on a few days - on

both weekends and weekdays, as patterns are

likely to vary greatly between them.

(3) The number of questions asked may also be

limited. The major concerns are the origin and purpose of the trip and limited information about the

users. A representative range of areas. facilities.

and locational proximities should be covered in

such surveys. Fully adequate methods that are relatively inexpensive, entail a minimum of difficulty at

the site and to the user, and yield meaningful results are available.

Appendix 2 to Section Vlll Contingent

Valuation (Survey) Methods

(a) Overview. (1) Contingent valuation methods

(CVMs) obtain estimates of changes in NED benefits by directly asking individuals about their willingness to pay (WTP) for changes in quantity of recreation at a particular site. Individual values may be

aggregated by summing the WTPs for all users in

the area.

(2) Contingent valuation methods consist of designing and using simulated markets to identify the

value of recreation just as actual markets would, if

they existed. Three basic steps are involved: (i)The

analyst establishes a market to the respondent; (ii)

he permits the respondent to “use” the market to

make “trades” and to establish prices or values that

reflect the respondent's individual valuation of the

recreation opportunities “bought” or “sold”; and (iii) right to use (the recreation facility) for one year.”

the analyst treats the values reported by the

respondent as individual values for the recreation,

contingent upon the existence of the described

market. The respondent's bids are used with the

data contained in the market description (step i) to

estimate the aggregate value of the recreation

being studied.

(3) Contingent valuation methods are particularly

appropriate for evaluating projects likely to be one

of several destinations on a single trip and projects

that will result in a relatively small change in the

quality of recreation at a site. Contingent value results may be adversely affected unless questions

are carefully designed and pretested to avoid sev-

(b) Iterative bidding formats. (1) Iterative bidding

surveys ask the respondent to react to a series of

values posed by the enumerator. Following establishment of the market and a complete description

of the recreational good, service, or amenity to be

valued, the respondent is asked to answer “yes”

or “no” to whether he is willing to pay the stated

amount of money to obtain the stated increment in

recreation. The enumerator iteratively varies the

value posed until he identifies the highest amount

the respondent is willing to pay. This amount is the

respondent's “bid” for the specified increment in

recreation.

(2) Iterative bidding techniques are most

effective in personal interviews. Mail survey

formats have also been used in research studies.

These typically ask the respondent to answer

“yes” or “no” to a small number of specified

values in iterative questions and, finally, ask an

open-ended question: “Now, write down the

maximum amount you will be willing to pay, $

———— .” At present, mall survey applications of

the iterative bidding technique have not been

adequately tested and cannot be recommended.

(3) The recreation facilities to be evaluated will

be described in quantity, quality, time, and location

dimensions. These descriptions should be hypothetical in the sense that they do not precisely describe features of actual sites or proposed

projects, but they should be precise enough to give

the respondent adequate information on which to

base a valuation. To permit estimation of regional

models, quantity, quality, and location dimensions

should be varied and the iterative bidding exercise

repeated. Verbal descriptions should be precise,

and, when practicable, pertinent aspects of the

facilities should be displayed or depicted

nonverbally (e.g., with photographs, drawings,

motion pictures, scale models).

(4) In most cases, the good to be valued is “the

The responses obtained are thus annual

measures of the individual's willingness to pay for

a given increment or decrement in recreation

opportunities. Bidding formats that define the good

in some other terms (e.g., day of use, trip) can also

be used in some applications as long as

appropriate estimates of numbers of days of use

and trips are available to permit calculation of

annual values.

(5) The institutional rules pertaining to the hypothetical market will be described in sufficient detail

so that the respondent knows his rights and the

rights of all others in the market. These rules

should be realistic and credible, they should place
80

the respondent in a role and encourage market be- estimates. The incremental version is preferred

havior with which he is familiar, and they should be

of a kind generally viewed as just, fair, and ethically

sound. They should be nonthreatening. Formats

that threaten the respondent with a welfare shock

that he may view as unfair should be avoided.

(6) The method of payment (called payment vehicles) should be carefully pretested. At the pretest

stage, always include a neutral vehicle, e.g., "The

money collected will be placed in a trust fund and

devoted entirely to providing (the good)."

(7) The respondent should be given price or value

information and asked, "Would you buy?" With the

clear understanding that “if no, you would go

without.” The wording “Would you be willing to pay

@ @ @ ?” should be avoided because some

respondents may interpret it as an appeal for

voluntary contributions. The question must be

worded to suggest the pragmatic “take it, or leave

it” atmosphere of the marketplace.

(8) Depending on the “yes” or “no” answer, the

price or value is varied iteratively and the question

repeated until the respondent’s point of indifference

between the money and the good is identified. Early

iterations may change the price widely until the

enumerator senses that he is approaching the

respondent's indifference point; then iterative price

variations will become finer. eliciting a “yes” response is identified.

(9) The starting price quote (called "starting

point") will vary across respondents. The particular

starting point assigned to a given respondent will be

chosen randomly.

(10) The payment vehicle should be specified.

Payment vehicles that may generate an emotional

reaction should be avoided because they might introduce a confusing element into the bid data.

Vehicles based on increments in taxes, utility bills,

and hunting or fishing license fees may generate

such reactions.

(11) General formats for iterative bidding questions are presented below, followed by specific examples. The questions must be specific to the particular measure of value to be elicited from the respondent. WTP formats should always be used;

they may be incremental (willingness to pay for an

increment in a desired recreation opportunity) or

decremental (willingness to pay to availed a threatened decrement in a desired recreation opportunity). The incremental format has two major advantages: it is the theoretically correct measure and,

since it offers the respondent the (hypothetical)

chance to pay for a desired good, it is unlikely to

provoke an offended reaction. The decremental

format, which asks the respondent how much he

would pay to avoid a change he does not want, may

seem unfair or morally offensive to some, and thus

may elicit biased or otherwise unreliable value

wherever it is credible.

(12) The incremental version may not be

credible if the real world experience is typically one

of the decrements rather than increments. For

example, the question “if a new, unspoiled natural

recreation environment could be created and the

right to use it would cost $———— , would you

buy?" may be rejected as fantasy by some

respondents in a world in which “unspoiled natural

recreation environments" are fast disappearing. In

such circumstances, it may be necessary to resort

to decremental formats. However, since

reasonable doubts can be raised, a priori. about

the efficiency of WTP decremental formats, the

following precautions are essential: The format

designed must be the most consistent and

plausible and least offensive possible; and at least

two different formats must be pretested to permit

statistical testing for differences in their

performance.

(13) General examples of the WTP formats

are:

WTP incremental: “If you had the opportunity to obtain [describe

an increment in recreation facilities, hypothetical market rules,

and payment vehicle], would you pay [starting price]? Yes (pay)

---- Or would you refuse to pay, and do without (the increment)?

No (pay) --” Reiterate with new prices until the highest price

WTP decremental (example 1): “[Describe a decrement in

recreation facilities] will occur unless [describe market rules and

payment vehicle]. Would you pay [starting price] to avoid [the

decrement]? Yes (pay) ---- Or would you refuse to pay, and thus

permit [the decrement]? No (pay) ---” 

WTP decremental (example 2): “[Describe a recreation facility

currently available to respondent] is currently available [describe

current market rules, existing payment vehicle, and existing

price]. Unless [the existing price] is increased [describe a

decrement] will occur. Would you pay [starting price, which is

some increment over the existing price] in order to prevent [the

decrement]? Yes (pay)———— Or would you refuse to pay,

and thus permit [the decrement]? No (pay) ———— “ Reiterate

. . . 

(14) Since some respondents may bid only

zero amounts to WTP questions, it is important to

identify which zero bids represent true zero

valuations and which, if any, represent a protest

against the market rules or payment vehicles in the

bidding format. Check questions should always be

used to probe “zero” responses to WTP formats,

e.g., “Did you bid zero because (check one):”

a. You believe [the stated increment] would be

worth nothing to you?

b. You believe [the payment vehicle) is already

too high?

c. You believe [the stated increment] would be

of value, but you do not think it is fair to expect (the

respondent’s class of citizen, e.g., hunting license

holders, utility customers) to pay for it?
81

(15) Answers (b) and (c) above are “protest” re- of expected user days. The “annual value

sponses, addressed not to the value of the good but

to some element of the question format. Protest

bids should be recorded but eliminated from

calculations to estimate values. Formats that elicit

more than 15 percent protest responses in pretests

should be discarded, since a high incidence of protest bids may indicate that some nonzero bids are

also distorted.

(c) Noniteratlve bidding formats. (1) Noniterative

bidding formats are adaptable to implementation

with mail surveys. There are two kinds of noniterative formats: close-ended, which ask respondents to

answer "yes" or “no” to a single stated value; and

open-ended, which ask the respondent to write

down the maximum amount he would be willing to

pay. A variant of the open-ended format asks the

respondent either to select his maximum WTP from

a list of stated discrete values or to write down his

maximum WTP. Noniterative bidding formats are

unlikely to be as reliable as iterative formats.

(2) Noniteratlve mail survey formats may be used

only for analysis of small projects. These formats

must, to the extent practicable, have the basic attributes of the personal interview formats described

above. Survey instruments should include color

photographs and, if appropriate, other nonverbal

stimuli.

(3) Open-ended bidding formats should be used

With one half of the sample and close-ended

formts with the other half. The bids obtained should

be analyzed to determine if the format influences

the results to a significant degree. Examples of

these formats are presented below.

(4) Open-ended. "Due to pressures of population

growth and economic development, 10 miles of

trout stream such as that shown in the accompanying photograph are likely to be converted to other

uses (e.g., a reservoir) and thus lost for trout fishing.

Assume that the only way to preserve this 10 mile

stretch for trout fishing is for trout fishermen to

agree to buy an annual pass to fish in that stream

segment. The money collected would pay for presentation of the stream section. If the stream segment was __ miles from your home, and you could

expect to catch __ trout in a typical day's fishing

there, what is the maximum amount you would pay

for the annual fishing pass? Answer: $__ per year.

(5) Closed-ended. The information presented in

the open-ended format does not change, but the

final question reads: “ * * * and an annual fishing

pass costs $__ (assign dollar amounts randomly to

respondents), would you buy one? Answer: Yes __

No __.”

(d) Use estimation with CVMs. (1) All of the contingent valuation procedures described above generate annual value estimates directly, instead of first

generating values per user day and then estimates

estimation” procedure is superior because it is

more reliable, it automatically corrects for the economic influence of existing recreation

opportunities, and it is better adapted to estimating

activity and existence values where both are

important.

(2) Contingent valuation formats can also be

designed to estimate values per user day but can

have questions worded in terms of a day's activity.

In the case of proposed increments, great care

must be taken to determine the respondent's

valuation of a day at the proposed site, given the

continued availability of existing sites. Estimates of

use may be made either by collecting such

information as part of the survey or by other

approved methods.

(3) To collect use information in the survey, proceed as follows:

(i) For decrements in recreation opportunities,

ask (A): how many trips the household made (1)

last year or (2) in a typical year, if last year was unusual for any reason; (B) how many days the trip

lasted; and (C) how many household members

participated in each trip.

(ii) For increments, ask (A): the same

information as for decrements, but about existing

recreation sites similar to the proposed increment.

Then, if the proposed increment (described with

verbal and nonverbal stimuli) were available. (B)

how many trips, for how long, and with how many

family members for the proposed increment; and

(C) how many trips, for how long, and with how

many family members in total for both the existing

and proposed sites.

(e) Using contingent valuation methods. Contingent valuation methods can be used to develop

value estimator models or to estimate recreation

benefits for a specific proposed project. These two

uses are discussed below.

(1) Value estimator models. (i) Value estimator

models (VEMs) are statistical models of the relationships between the bid and selected

characteristics of the site(s) and user populations.

A typical model has the form:

V = F(E , D , C , A , S , Q, I)

jk k jk k k jk j j

Where

V is the value to household k of the specified change in recre- jk

ation opportunity at site j.

Ekis a vector of social and demographic variables pertaining to

household k, typically including income, ethnicity, and education.

D is the distance from the home of k to site j. jk

C is a measure of the capacity use of the existing stock of

k

recreation facilities similar to those at site j in the market area

centered at k’s home.
82

Ak is distance from the home of k to the nearest existing

alternative facility offering recreation opportunities similar to

those at site j.

S is an index of the availability of substitute recreation facilities jk

(e.g., ocean beach for reservoir beach) in the market area

centered at k’s home.

Q is a vector of variables describing the quality of recreation at

j

site j.

I

j

 is the increment or decrement in recreation at site j specified in

the contingent valuation mechanism.

(ii) This method has several desirable characteristics: (A) The V are current WTP estimates of

Jk

value for increments and decrements in recreation

opportunity; (B) the V are annual values of the ex- J

istence of the recreation facilities at site j, and thus

replace user days and unit day values; (C) the VJk

are not arbitrarily set at the same daily value for all

users, as are unit day values; (D) the variables in

vector Q provide a systematic statistical basis for j

estimating how VJ varies with site quality; (E) the

variables Ck,, Sjk, andk A provide a systematic

statistical basis for adjusting V to account for

J 

competing and substitute facilities.

(iii) Estimating a value estimator model requires

the following steps:

(A) The final bids, after any calculations

necessary to convert them to annual or daily

household values, serve as the observations of the

dependent variable.

(B) The observations of demographic variables

serve as observations for the first set of independent variables.

(C) Existing recreation resource inventories and

planning data provide the basis for specifying the

second set of independent variables, i.e., those describing the existing stock of recreation opportunities. The location of each respondent's home is recorded on the completed survey instrument, and,

together with the inventory and planning data for

existing resources, permits calculation of individual

observations of those variables that relate the

existing stock of recreation opportunities to the

location of the respondent's home. To complete

the task of specifying these variables, some

indices of the availability and quality of the existing

recreation stock must be developed. These

include indices of facilities and conveniences, and

of site quality, especially esthetic quality.

(D) Site-specific descriptors serve as the third

and final set of independent observations. These

are the data presented to the respondent and

upon which he based each of his bids. The

estimated esthetic score of each photograph used

in the bidding process serves as one of these sitespecific descriptors. Other descriptors are the

information presented to the respondent on size,

distance, etc.

(E) Using the best available econometric techniques, the equation is then estimated. The dependent variable is expressed in terms of annual

value per household eliminating the need for separate estimation of user-days and the mean value of

a user-day.

(iv) Using an existing VEM to estimate the

recreation benefits of a proposed project involves

the following steps:

(A) Determine the market area for the

recreation services affected by the project. If the

market area is expected to exceed 120 miles,

document the reasons.

(B) Determine from census data the

demographic characteristics of the market area

population.

(C) Divide the market area into groups on the

basis of demographic variables and distance from

the proposed site. One such group might be

“households headed by a male of (ethnic group)

with 10 to 12 years of education and household

income between $12,001 and $15,000 annually,

living 51 to 75 miles away from the site.”

(D) Calculate separately for each market

subarea the values of the variables describing

existing recreation facilities obtained from inventory

and planning data.

(E) Obtain from project planning data the

values of the variables describing project-specific

attributes.

(F) Use the specified data and the fitted model

to estimate the household value for the proposed

increment or decrement in recreation opportunities

for a typical household in each group.

(G) Multiply this value by the number of households in the group, and sum the group values to

get the aggregate benefit estimate.

(2) Applying CVM to a specific proposed

project. In some circumstances, CVMs may be

used to estimate the recreation benefits of a

specific proposed project. Great care must be

taken in the design of the survey instruments and

editing of the data, however, because some

respondents may try to influence the outcome of

the analysis by their bidding responses. The survey

design and sampling requirements of such a study

are discussed under “Data requirements” below.

(3) Data requirements -- (i) Survey design. For

contingent valuation exercises, the survey instrument must contain two major sections: One for

bidding formats and one for collecting appropriate

demographic data; a brief final section should elicit
83

respondent feedback. Since there is no reason to (C) Random sampling methods are also used

prohibit the use of additional sections, other data for mail surveys. At least two followup mailings are

useful for recreation planning may be gathered necessary to reduce nonresidence. In addition, a

during the interview. Additional sections may in- random telephone survey of 10 percent of the nonclude recreation activities, attitudes, recreation responses after the second followup mailing is

preferences, and protected use of proposed new necessary. The results of the telephone survey

recreation facilities. To minimize inconvenience to must be analyzed separately in order to permit

respondents and to avoid respondent fatigue and testing for non response bias.

lapses of concentration, the complete interview

should typically not require more than 30 minutes.

(ii) Pretesting. (A) The basic survey instrument,

including bidding formats and questions to collect similar, in some respects, to the procedures

additional data (e.g., demographic data, respond- described above. Aspects that are different are

ent's history of use of recreation facilities. etc.), highlighted in the following:

must be pretested by using a sample of at least 30

respondents in order to generate a data set

permitting appropriate statistical tests. The pretest

sample should not be drawn from the same

population as the actual study sample. Sampling

procedures for the pretest are not especially

crucial, but an attempt should be made to obtain a

demographic cross section of users. A variety of

bidding formats, hypothetical market designs, and

payment vehicles should be pretested.

(B) Nonresponses and protest responses should for beneficial effects. In the latter case, it may be

be tabulated for all bidding formats. Those formats necessary to use photographs of a completed

eliciting large proportions (i.e., more than 15 per- similar project.

cent) of such responses should be eliminated or

redesigned and retested. Statistical tests for

information bias, vehicle bias, and starting point

bias should be performed, and formats that

generate any of these biases should be eliminated,

or redesigned and retested.

(iii) Sampling. (A) Following pretesting and, if

necessary, redesign, a sampling frame for the

malign survey should be drawn. The household is

the basic sampling inlet. For estimation of activity

values, samples may be drawn from reliable list of

participants (e.g., fishing license holders), if available. For activity values where no such lists exist,

and for existence values, the sample must be

drawn from the regional population of households.

(B) Sampling procedures should have the performance characteristics of random sampling. To

save travel time in a personal anatomy survey,

randomized, cluster sampling is permissible,

provided that no cluster is larger than one-thirtieth

of the sample size, Sample size should be no

fewer than 200 households. The respondent

selected to answer on behalf of the household

should preferably be the head-of-household or

spouse of the head. In the absence of the head

and spouse, another adult member of the

household may be interviewed, provided he or she

has assumed a responsible life-role (e.g., is a

parent or is financially self-supporting).

(iv) Specific proposed project requirements. (A)

Procedures for valuing recreation benefits using

project-specific iterative bidding formats are

(B) The population to be sampled is that of the

market area(s) for the various categories of

recreation opportunities that would be beneficially

or adversely affected. Survey instruments follow

the basic format described above, with the major

exception that the bidding formats provide

site-specific information on the proposed project

itself. Photographs and other stimuli should be

focused on the without-project condition for

adverse effects and on the with-project condition

(C) Individual bid data must be used as

observations to test carefully for biases, including

vehicle bias, information bias, starting point bias,

and strategic bias, using established statistical

testing procedures. Evidence of bias should (1)

lead to elimination of formats producing bias at the

pretest stage, and (2) lead to reporting of any bias

remaining after all instrument redesign possibilities

have been exhausted. Final bids are aggregated

across the sample and then projected to the

market area population. These “population

aggregate bids” are then used as estimates of the

total value, positive or negative of the effects,

beneficial or adverse, of the proposed increments

or decrements in recreation opportunities. Net

project recreation effects are calculated as in (e)

(1) of this appendix.

Appendix 3 to Section Vlll—Unit

Day Value Method

The unit day value (UDV) method for estimating

recreation benefits relies on expert or informed

opinion and judgment to approximate the average

willingness to pay of users of Federal or Federally

assisted recreation resources. If an agency can

demonstrate that more reliable TCM or CVM estimates are either not feasible or not justified for the

particular project under study, as discussed under

applicability criteria, the UDV method may be used;
84

by applying a carefully thought-out and adjusted unit “Specialized” refers to a recreation day involving

day value to estimated use, an approximation is those activities for which opportunities in general are

obtained that may be used as an estimate of project limited, intensity of use is low, and a high degree of

recreation benefits. skill, knowledge, and appreciation of the activity by

(A) Implementation. (1) When the UDV method is

used for economic evaluations, planners will select a (3) Estimates of total recreation days of use for

specific value from the range of values provided in both categories, where applicable, will be developed.

the most current published schedule. Application of The general category comprises the great majority of

the selected value to estimated annual use over the all recreational activities associated with water

project life, in the context of the with- and with- projects, including swimming, picnicing, boating and

out-project framework of analysis, provides the esti- most warm water fishing. Activities less often

mate of recreation benefits. associated with water projects, such as big game

(2) Two categories of outdoor recreation days,

general and specialized, may be differentiated for

evaluation purposes. “General'' refers to a recreation

day involving primarily those activities that are

attractive to the majority of outdoor users and that

generally require the development and maintenance

of convenient access and adequate facilities.

the user may often be involved.

hunting and salmon fishing, are included in the

specialized category. A separate range of values is

provided in a conversion table (Table VIII-3-1) for

each for each category and for fishing and hunting to

facilitate adoption of a point system in determining

the applicable unit values for each individual project

under consideration.

Table VIII-3-1 Conversion of Points to Dollar Values

Activity categories

Point values

0 10 20 30 40 50 60 70 80 90 100

General recreation (Points from Table VIII-3-2) 1.60 1.90 2.10 2.40 3.00 3.40 3.70 3.90 4.30 4.60 4.80

General fishing and hunting (Points from Table

VIII-3-2) 2.30 2.60 2.80 3.10 3.40 3.70 4.10 4.30 4.60 4.70 4.80

Specialized fishing and hunting Points from

Table VIII-

 3-3) 11.20 11.50 11.70 12.00 12.30 13.50 14.70 15.60 16.80 18.00 19.00

Specialized recreation other than fishing and

hunting (Points from Table VIII-3-3) 6.50 6.90 7.40 8.00 8.50 9.60 10.60 12.80 14.90 17.00 19.00

Note.--Adjust dollar value for subsequent years to reflect changes in the Consumer Price Index after July 1, 1982

(4) When employing this method to determine (I) General recreation (Table Vlll-3-2). Activities in this

recreation benefits, select appropriate values from the category are those associated with relatively intensive

range of values provided. If evidence indicates a value development of access and facilities as compared to

outside the published range, use the TCM or CVM the specialized recreation category. Generally,

method. progressively higher physical standards for each unit of

(5) In every case, planners are expected to explain

the selection of any particular value. To assist in

explaining a specific value, a point rating method may

be used. The method illustrated here contains five (ii) Specialized recreation (Table Vlll-3-3). (A)

specific criteria and associated measurement This category includes those activities whose values

standards designed to reflect quality, relative scarcity, are generally lowered, if not actually excluded, by the

ease of access, and esthetic features. Since the list of type of development that enhances activities in the

criteria and weights assigned may vary with the general recreation category. Thus, extensive or low

situation, public involvement should occur in the value density use and development constitutes the higher end

determination process. Planners in the various of this range of values (e.g., big game hunting and

agencies are also expected to make appropriate use of wilderness pack trips). Also included in the upper end

studies of preferences, user satisfaction, and of the range are relatively unique experiences such as

willingness to pay for different characteristics. When inland and marine fishing for salmon and steelhead,

these studies are used, particular efforts should be white water boating and canoeing, and long-range boat

made to use estimates derived elsewhere from cruises in areas of outstanding scenic value. Examples

applications of the TCM and CVM techniques, to of activities to which values at the lower end of the

support the value selected. range would be assigned include upland bird hunting

carrying capacity is involved in selecting higher unit

values, and these may be accompanied by larger

related nonproject costs.

and specialized nature photography.
85

Table VIII-3-2 Guidelines for Assigning Points for General Recreation

Criteria Judgement factors

(a) Recreation Two general activities Several general Several general Numerous high

 experience activities activities: more than quality value 1

2

one high quality value activities: some

activity general activities

Total points: 30

Point value: 0-4 5-10 11-16 17-23 24-30

(b) Availability of Several within 1 hr. Several within 1 hr. One or two within 1 None within 1 hr. None within 2 hr.

 opportunity travel time: a few travel time: none hr. travel time: none travel time travel time 4

within 30 min. travel within 30 min. travel within 45 min. travel

time time time

Total points: 18

Point value: 0-3 4-6 7-10 11-14 15-18

(c) Carrying capacity Minimum facility Basic facilities to Adequate facilities to Optimum facilities to Ultimate facilities to 5

development for conduct activities conduct without conduct activity at achieve intent of

public health and deterioration of the site potential selected alternative

safety resource or activity

experience

Total points: 14

Point value: 0-2 3-5 6-8 9-11 12-14

(d) Accessibility Limited access by Fair access, poor Fair access, fair road Good access, good Good access, high

any means to site or quality roads to site: to site: fair access, roads to site: fair standard road to site:

within site limited access within good roads within site access, good roads good access within

site within site site

Total points: 18

Point value: 0-3 4-6 7-10 11-14 15-18

(e) Environmental Low esthetic factors Average esthetic Above average High esthetic quality: Outstanding esthetic

 quality exist that significantly quality: factors exist esthetic quality: any no factors exist that quality: no factors

6

lower quality that lower quality to limiting factors can be lower quality exist that lower quality 7

minor degree reasonably rectified

Total points: 20

Point value H 0-2 3-6 7-10 11-15 16-20

Value for water-oriented should be adjusted if significant seasonal water level changes occur 1 

General activities include those that are common to the region and that are usually of normal quality. This includes picnicking, 2

camping, hiking, riding, cycling, and fishing and hunting of normal quality.

High quality value activities include those that are not common to the region and/or Nation and that are usually of high quality. 3 

Likelihood of success at fishing and hunting. 4 

Value should be adjusted for overuse. 5 

Major esthetic qualities to be considered include geology and topography, water, and vegetation 6 

Factors to be considered to lowering quality include air and water pollution, pests, poor climate, and unsightly adjacent areas. 7 

Table VIII-3-3 Guidelines for Assigning Points for Special Recreation

Criteria Judgement factors

(a) Recreation Heavy use or Moderate use, other Moderate use, some Usually little evidence Very low evidence of

 experience frequent crowding or users evident and evidence of other of other users, rarely other users, never 1

other interfernce with likely to interfere with users and occasional if ever crowded crowded

use use interference with use

due to crowding

Total points: 30

Point value: 0-4 5-10 11-16 17-23 24-30

(b) Availability of Several within 1 hr. Several within 1 hr. One or two within 1 None within 1 hr. None within 2 hr.

 opportunity travel time: a few travel time: none hr. travel time: none travel time travel time 2

within 30 min. travel within 30 min. travel within 45 min. travel

time time time

Total points: 18
86

Table VIII-3-3 Guidelines for Assigning Points for Special Recreation -- Continued

Criteria Judgement factors

Point value: 0-3 4-6 7-10 11-14 15-18

(c) Carrying capacity Minimum facility Basic facilities to Adequate facilities to Optimum facilities to Ultimate facilities to 3

development for conduct activities conduct without conduct activity at achieve intent of

public health and deterioration of the site potential selected alternative

safety resource or activity

experience

Total points: 14

Point value: 0-2 3-5 6-8 9-11 12-14

(d) Accessibility Limited access by Fair access, poor Fair access, fair road Good access, good Good access, high

any means to site or quality roads to site: to site: fair access, roads to site: fair standard road to site:

within site limited access within good roads within site access, good roads good access within

site within site site

Total points: 18

Point value: 0-3 4-6 7-10 11-14 15-18

(e) Environmental Low esthetic factors Average esthetic Above average High esthetic quality: Outstanding esthetic

 quality

4

exist that significantly

lower quality 5

quality: factors exist esthetic quality: any no factors exist that quality: no factors

that lower quality to limiting factors can be lower quality exist that lower quality

minor degree reasonably rectified

Total points: 20

Point value H 0-2 3-6 7-10 11-15 15-20

Value for water-oriented should be adjusted if significant seasonal water level changes occur 1 

Likelihood of success at fishing and hunting. 2 

Value should be adjusted for overuse. 3 

Major esthetic qualities to be considered include geology and topography, water, and vegetation 4 

Factors to be considered to lowering quality include air and water pollution, pests, poor climate, and unsightly adjacent areas. 5 

(B) The unit day values to be used for both the (D) The degree to which alternative nonproject

general and specialized recreation categories opportunities are available to users is also

should be further adjusted to reflect additional considered in the assignment of values. Higher

quality considerations expected to prevail at values should be assigned if the population to be

various project sites at various regions of the served does not have existing water-oriented

Nation, and weighted to their importance to users. recreation opportunities. If water-oriented

For example, a reservoir that is expected to carry a recreation opportunities are relatively abundant,

relatively heavy load of suspended silt or is as compared to other outdoor recreation

expected to be used beyond optimum capacity opportunities, lower unit values should be

would be less desirable, and therefore of lower assigned, even if a large number of visitations are

unit value, than one that will have clear water and expected at the proposed development.

be less crowded.

(C) Hunting and fishing may be treated either as for transfers to availed double counting of benefits.

general recreation (Table V111-3-2) or specialized The net value of a transfer of use from one site to

recreation (Table V111-3-3) depending upon another is the difference in unit day values for recwhether it is associated with developed areas or reation at the two sites. If recreation activities at the

back country areas, respectively. In either case, two sites are comparable, travel cost savings are

the recreation experience (criterion “a” in the the only NED benefits associated with the transfer.

tables) will be given points according to the Use at the site must therefore be disaggregated

additional consideration of the chances of success: according to the proportion of total estimated use

the midpoint of the value range is associated with that would not have occurred without the project

the regions average catch or bag. Other criteria and the proportion of total use that represents

may be modified if appropriately based on transfers from existing sites. The respective types

available evidence about the preferences and of uses must then be assigned different daily

willingness to pay of hunters and fishermen for values as indicated.

different recreation quality factors.

(E) The choice of a unit day value must account

(iii) Establishing specific values within each range.

Unit values selected are to be considered net of all
87

associated costs of both the users and others in (c) Calculating values. The estimates of annual

using or providing these resources and related

services. Agencies will be encouraged, through

review procedures, demonstration projects, and

educational workshops, to adopt the TCM and

CVM techniques for project evaluations that would

otherwise have used UDVs. As agencies gradually

adopt CVM and TCM and develop a more

comprehensive set of regional models, reliance on

the UDV can be expected to diminish.

(b) Estimating use in the UDV method. (1) Using

the ranges of values requires the study of estimates of annual use foregone and expected at

recreation sites. Use can be estimated by a use

estimating equation or per capita use curve as discussed above, but when these means are available, the second step of the travel cost method

should generally be used instead of UDVs to

derive the benefit.

(2) The capacity method is an alternative

method of estimating use, but it has severe

limitations. The capacity procedure involves the

estimation of annual recreation use under

without-project and with-project conditions through

the determination of resource or facility capacities

(taking into consideration instantaneous rates of

use, turnover rates, and weekly and seasonal

patterns of use). Seasonal use patterns are

dependent on climate and culture and probably

account for the greatest variation in use estimates

derived through this method. In general, annual

use of outdoor recreation areas, particularly in

rural locations and in areas with pronounced

seasonal variation, is usually about 50 times the

design load, which is the number of visitors to a

recreation area or site on an average summer

Sunday. In very inaccessible areas and in those

known for more restricted seasonal use, the

multiplier would be less; in urban settings or in

areas with less pronounced seasonal use patterns,

the multiplier would be greater. In any case, the

actual estimation of use involves an analytical procedure using instantaneous capacities, daily turnover rates, and weekly and seasonal use patterns

as specific data inputs.

(3) Because the capacity method does not involve the estimation of site-specific demand, its

use is valid only when it has been otherwise

determined that sufficient demand exists in the

market area of project alternatives to

accommodate the calculated capacity. Its greatest

potential is therefore in urban settlings where

sufficient demand obviously exists. Additionally, its

use should be limited to small protects with (i) a

facility orientation (as opposed to a resource

attraction), and (ii) restricted market areas that

would tend to make the use of alternative use

estimating procedures less useful or efficient.

use are combined with the selected unit day values

to get an estimate of annual recreation benefits.

The value assigned to each activity or category of

activities is multiplied by the number of recreation

days estimated for that activity. The products are

then summed to obtain the estimate of the total

value of an alternative. Recreation days to be

gained and lost or foregone as a result of a

particular alternative are listed and valuated

separately, not merely shown as net recreation

days. Transfers of recreational users to or from

existing sites in the region must be calculated, and

the net regional gain or loss used in the final

benefit estimated. Adequate information must

appear in the discussion of the use estimation and

valuation procedure or elsewhere in the report

concerning the alternative being considered, so

that the reader can derive a similar value for each

activity.

Section IX— NED Benefit

Evaluation Procedure: Commercial

Fishing

2.9.1 Introduction.

This section provides procedural guidance for

the evaluation of the national economic

development (NED) benefits of water and related

land resources plans to commercial fishing. These

procedures apply to marine, estuarine, and fresh

water commercial fisheries for both fish and

shellfish.

2.9.2 Conceptual basis.

(a) The NED benefits are conceptually measured as the change in consumers' and producers'

surplus as a result of a plan. However, since

proper measurement of these quantities ordinarily

requires estimates of supply and demand

elasticities, reasonable approximations may be

obtained by the following methods:

(1) When no change in aggregate fish catch is

expected as a result of a plan (Perhaps because

of an effective quota system), NED benefits may

be measured as cost savings to existing fish

harvests.

(2) When the fish catch is projected to change

as a result of a plan, but the change is too small to

affect market prices, a seasonally-weighted average of recent prices may be used to value the

without- and with-plan harvests. In this case, it may

be convenient for computational purposes to break

the total change in income into two parts: (i) the

cost savings for the existing (without-plan) catch;

and (ii) the change in net income associated with

the incremental catch. This latter part may be
88

measured as the change in total revenue due to (1) Habitat condition. The biological resources

the increased catch minus the change in total cost

due to harvesting time increased catch.

(3) When the additional fish catch is expected to

affect market prices, the change in net income

may be estimated in two parts: (i) the cost savings

for the existing, or without-plan, catch; and (ii) the

change in net income associated with the incremental catch. The incremental gross revenue may

be estimated by multiplying the change in catch by

a price midway between expected without and

with-plan prices. The incremental cost of the

harvest is then subtracted from the estimated

incremental gross revenue.

(b) Harvest costs expected to vary between the

with- and without-plan conditions should be analyzed.

(1) These include the cost of development

ownership and operation; harvesting materials;

labor and management: maintenance operation,

and replacement. Examples of changed costs

include reduced travel time, reduced travel time to

safe moorage in storm conditions, reduced costs

associated with more efficient or larger boats,

reduced time awaiting favorable tides, damage

reduction to vessels or facilities, reduced fish

spoilage, and reduced maintenance expenditures.

If costs associated with plan measures (e.g., dock

costs, harbor facilities, etc.) are included in the

plan cost analysis, exclude them from harvest

costs.

(2) Value purchased a input at current market

prices. Value all labor, whether operator, hired or

family at prevailing labor rates. Value

management at 10 percent of variable harvest

costs and interest at plan discount rates.

(3) Project current production costs to the

selected time periods; any changes should reflect

only changes in catch or physical conditions.

2.9.3 Planning setting.

(a) Without-plan condition. The without-plan

condition is the most likely condition expected to

exist in the future in the absence of any of the

alternative plans being considered. Several

specific elements are included in the without-plan

condition:

consist of stocks of living resources subject to

commercial fishing, any living resources

ecologically related to the stocks, the migration

pattern and reproduction rate of the stocks and

any physical characteristic of the environment

essential to these living resources.

(2) The institutional setting. Existing and

expected local, State, regional, national, and

international policies and regulations governing the

harvest and sale of the affected species, including

the level of access to the fishery are included in

the without-plan condition. Other revisions of such

policies and rules of the alternative plans being

studied.

(3) Nonstructural measures. The effects of

implementing reasonably expected nonstructural

measures. Nonstructural measures include

prevention of pollution to the marine environment

or relocation of shore facilities.

(4) Market conditions. Information on the

without plan situation includes the projected

number of harvesters, the percentage of their time

and capacity utilized, harvest technology, the

markets in which they buy inputs, fishing efforts,

probable harvests, harbors and channels utilized,

ex-vessel price of harvests, and probable

processing and distribution facilities. See 2.9.2.

Project market conditions that are consistent with

the projected biological and institutional conditions.

(b) With-plan condition. The with-plan condition

is the most likely condition expected to exist in the

future with a given alternative. The elements and

assumptions included in the without-plan condition

are also included in the with-plan condition.

Special attention should be given to tracing

economic conditions related to positive or negative

biological impacts of the propose plan.

2.9.4 Evaluation procedure: General.

Follow the steps in 2.9.5 - 2.9.8 to estimate NED

benefits to commercial fishing from water or

related land resources plans. The level of effort

expended on each step depends on the nature of

the proposed project, the reliability of data, and the

degree of refinement needed for plan formulation

and evaluation. (See Figure 2.9.4.)
Identify biological 

study area

Describe biological 

conditions without the plan

Define process by which 

areas are linked

Identify economic 

study area

Describe institutional 

setting without plan

Describe economic 

setting without plan

Describe biological 

sphere with plan Describe economic 

setting with plan

Compute NED Benefits

89

Figure 2.9.4 -- Commercial Fishing Benefit Evaluation Procedure
90

2.9.5 Evaluation procedure: Identify the identified by each alternative plan and the without-plan.

affected areas.

(a) Identify the areas which the proposed

alternative plans will have biological impacts.

(b) Identify the areas in which the proposed alternative plans will have economic impacts.

(c) Describe the process by which the biological

and economic study areas are linked.

2.9.6 Evaluation procedure: Determine the

 without-project condition.

(a) Estimate the harvest of the relevant species

in physical terms if a plan is not undertaken. Include a detailed description of the stock, including

catch per unit of effort and whether the estimated

harvest is at, or near. the range of absolute

decreasing returns. (See 2.9.3(a)(1) and 2.9.9(a).)

(b) Describe the most likely set of institutional may appear to be a positive effect (something that

conditions that would exist without a project. (See encourages an increase in harvesting effort) may

2.9.3(a)(2).) ultimately result in negative benefits (decreased

(c) Estimate the total cost of harvesting the relevant species in each of the relevant years if a plan

is not undertaken. For each relevant species, (b) The fact that fish are common, as opposed to

determine the current weighted ex-vessel price private, property creates special problems in

corrected for seasonal fluctuations. (See measuring NED benefits. Unless entry is restricted,

2.9.3(a)(4).) excessive quantities of capital and labor may enter

2.9.7 Evaluation procedure: Determine excess entry will result in economic inefficiency in

conditions that would exist with an the utilization of fishery resources because the

alternative plan. value of the resulting extra output will be less than

(a) Estimate the harvest of the exploited stocks

in each of the relevant years if an alternative plan

is undertaken.

(b) Estimate the seasonally corrected current

price of the harvested species and the total cost of

harvesting in each of the relevant years if a plan is

undertaken. This will require an understanding of

the economics of entry and exit for the fish harvesting industry, as well as the effects of a change in

harvest rates on the catch per unit of effort.

2.9.8 Evaluation procedure: Estimate NED 

 benefits.

(a) Calculate the ex-vessel value of the harvest

(output) for each alternative plan and for the

without-plan condition.

b) Determine the harvesting costs, including

nonproject operation, maintenance, and

replacement, for the level of catch (output)

(c) Compute the NED benefit from an

alternative plan as the value of the change in

harvest less the change in harvesting cost from the

without-plan condition to the with-plan condition.

2.9.9 Problems in application.

(a) As the harvest rate of living stocks goes up,

it is possible to reach a range in which the

increases in annual harvesting efforts will actually

produce a long-run decrease in the quantities

harvested. In the absence of effective limits on

harvesting, it is possible that commercial fishing

will operate in this range of absolute decreasing

returns. This is possible because individual

operators will compare only their revenues and

costs; they will not be concerned with the absolute

productivity of the stock. This can be very

important in determining NED unfits because what

total harvest and increased total cost per unit of

harvest).

a fishery; that is, entry may continue until the ”economic rent” from the living stock is dissipated. This

the social opportunity cost of the entry. Some economic benefits may be realized but the total benefits will not be as large as they might be if entry

were restricted. Although evaluation of this potential has been limited by the specification of the

with- and without-plan condition in 2.9.3, three specific points are worthy of separate mention.

(1) Transitory benefits. Because the benefits from

harvesting open-access fisheries tend to be dissipated through entry of excess capital and labor,

some NED benefits from commercial fishing can

be transitory. It will therefore be necessary to

determine how many years these benefits will last

and in what amounts for each year.

(2) Industry capacity. The excess capacity that

will normally exist will make it difficult to obtain a

proper estimate of changes in cost associated with

changes in harvests. In some instances, idle boats

will be available and the only additional costs will

be operating costs, in other instances, vessels that

are already operating will be able to harvest the
91

extra catch without significant change in variable

costs.

(3) Regulation. Because of the tendency of open

access fisheries to attract excess capital and labor

which can deplete the stocks, most commercial

fishing operations are currently subject to government regulations which stipulate the manner, time,

place, etc., in which harvesting may take place.

These stipulations usually result in harvesting

activity that is not as economically efficient as it

might be. These stipulations will therefore affect

the size of NED benefits.

2.9.10 Data sources.

(a) Data for annual harvests, demand,

harvesting and processing costs, ex-vessel and

other prices, physical production, biological

modeling, models or information about

management policies and regulations, and survey

results are available from several Federal, State,

and local government agencies, universities

(especially those with sea grant programs), private

organizations (such as industry groups, fishermen

unions, or cooperatives), regional fisheries

management councils, and international commissions or organizations.

(b) Initial contacts should be made with the National Marine Fisheries Service Regional Office,

United States Coast Guard, State resource agencies having management or other responsibility for

the fishery or resource in question, and all local or

regional fishery councils, commissions, or

institutes that have responsibility or jurisdiction or

that are functioning within the area affected by the

project. Fisheries dynamics biologists at

universities or at National Marine Fisheries Service

regional laboratories will be the best source of

information on biological effects and their

repercussion in the market.

2.9.11 Report and display procedures.

(a) Clear presentation of study results, as well as

documentation of key input data assumptions and

steps in the analysis, will facilitate review of the

report. Table 2.9.11 is a suggested method of data

presentation. Its use will provide the reader with information on physical changes in output as well as

value.

(b) Because the benefits are broken down into

annual flows, it will be possible to determine if and

when the open access nature of commercial

fishing will lead to a dissipation of any NED

benefits provided by the project.

Table 2.9.11

Benefit

Years

1 2 n

(1) Change in output........................................ .......... .......... ..........

(2) Value of change in output (line1 times 

 expected price)......................................... .......... .......... ..........

(3) Change in costs ........................................ ......... ......... .........

(4) NED benefit (line 2 minus line 3) ................ ......... .......... .........

Section X—NED Benefit Evaluation

 Procedures: Other Direct Benefits

2.10.1 Introduction.

This section provides a definition of other direct

benefits and procedural guidelines for the

evaluation of other direct benefits attributable to

water resources plans and projects. Other direct

benefits are the incidental direct benefits of a

project. The other direct benefits to be included in

the NED benefit evaluation are the incidental

effects of a project that increase economic

efficiency by increasing the output of intermediate

final consumer goods over and above the direct

outputs for which the plan is being formulated.

2.10.2 Conceptual basis.

Other direct benefits are incidental to the primary

purposes of water resource projects. Primary purposes of projects are those purposes for which the

alternative plans are formulated. Other direct

benefits derive from incidental increases in outputs

of goods and services or incidental reductions in

production costs.

2.10.3 Planning setting.

Standard planning procedures involve comparison of the with-project condition to the without-project condition. In considering other direct benefits,

define the boundary of direct influence of the plan.

Economic efficiency gains to firms in production

and satisfaction gains to consumers other than

those identified as the direct beneficiaries of primary project purposes should be valued and

measured as other direct benefits.

(a) Without-project condition. Forecast future

conditions expected to exist without

implementation of the plan. The without-project

condition is the projection of output and production

levels and costs of production likely to be achieved

in the absence of a plan.
92

(b) With-project condition. Future conditions ex- emphasized that it is not practical or economic to

pected to exist when the plan is fully implemented.

The with-project condition is the projection of

output and production levels and the costs of production likely to be achieved with the plan.

2.10.4 Evaluation procedure: General.

(a) When applicable, compute other direct benefits according to the procedures for measuring

benefits in this chapter. Some benefits, such as reduced water supply treatment costs, can be computed on the basis of reduced costs to consumers.

(b) Improvement in production possibilities of the

private market sector as well as the nonmarket

sector recreation are other direct benefits. The

following are examples: a large water storage

project is to be located upstream on a main

tributary of a river system that enters the ocean by

a delta through an estuary. The direct output of the

project is flood control for communities residing on

floodplains along upper valleys of the tributary.

One effect of regulating flow— reducing winter

high and summer low flows—is to increase the

recreational potential of land and water in the

lower reaches of the river system. A cooling of

water temperatures and increased flow during

summer increases fish and wildlife productivity;

riparian habitats along lower water courses expand

and increase in density; salt water marshland

receives less saline water in summer. As a result,

there is an increase in dove and pheasant hunting

as these wildlife populations increase.

Opportunities for sport-angling also increase as

game fish productivity rises. Shrimp production

benefits from the change to less saline water in the

marshland,. and commercial shrimp harvest

increases, resulting in greater output at lower unit

total cost to shrimp fishermen. An incidental effect

is the improvement in water quality to downstream

users; turbidity is reduced in winter and water

hardness is reduced in summer. Treatment costs

are lower for firms and households. If the

impoundment causes the recharge of groundwater

basins in the vicinity of the dam site or along the

stream course, these incidental effects are other

direct benefits. Pumping costs could be reduced.

2.10.5 Evaluation procedure: Problems in

 application.

The major problems encountered in the

estimation of other direct NED benefits are the

identification of the firms, industries, and

consumers who will be subject to these incidental

effects caused by projects and plans. It must be

trace out all direct effects.

(a) Determining the “context" or system within

which the major incidental impacts might be

experienced is a useful first step in identifying likely

direct benefits worth measuring. The immediate

watershed or the subsystem of a river system

would constitute a relevant context. The

delineation of geographical and economic market

regularities in which impacts are likely to be felt

cannot usually encompass the whole regional

economy in a highly industrialized area.

Nevertheless, it is important to avoid delineating

too small an area in which to search for possible

effects.

(b) Another procedure for identifying likely impacts is tracing the hydrologic changes that will

occur as a result of the project. For example, flows

downstream and in other parts of a river system

can be changed in quantities and qualities; the

water’s chemical and physical

characteristics—oxygenation, turbidity,

temperature, etc.—can undergo change that may

impact on fish and wildlife resources and on the

production functions of firms and the satisfaction of

consumers.

2.10.6 Evaluation procedure: Data sources.

An assessment of the current situation and the

economic efficiency of potentially affected firms

and individuals usually entails the collection from

primary sources of data on cost, production function, and firm capacity. Studies of industrial structure and the interdependence of firms In the

supply of various inputs and the use of outputs can

provide valuable supplemental information.

2.10.7 Evaluation procedure: Risk and

uncertainty.

Other direct benefits are unique to each project

design and its location, so the historical record of

data is of limited usefulness. The risk and uncertainty attached to the hypothesized outcomes can

be reduced by clearly revealing areas of uncertainty. A physical description of other direct benefits,

together with assessment of their relative (major or

minor) significance, is an integral part of such a

procedure. Nevertheless, these estimates may involve high degrees of risk and relative uncertainty,

based as they are on the total mix of project outputs and the effect these mixes would have on

stimulating increased productivity.
93

2.10.8 Report and display procedures. (b) Conceptually, any employment, anywhere in

Other direct benefits should be identified by

component and added onto the benefits of the

benefit cost analysis. The method used to value

the benefits should be presented in the report.

Provide a tabular breakdown of all other direct

benefits claimed for the project.

Section XI—NED Benefit Evaluation

Procedures: Unemployed or

Underemployed Labor Resources

2.11.1 Introduction.

The economic effects of the direct use of otherwise unemployed or underemployed labor resources during project construction or installation

may, under certain conditions, be included as a

national economic development (NED) benefit.

Because of the dynamic nature of unemployment

situations, the appropriateness of these benefits

will be determined in consideration of economic

conditions existing at the time the project is

submitted for authorization and for appropriations

to begin construction. This section provides

procedural guidance in the evaluation of NED

benefits resulting from increased employment of

these labor resources. Use the procedures

described in 2. 11.4 to calculate these benefits for

all structural and nonstructural alternatives

considered during the planning process.

2.11.2 Conceptual basis.

(a) The social cost of a project is less than the

market contract cost in situations in which otherwise unemployed or underemployed labor resources are used in project construction. The opportunity cost of employing otherwise unemployed

workers in project construction or installation is

equal to the value of leisure time foregone by such

workers. Because society does not give up any alternative production of goods and services and because it would be difficult to measure the value of

leisure time foregone, a zero opportunity cost is

used in these procedures. The opportunity cost of

employing otherwise underemployed workers

equals their without-project earnings, which, by

virtue of their underemployment, are less than

their market cost. The most straightforward way to

reflect the effects of employing unemployed or

underemployed labor resources would be to

reduce by the appropriate amount the project

construction costs in the NED account, but this

method would cause accounting difficulties in

appropriations, cost allocation, and cost sharing.

Therefore, these effects are treated as a project

benefit in the NED account.

the Nation, of otherwise unemployed or underemployed resources that results from a project represents a valid NED benefit. However, primarily because of identification and measurement problems

and because unemployment is regarded as a temporary phenomenon, only those labor resources

employed onsite in the construction or installation

of a project or a nonstructural measure should be

counted. Benefits from use of otherwise unemployed or underemployed labor resources may be

recognized as a project benefit if the area has substantial and persistent unemployment at the time

the plan is submitted for authorization and for appropriations to begin construction. Substantial and

persistent unemployment exists in an area when:

(1) the current rate of unemployment, as determined by appropriate annual statistics for the most

recent 12 consecutive months, is 6 percent or

more and has averaged at least 6 percent for the

qualifying time periods specified in paragraph (2)

and

(2) the annual average rate of unemployment has

been at least: (i) 50 percent above the national

average for three of the preceding four calendar

years, or (ii) 75 percent above the national average

for two of the preceding three calendar years, or

(iii) 100 percent above the national average for

one of the preceding two calendar years.

(c) Only the portion of project construction activity

located in such an area is eligible for employment

benefits as calculated in accord with the procedures specified below. Any benefit claimed

should be clearly justifiable both in terms of availability of amounts of unemployed and/or underemployed labor and their skills and occupations.

2.11.3 Planning setting.

(a) Without-project condition. The without-project

condition is the most likely condition expected to

exist in the future in the absence of a project, including known changes in law or public policy. The

evaluation of NED benefits associated with the use

of otherwise unemployed and underemployed

labor resources is linked to the number by which

these resources would be reduced over time

without a project.

(b) With-project condition. The with-project

condition is the most likely condition expected to

exist in the future with a given project alternative.

There is a different with-project condition and thus

a different employment benefit for each alternative

plan. Currently, the employment benefit cannot be

estimated directly on the basis of a comparison of

the size of the pools of unemployed and

underemployed labor with and without a project.

Instead, the benefit procedure implicitly projects
94

the percentage of project labor hires estimated to taken directly from the PWIP report, as PWIP has

come from the unemployed labor pool. no local hire rule. Case 2 covers situations in

2.11.4 Evaluation procedure.

(a) Step 1. Calculation of employment benefits is

limited to onsite project construction or installation

activity in eligible regions as defined in 2.11.2(b).

The first step therefore is to determine whether a

project is wholly or partially located in an eligible

area.

(b) Step 2. Estimate the number of skilled and

unskilled unemployed construction workers in the

labor area. Construction labor pool data are

usually available from local offices of State

employment security agencies.

(c) Step 3. Determine the labor requirements for

plan implementation as follows:

(1) Labor cost. The manpower requirements of

water resource projects differ widely. Construction

cost estimate data will provide the percentage of

labor cost to total construction contract cost.

(2) Manpower requirements. Analyze the plan's

construction work force and schedule to determine nota requirement, support these percentages by

manpower requirements over the construction data that indicate the local hire goal is likely to be

period for skilled and unskilled categories of work- met. If this is unlikely, reduce Case 2 percentages

ers. Convert these data to total construction wages to numbers between the standard Case 1 and

in skilled and unskilled categories by year of con- Case 2 percentages.

struction. In addition, estimate the yearly wage bill

of other workers needed on the project. Use the

occupational tables in Appendix 1 of this section to

categorize different types of workers.

(d) Step 4. Compare the annual manpower requirements of the project to the size of the unemployed labor pool in eligible regions. If labor availability is significantly larger than labor

requirements, proceed to the next step. If not,

reduce the percentages in the next step based on

one or both of the following: expert interviews; or a

careful match up of requirements and availability

for specific types of jobs (e.g., carpenters).

(e) Step 5. Calculate NED employment

benefits— (1) Standard method. The following local State employment security agencies, local

percentages are derived from An Evaluation of the

Public Works Impact Program (PWIP). Although

2

the projects studied in the PWIP report are not fully

comparable to many typical water projects, the

report does provide an empirical basis for relating

public works expenditures to employment of

unemployed workers. Case 1, below, covers

situations in which there is no “local hire” rule; it is

which there is a local hire rule; the reference data

are modified to account for an 80-percent local

hire by scaling up the local hires (for skilled and

unskilled workers) to 80 percent, but retaining the

distribution of local hires previously employed to

local hires previously unemployed.

(i) Case 1, NED benefits. no local hire rule. Multiply the total wages determined by categories of

workers (skilled, unskilled, and other) by the

following percentages to obtain NED benefits by

year of construction:

Skilled — 30

Unskilled — 47 

Other — 35

(ii) Case 2. NED benefits, local hire rule. Apply

the following percentages in case 2 situations:

Skilled — 43

Unskilled — 58

Other — 35

Because the 80-percent local hire rule is a goal,

(iii) Annual NED benefits. Convert the NED benefits by year of construction to an annual equivalent

basis using the current discount rate.

(2) Alternative methods. The percentages of unemployment hires may be changed from those

used in the standard method if the change can be

supported by an empirical study that shows different percentages of unemployed and underemployed workers on a similar project, or on a segment of the same project, for labor market conditions similar to those of the proposed project. In

using this method, it may be necessary to vary the

categorization of construction workers used in the

standard method. The opinions of experts such as

construction firms, associations of contractors, and

labor unions may not be substituted for empirical

data. Studies used to document alternative

percentages for specific types or locations of

projects should be cited if not included in the

project report.

(3) The percentages are used in the standard

method to measure wages paid directly to

previously unemployed workers. Previously

employed workers may vacate jobs that then

become available to unemployed workers, but

there are no empirical data to support a

quantification of such indirect effects and no

 Economic Development Administration, U.S. 2

Department of Commerce. An evaluation of the Public Works

Impact Program (PWIP). Springfield, VA, National Technical

Information Service (PB-263 089), January 1975.
95

estimates of these effects should be included in

the NED account.

2.11.5 Report and display procedures.

Include the employment benefits of each

alternative plan as a line item in the display of NED

benefits in the system of accounts for any project

or portion of a project located in an area that

contains unemployed or underemployed

resources, as defined in 2.11.2(b).

Appendix 1 to Section XI—Occupational Tables

Blue Collar Unskilled Occupations

Bricklayer Apprentice

Carpenter Apprentice

Apprentice Carpenter

Carpenter Helper

Chainman

Deck Hand

Electrical Apprentice

Apprentice Electrician

Apprentice Wireman

Electrician Trainer 

Iron Worker Apprentice

Laborer

Asphalt Distributor

Assistant Carpenter

Bottom Laborer

Brick Tender

Carpenter Aid

Carpenter Helper

Chainsawman

Common Laborer

Concrete Braker

Concrete Laborer

Concrete Saw

Construction Laborer

Ditch Laborer

Drill Helper

Flag Person

Hod Carrier

Kettleman

Laborer

Laborer Apprentice 3rd

Laborer Group I

Laborer Group V

Labor Shop Man

Laborer Topman

Laborer Utilityman

Landscape Laborer

Mason Helper

Mason Laborer

Mason Tender

Mortarman

Mortarmler

Pipe Layer

Pipe Helper

Pipe Fitter

Plasterer Tender

Powderman

Pusher

Rakeman

Reboundman

Road Laborer

Roof Helper

Sand Blaster

Set-up-man

Sprinkler Apprentice

Stake Setter

Tender

Termite Operator

Tile Setter Operator

Vibrator Operator

Water Truckman

Lumberman and Nurseryman

Tree Thinner

Treeman

Treeplanter

Operating Engineer Apprentice

B. M. Apprentice

EO Group III

EO Group 222

Plumber Apprentice

Plumber Apprentice

Plumber Helper

Painter’s Helper

Sheet Metal Apprentice

Vibrator Operator

Watchman

Night Watchman

Blue Collar Skilled Occupations

Blaster 

Boilermaker 

Boilermaker Foreman 

Bricklayer 

Block Layer 

Truckpointer 

Brick mechanic 

Bricklayer Foreman 

Carpenter 

Form Setter 

Journeyman Carpenter 

Soft Floor Layer 

Carpenter Foreman 

Carpenter Superintendent 

Cement Mason 

Finisher 

Journeyman Finisher 

Cement Mason Foreman 

Diver 

Driller 

Drill Rig Operator 

Electrician 

Journeyman Electrician 

Mechanical Electrician 

Wireman 

Journeyman Wireman 

Electrical Foreman 

General Foreman 

General Labor Foreman 

Project Foreman 

Glazier 

Iron Worker 

Reinforcing Ironworker 

Structural Ironworker 

Steel Worker 

Steel Erector 

Steel Setter 
96

Reinforcing Steel Worker Plasterer foreman 

Iron Worker Foreman Plumber 

Labor Foreman Pipe Layer

Construction Foreman Plumber Foreman

Foreman Plumber General Foreman 

Job Foreman Plumber Superintendent 

Lead Foreman Rigger Foreman

Lather Roofer 

Lather Foreman Sheet Metal Worker 

Master Mechanic Journeyman Sheet Metal 

Mechanic Welder Sheet Metal Mechanic

Repairman Sheet Metal Operator 

Repairman Leadman Sheet Metal Foreman 

Oiler Steam Fitter 

Oiler Equipment Operator Tile Setter 

Oiler Operator Group II Truck Driver

Oiler Track Type Worker 

Operating Engineer Axle Truck Driver

Asphalt Distributor Operator 4 Axle Truck Driver 

Asphalt Heaterman Dump Truck Driver 

Backhoe Operator Road Truck Driver 

Blade Operator Tandem Truck Driver 

Bobcat Operator Truck Driver II 

Bulldozer Operator Truck Driver Highway

Case Operator Waterproof Foreman

Class A Operator 

Class C Operator 

Crane Operator 

Digger Operator 

Distributing Operator 

Dragline Operator

Equipment Operator 

Equipment Operator Group III

Front End Lift Fork Operator

Heavy Equipment Operator 

Hi-Lift Operator 

Lift Fork Operator 

Light Equipment Operator 

Loader Operator 

Maintenance Loadman 

Motor Grader Operator 

Operator Group III 

Pan Operator 

Park Equipment Operator 

Power Drive Moister Operator 

Power Equipment Operator 

Pneumatic Tire Roller Operator 

Pneumatic Tractor Operator 

Roller Operator 

Scraper Operator 

Shovel Operator 

Tractor Operator 

Traxeavator Operator 

Trenching Machine Operator

Truck Loader Operator 

Operating Engineer Foreman 

Leader Operator

Painter 

Brush Painter 

Roller Painter

Spray Painter

Painter Foreman 

Pile Drive

Pipe Fitter 

Sp. Box Man 

Pipe Fitter Foreman 

Sprinkler Foreman 

Plasterer 

Section XII—NED Cost Evaluation

Procedures

2.12.1 Introduction.

This section provides procedures for the evalua-

tion of NED costs of structural and nonstructural

elements of water resource plans and projects.

2.12.2 Conceptual basis.

(a) Project measures, whether structural or non-

structural, require the use of various resources.

NED costs are the opportunity costs of resource

use in evaluating NED costs, resource use must be

broadly defined so as to fully recognize scarcity as a component of value. This requires consideration

of the private and public uses that producers and

consumers are currently making of available

resources or are expected to make of them in the

future.

(b) The opportunity costs of resource use are

usually reflected in the marketplace. When market

prices adequately reflect total resource values, they

are used to determine NED costs. When market

prices do not reflect total resource values, surro-

gatevalues are used appropriately to adjust or re-

place market prices.

(c) Total NED cost is the market value of a re-

source plus other values not reflected in the market

price of the resource; it therefore accounts for all

private sector and public sector uses. Market price

is used to reflect the public sector use of resources
97

required for or displaced by a project, and costs incurred before the beginning of the period of

surrogate value is used to reflect the public sector analysis by adding compound interest at the

use. applicable project discount rate from the date the

(1) The market price approach relies on the

interaction of supply and demand. Price is

determined through transactions on the margin

between knowledgeable and willing buyers and (c) Project NED costs may be adjusted by an alsellers, neither of whom are able to influence price lowance for the salvage value of land, equipment,

by their individual decisions. Distortions in market and facilities that would have value for nonproject

price occur if one or more of the conditions of uses at the end of the period of analysis. Significant

perfect competition is violated. salvage values of replaceable items (e.g., gen-

(2) The surrogate value approach involves the

approximation of opportunity costs based on an

equivalent use or condition. Surrogate values are

frequently used in restricted markets and in nonmarket situations.

(d) Proper NED analysis requires that project

NED costs and benefits be compared at a

common point in time. Costs are calculated in

annualized terms (see 2.1.3).

2.12.3 Planning setting.

The basis for the evaluation rests in a thorough

analysis of expected conditions in the future with a

project and without a project. This requires identification of those resources that will be affected by a

project; the current value of such uses is

measured as the economic worth to the Nation of

the services associated with those uses.

2.12.4 Evaluation procedure: General

(a) Resources required or displaced to achieve

project purposes by project installation and/or operation, maintenance, and replacement activities

represent a NED cost and should be evaluated as

such. Resources required or displaced to minimize

adverse impacts and/or mitigate fish and wildlife

habitat losses are also NED costs. Costs for features not required for project purposes, avoiding

adverse effects, and/or mitigating fish and wildlife

habitat losses are not project-related NED costs

and should not be evaluated.

(b) Base all NED costs on current costs adjusted

by the project discount rate to the beginning of the

period of analysis as defined in Section 1, 2.1.2(c).

Compute all costs at a constant price level and at

the same price level as used for the computation

of benefits. Base current costs on the price level at

the time of the analysis. These costs will be updated in the year(s) the project is submitted for

authorization and/or appropriations. Discount

deferred costs to the end of the installation period,

using the applicable project discount rate. Increase

costs are incurred to the beginning of the period of

analysis. Convert all NED costs to an annual

equivalent value over the period of analysis.

erators) will normally become adjustments to

allowances for replacement costs.

2.12.5 Evaluation procedure: Implementation

 outlays.

The NED costs of implementation outlays include

the costs incurred by the responsible Federal entity

and, where appropriate, contributed by other Federal or non-Federal entities to construct, operate, and

maintain a project in accordance with sound engineering and environmental principles and place it in

operation. These costs are the remaining postauthorization planning and design costs; construction

costs; construction contingency costs; administrative services costs; fish and wildlife habitat mitigation

costs; relocation costs; historical and archaeological salvage costs: land, water, and mineral

rights costs; and operation, maintenance, and replacement costs.

(a) Postauthorization planning and design costs.

The costs are the direct cost for investigations, field

surveys, planning, design, and preparation of specifications and construction drawings for structural

and nonstructural project measures. In the evaluation procedure, base these costs on the actual current costs incurred by the responsible Federal entity

for carrying out these activities for similar projects

and project measures. They may be computed as a

percentage of construction costs when there is a

documented basis for the rate used. Make adjustments when appropriate to reflect circumstances special to the project under consideration.

(b) Construction costs. These costs are the direct

cost of installing project measures. They should be

based on the market value of goods and services

required to install project measures, including those

measures required for avoiding adverse environmental effects and public health and safety risks.

They include the cost of purchased materials (including associated transportation costs); equipment

rental or purchase; construction wages or salaries

(including social security and fringe benefit costs);

and contractors' management, supervision, overhead, and profit. Base such costs on current contract bid items in the project area or on the current
98

market value of purchased materials and services,

etc.

(c) Construction contingency costs. These are

project costs normally added to reflect the effects

of unforeseen conditions on estimates of construction costs. They are not an allowance for inflation

or for omissions of work items that are known to be

required. They are included to cover unforeseen (ii) the relocation of highways, railroads, and utility

construction problems. These costs will vary with lines.

the intensity of the surveys and investigations

performed. The variability of size conditions, and

the type of project measures being installed. They

may be computed as an appropriate percentage of

estimated construction costs.

(d) Administrative services costs. These are the replacement housing for a displaced person who

costs associated with the installation of project

measures, including the cost of contract

administration; permits needed to install the

project measures; relocation assistance advisory

services; administrative functions connected with

relocation payments; review of engineering plans

prepared by others; government representatives;

and necessary inspection service during

construction to ensure that project measures are

installed in accordance with the plans and

specifications. Base these costs on the actual

current costs incurred by the responsible Federal

entity for carrying out these activities for similar

projects and project measures. These costs may

be computed as a percentage of construction

costs if there is a documented basis for the rate

used. Make adjustments when appropriate to

reflect unusual circumstances special to the project under consideration.

(e) Fish and wildlife habitat mitigation costs.

These are the costs of mitigating losses of fish and

wildlife habitat caused by project construction, operation, maintenance, and replacement. The

mitigation measures to be included in the project

will be determined by the responsible Federal

entity in coordination with Federal and State Fish

and Wildlife Agencies as required by the fish and

Wildlife Coordination Act (Pub. L. 85-625).

Installation of these mitigation measures should be

concurrent with the installation of other project

measures, where practical. These costs include all

project outlays associated with the installation of

mitigation measures. Including postauthorization

planning and design costs; construction costs;

construction contingency costs; administrative

services costs; relocation costs; land, water, and

mineral rights costs; and operation, maintenance,

and replacement costs. Base the costs on current

market values and the actual current costs

incurred by the Federal entity for carrying out these

activities for similar mitigation measures.

(f) Relocation costs. (l) These are project costs

associated with—

(i) the requirements of the Uniform Relocation

Assistance and Real Property Acquisition Policies

Act of 1970 (Pub. L. 91-646); and

(2) Real property acquisition relocation payments

are applicable to a displaced person, business, or

farm operation. The costs include moving and

related expenses for a displaced person, business,

or farm operation; financial assistance for

qualifies and whose dwelling is acquired because of

the project; and termination payments for dislocated

businesses whose owners choose to close out.

Base the NED cost of replacement housing on

replacement in kind. (Costs over and above

replacement in kind are treated as financial costs

for nonproject purposes.) Base these costs on

current market values.

(3) Base the relocation cost of railroads and utility

lines on the costs of replacement in kind. In the

case of highways, base the relocation cost on replacement that reflects the current traffic count and

current standards of the owner, which may result in

a justified improvement over the configuration of the

existing roadway. The additional relocation cost of

highways that are upgraded to increase their carrying capacity for project purposes such as recreation is also a project cost. The relocation cost of

highways, railroads, and utility lines shall include all

project outlays associated with their relocation, including planning and design costs; construction

costs; construction contingency costs; administrative services costs; fish and wildlife habitat mitigation

costs; land, water, and mineral rights costs; and

historical and archaeological salvage costs. Base

these costs on current market values and the actual

current costs incurred by the Federal entity for

carrying out similar relocations.

(g) Historical and archaeological salvager operation costs. These are project costs associated with

salvaging artifacts that have historical or archaeological values as prescribed by the Preservation of Historic and Archaeological Data Act (Pub. L.

93-291). Base these costs on the current market

price of salvage operations carried on during construction.
99

(h) Land, water, and mineral rights costs. (1)

These costs include all costs of acquiring the land,

water, and mineral rights required for installing, operating, maintaining, and replacing project measures. They include all expenditures incurred in

acquiring land, water, and mineral rights,

easements, leases, and rights-of-way. Such costs

include the cost of the land, water, and mineral

rights minus salvage value; the cost of surveys

incident to a sale; legal fees and transfer costs;

foregone real estate taxes: and severance payments.

Base these costs on current market values and the

actual current costs incurred by the Federal entity for

carrying out similar land, water, and mineral rights

acquisitions. Base the market value of easements on

the difference in market value of land without the

easement and with the easement.

(2) Some land, water, and mineral rights are

owned by Federal, State, and local governments and

have been committed to specific uses. Base the

NED cost of using such resources for project

purposes consistent with their committed uses on the

surrogate value of the public services provided by the

resources. For example, if State-owned land

committed to recreation use is to be used for project

recreation development, its NED cost is not the

market value of the land, but the value of the recreation services that would be provided by the land

without the project. Public domain lands not

committed to specific uses should be valued at the

market value of comparable private land or a surrogate use value, or a combination if there are complementary uses.

(i) Operation, maintenance, and replacement

costs. These costs represent the current value of

materials, equipment, services, and facilities needed

to operate the project and make repairs and

replacements necessary to maintain project

measures in sound operating condition during the

period of analysis. They include salaries of operating

personnel; the cost of repairs, replacements, or

additions; and an appropriate charge for inspection,

engineering, supervision, custodial services, and

general overhead. When operation, maintenance, or

replacement will be performed by contract, the cost

should include an allowance for contingencies and

the costs of survey, planning design, and administrative services. Base these costs on actual

current costs incurred for carrying out these activities

for similar projects and project measures. When the

project is an addition to or extension of an existing

project for which the costs and benefits are not

included or otherwise involved in the project analysis,

include only the additional cost of operation,

maintenance, or replacement necessitated by the

addition or extension to the existing project. Adjustments can be made when appropriate to reflect

circumstances special to the project under consideration.

2.12.6 Evaluation procedure: Associated costs.

Associated costs are the costs of measures

needed over and above project measures to achieve

the benefits claimed during the period of analysis.

For example, associated costs include the cost of

irrigation water supply laterals, if they are not

accounted for in the benefit estimate. Base -

associated costs on the current market prices of

goods and services required for the installation of

measures needed over and above project measures.

2.12.7 Evaluation procedure: Other direct costs.

(a) These are the costs of resources directly required for a project or plan, but for which no implementation outlays are made. Consequently, they are

included in the economic costs of a plan but not in

the financial costs. These costs may be important for

both structural and nonstructural plans. For example,

a zoning plan to preserve floodplain values by

restricting development would have as a cost the

value of with-project development opportunities

foregone. A plan that responds to demand growth by

reallocating existing outputs from low value uses to

high value uses through pricing mechanisms (i.e.,

raising the price of existing outputs) would have as its

main cost the value of the outputs to the users who

forego its use as a result of its higher price. On the

other hand, a structural project may displace

recreation use at the project site. Whenever possible,

compute these costs using the procedure set forth in

this manual for computing benefits. If these costs are

not quantified, they should be otherwise identified.

(b) Other direct costs also include uncompensated

NED losses caused by the installation, operation,

maintenance, or replacement of project or plan

measures. All uncompensated net losses in

economic outputs (not transfers) that can be quantified shall be considered project NED costs. The

evaluation of such costs requires an analysis of

project effects both within and outside the project

area.

(c) Examples of other direct costs include increased downstream flood damages caused by

channel modifications, dikes, or the drainage of

wetlands; increased water supply treatment costs

caused by irrigation return flows; erosion of land

along stream banks caused by dams that prevent the

replenishment of bed load material; loss of land and

water recreation values through channel modifications, reduced instream flow due to consumptive

use of water by irrigated agriculture, or inundation by

reservoirs; increased transportation costs caused by

rerouting traffic around a reservoir; new or increased

vector control costs caused by the creation of

wetlands; and decreased output or increased cost

payoff unit of output of private firms caused by

project-induced decreases in raw materials. When

applicable, compute such costs using the

procedures for computing benefits contained in

this chapter. Some costs, such as increased water
100

supply treatment costs, may be computed on the recreation value, so the surrogate recreation value

basis of increased costs to resource users.

2.12.8 Evaluation procedure: Problems in

 application.

(a) Application of the procedures in this section

requires care to ensure that all costs are included.

The identification and determination of all associated costs and external diseconomies require full

perception of the measures required to achieve

the benefits being claimed and the impacts

produced by the actions taken. It must be

emphasized that it is not practical or economic to

trace out all other direct effects.

(b) Application of the procedures in this section

requires care to avoid double counting. A full

understanding of the values reflected by market

and surrogate values is necessary to prevent

double counting. For example, the market value of

land that includes a private recreation

development reflects the recreation value. In this

case, double counting would result if a surrogate

recreation value (loss) were added as a cost. On

the other hand, the market value of land that

provides free public recreation does not reflect the

(loss) must be added as a cost.

(c) Market prices are relatively easy to obtain.

However, some prices are subject to large fluctuations in short periods of time, so care must be

taken to determine reasonable current costs of

such items for project evaluation purposes.

2.12.9 Evaluation procedure: Data sources.

Market price information is available from data

on comparable sales, Government publications

(e.g., bulletins of the U.S. Departments of

Commerce, Agriculture, and Labor), and business

reports. Data sources for those NED benefit

evaluation procedures having application to cost

analysis are covered in their respective sections of

this chapter.

2.12.10 Report and display procedures.

Display NED costs identified through the procedures described above as line item entries in the

adverse effects section of the NED account. The

following display tables are suggested:

Table 2.12.9-1—Project Investment

Alternative—1 Alternative—2 Alternative—X

Unit Unit Unit

Amount Amount Amount

Quantity Price Quantity Price Quantity Price

1. Construction cost...................... ................ ............... ............... ................ ............... ............... ................ ............... ...............

2. Construction contingency 

costs............................................ ................ ............... ............... ................ ............... ............... ................ ............... ...............

3. Postauthorization planning and 

 design costs................................. ................ ............... ............... ................ ............... ............... ................ ............... ...............

4. Administrative services 

costs............................................. ................ ............... ............... ................ ............... ............... ................ ............... ...............

5. Fish and wildlife habitat mitigation 

costs............................................. ................ ............... ............... ................ ............... ............... ................ ............... ...............

6 Historical and archeological salvage 

 operation costs

7. Land, water, and mineral rights 

costs.............................................. ................ ............... ............... ................ ............... ............... ................ ............... ...............

8. Relocation costs....................... ................ ............... ............... ................ ............... ............... ................ ............... ...............

9. Interest during installation period at 

rate of ---%... ................ ............... ............... ................ ............... ............... ................ ............... ...............

 Total investment.... ................ ............... ............... ................ ............... ............... ................ ............... ...............

 Price level: —

 Installation period: —

 Period of analysis: —
101

Table 2.12.9—2 Annualized Adverse Effects

[Price level: period of analysis; discount rate]

Alternatives

1 2 X

Interest on

investment.................................................................................. ............................ ............................. .............................

Amortization of

investment.................................................................................. ............................. ............................. .............................

Average operation and

maintenance............................................................................... ............................. ............................. .............................

Major

replacement................................................................................ ............................. ............................. .............................

Associated costs ..................................................................... ............................. ............................. .............................

a

Other direct costs .................................................................... ............................. ............................. ............................

a

 Total annualized costs............................................. ............................. ............................. .............................

Other adverse effects not evaluated in monetary terms ......... ............................. ............................. .............................

a

Identified by type a
102

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103

Chapter III—Environmental Quality (EQ) Procedures

Section I—Introduction Section II—Definitions.

3.1.1 Purpose.

This chapter provides an alternative set of procedures that may be used for evaluating the effects of

alternative water resources plans on environmental

quality (EQ). The EQ procedures in this chapter are

for Federal administrative purposes and do not

create any substantive or procedural rights in private

parties. The purpose of these procedures is to:

(a) Establish a process for identification and description of beneficial and adverse effects of alternative plans on significant natural resources and

historic and cultural properties (referred to hereinafter as natural and cultural resources).

(b) Assist agencies in meeting the requirements of

the National Environmental Policy Act of 1969, as

amended (NEPA; Pub. L. 91-190; 42 U.S.C. 4321,

et. seq.), as specified in the CEQ NEPA regulations

(40 CFR Parts 1500-1508). Relationships between

the CEQ NEPA regulations and these procedures

are noted in the text. Appendix B lists relationships

that may aid in the preparation of an environmental

impact statement (EIS).

(c) Provide a basic analytical framework for focusing the concurrent integration of other related

review, coordination, and consultation requirements

into the planning process. These other related requirements include those mandated by the Fish and

Wildlife Coordination Act of 1958, as amended (Pub.

L. 85-624; 16 U.S.C. 661, et seq.); the National

Historic Preservation Act of 1966, as amended (Pub.

L. 89-655, 16 U.S.C. 470, et seq.); the Endangered

Species Act of 1973, as amended (Pub. L. 93-205;

16 U.S.C. 1531, et seq.); and the Coastal Zone

Management Act of 1972, as amended (Pub. L.

92-583, 16 U.S.C. 1451, et seq.). These procedures

for EQ evaluation are intended to rely on and make

use of, rather than duplicate, analyses and

documentation already used by agencies for

compliance with such requirements.

3.1.2 Limitations.

(a) These procedures are limited to evaluation of

effects on the ecological, cultural, and aesthetic attributes of Significant natural and cultural resources.

(b) During the course of the EQ evaluation, the

planner should be aware that contributions or effects

that can be measured in monetary terms are to be

monetized and included in the NED account.

3.2.1 Definitions.

EQ account

The EQ account may be used to describe that part

of the NEPA human environment that identifies

beneficial and adverse effects on significant EQ resources and attributes.

EQ attributes

EQ attributes are the ecological, cultural, and

aesthetic properties of natural and cultural resources

that sustain and enrich human life.

(1)Ecological attributes are components of the

environment and the interactions among all its living

(including people) and nonliving components that

directly or indirectly sustain dynamic, diverse, viable

ecosystems. In this category are functional and

structural aspects of the environment, including

aspects that require special consideration because

of their unusual characteristics.

(i) Functional aspects of the environment include

production, nutrient cycling, succession, assimilative

capacity, erosion, and other dynamic, interactive

processes and systems. Examples are the role of

wetlands as a potential sink for nutrients and pollutants; the high productivity of marshes that is often

exported to other systems; and prime and unique

farmlands.

(ii) Structural aspects of the environment include

plant and animal species, populations and communities; habitats; and the chemical and physical properties of air, water (surface and ground), and soil and

other geophysical resources. Examples are water

quality factors that support or are indicative of trout

fisheries; the substrate characteristics and the

aggregations of plants and animals that support a

rookery; the pH of the rainfall; pristine wilderness

areas; endangered, threatened, and other unique or

scarce plant and animal species; and rock strata with

scientific or educational uses.

(2) Cultural attributes are evidence of past and

present habitation that can be used to reconstruct or

preserve human lifeways. Included in this category

are structures, sites, artifacts, environments, and

other relevant information, and the contexts in which

these occur. Cultural attributes are found in

archaeological remains of prehistoric and historic

aboriginal occupations; historic European and

American areas of occupation and activities; and

objects and places related to the beliefs, practices,

and products of existing folk or traditional

communities and native American groups. Examples
104

are campsites of prehistoric mammoth hunters, a "desirability of scent" described on a scale of

19th century farm stead, and a stream crossing in "offensive/neutral/pleasant").

longstanding use by an Appalachian community for

baptizing church members.

(3) Aesthetic attributes are perceptual stimuli that

provide diverse and pleasant surroundings for

human annulment and appreciation. Included in this

category are sights, sounds, scents, tastes, and

tactile impressions, and the interactions of these

sensations, of natural and cultural resources. Examples are the sight of a pristine landscape, the view of

a historic fortress, the sound of a waterfall or brook,

the scent of a hedgerow of honeysuckle or a pine

forest, and the taste of mineral water.

EQ resource indicator's specified unit.

An EQ resource is a natural or cultural form,

process, system, or other phenomenon that—

(1) Is related to land, water, atmosphere, plants,

animals, or historic or cultural objects, sites, buildings, structures, or districts; and

(2) Has one or more EQ attributes (ecological,

cultural, aesthetic).

Guidelines a result of implementation of a specific alternative

A guideline is a standard, criterion, threshold, optimum, or other desirable level for an indicator that

provides a basis for judging whether an effect is

beneficial or adverse. Guidelines are to be based on

institutional, public, or technical recognition.

Indicator

An indicator is a characteristic of a EQ resource

that serves as a direct or indirect means of measuring or otherwise describing changes in the quantity

and/or quality of an EQ attribute.

(1) Quantity indicators describe how much of a

resource attribute is present in terms of physical size,

magnitude, or dimension. They are usually

measurable in numeric units (example: The indicator

"depth" is measurable in meters, feet, etc.); but they

may be described in non-numeric terms (example:

The indicator "amount" could be described on a

scale of "abundant/adequate/scarce/ unique"). The

diversity or stability of an ecosystem or natural

community may be a numeric or non-numeric

indicator.

(2) Quality indicators are characteristics that describe the degree or grade of an attribute's desirability (how good or how bad). Some quality

indicators are measurable in numeric units (example:

The indicator “landscape beauty" measured by an

ordinal ranking of landscapes); some represent

composites of numeric measurements (example:

The indicator “class 'A' water quality" is a composite

of measurements of concentrations of dissolved

oxygen, suspended solids, etc.); some are described

in non-numeric units (example: The indicator

Significant

Significant means likely to have a material bearing

on the decisionmaking process. In EQ evaluation,

significant EQ resources and attributes (see 3.4.3)

and significant effects (see 3.4.12) are identified

based on institutional, public, and technical recognition.

Technique

A technique is a systematic procedure for measuring or otherwise describing current and future

conditions of a specified indicator in terms of the

Unit

A unit is a numeric or non-numeric term in which

change in an indicator is measured or otherwise

described.

With-plan condition

The with-plan condition is an estimation of the

most probable future condition expected to occur as

plan formulated during a study. The with-plan

condition includes changes likely to directly, indirectly, or cumulatively result both from the alternative

plan and from all reasonably foreseeable actions

that are not part of the plan.

Without-plans condition

The without-plans condition is an estimation of the

most probable future condition expected to occur in

the absence of any of the study's alternative plans.

The without-plans condition includes any changes

expected to directly, indirectly, or cumulatively result

from all reasonably foreseeable actions without any

of the study’s alternative plans. For example, if it is

most probable that within the next 20 years 60

percent of a woodland will be cleared for agricultural

purposes without any of the plans being considered

by the agency, the effects of such clearing would be

included in the without-plans conditions. Similarly, if

existing legislation, such as the Clean Water Act, is

expected to improve water quality in a river, such

improvement would be included in the without-plans

conditions. The without plans condition is

synonymous with "No Action' as used in NEPA and

the CEQ NEPA regulations (40 CFR 1502.14(d)).
105

3.2.2 References for terms.

Table 3.2.2 lists key terms and indicates where

their definitions or explanations are located in these

procedures or in the CEQ NEPA regulations.

Table 3.2.2—References for Terms

Term Reference

Activity ...................... 3.4.1(b)

Aesthetic attribute .............. 3.2.1—EQ attribute

Affected area ................. 3.2.1—Planning area

Cooperating agency ............ 40 CFR 1501.6

Cultural attribute ............... 3.2.1—EQ attribute

Cumulative effect .............. 40 CFR 1508.7

Direct effect .................. 40 CFR 1508.8(a)

Ecological attribute ............. 3.2.1—EQ attribute

Effect ....................... 40 CFR 1508.8 and

714.431(a)

Environmental impact statement ... 40 CFR 1508.11

EQ account ................... 3.2.1

EQ attribute .................. 3.2.1

Existing condition .............. 3.4.6(a)

Forecast dates ................ 3.4.7(g)

Guideline ..................... 3.2.1

Human environment ............ 40 CFR 1508.14

Indicator ..................... 3.2.1

Indirect effect ................. 40 CFR 1508.8(b)

Institutional recognition .......... 3.4.3(c)(1) and 3.4.12(b)

Natural and cultural resources .... 3.1.1(a)

Phase ....................... 3.4.1(b)(1)

Planners ..................... 3.3.1(c)

Public recognition .............. 3.4.3(c)(2) and 3.4.12(c)

Scoping ...................... 40 CFR 1501.7

Significant .................... 3.2.1

Stage ....................... 3.4.1(c)(1)

Technical recognition ........... 3.4.3(c)(3) and 3.4.12(d)

Technique .................... 3.2.1

Trend condition ................ 3.4.6(a)

Unit ......................... 3.2.1

With-plan condition ............. 3.2.1

Without-plan condition .......... 3.2.1

3.2.3 Abbreviations and acronyms.

 Table 3.2.3 lists commonly used abbreviations

and acronyms that appear in these procedures.

Table 3.2.3—Abbreviations and Acronyms

 Abbreviations and Phrase

 acronyms

CEQ ............. Council on Environmental Quality.

EIS .............. Environmental impact statement.

EQ .............. Environmental quality.

et seq ............ et sequens (and the following).

FR ............... Federal Register.

HEP ............. Habitat Evaluation Procedures.

NED ............. National economic development.

NEPA ............ National Environmental Policy Act.

OSE ............. Other social effects.

Table 3.2.3—Abbreviations and Acronyms—

Continued

Abbreviations and Phrase

 acronyms

P&G ............. Principles and Guidelines.

Pub. L ............ Public law.

RED ............. Regional economic development.

U.S.C. ............ United States Code.

Section III—General Evaluation 

Requirements

3.3.1 Interdisciplinary planning.

(a) An interdisciplinary approach is required by

NEPA and the CEQ NEPA regulations (40 CFR

1501.2(a) and 1507.2(a)).

(b) The wide range of resources that should be

viewed from the perspective of the EQ evaluation

is beyond the scope of any single scientific

discipline. Therefore, the use of many scientific

disciplines in an ongoing, interactive approach is

necessary to deal effectively with the range of EQ

resources to be considered in decisionmaking.

(c) The types of generalists and specialists from

various disciplines, referred to hereinafter as "planners," needed for an interdisciplinary approach will

vary from study to study. An interdisciplinary approach is not limited to the expertise immediately

available in the planning agency. As necessary for

a particular study, agency expertise may be

supplemented by knowledge and skills from

cooperating agencies, universities, consultants,

and other sources. Regardless of the source of

expertise, the types of expertise brought to bear on

a given EQ analysis, judgment, or other decision

requiring professional judgment should be relevant

to the decision.

3.3.2 Public involvement.

(a) Agencies should invite the early and continuing involvement of government entities at the Federal, regional, State, and local levels; national, regional, and local, public and private organizations

and groups, including Indian tribes; and individuals.

Public involvement is required by the CEQ NEPA

regulations (40 CFR 1506.6).

(b) Public involvement in EQ evaluation is appropriate for the following reasons:

(1) First, the public is the basic source, and in

many cases the only source, of knowledge and

opinions that are needed to make the process

work. Such knowledge and opinions are
106

especially critical in determining public recognition the National Historic Preservation Act of 1966, as

and concerns. amended (Pub. L. 89-655; 16 U.S.C. 470, et seq.);

(2) Second, as a reviewer of the results of EQ

evaluation, the public will have opportunities to

ensure that their views have been properly incorporated; understand the implications of their views on

plan formulation; and react to evaluation results in a

way that will facilitate modification of alternative

plans.

(c) The means to achieve public involvement in

EQ evaluation are left to the discretion of agencies.

The P&G and the CEQ and NEPA regulations (40

CFR 1506.6) suggest several means of public involvement. In some cases, means of public involvement are specifically established in law and should

be relied upon to provide input to EQ evaluation.

Examples of specifically established means are:

(1) The NEPA scoping process (see the CEQ

NEPA regulations, 40 CFR 1501.7).

(2) The participation of cooperating agencies with

jurisdiction by law or special expertise (see the CEQ

NEPA regulations, 40 CFR 1501.6, 1501.7, 1508.5,

1508.15, and 1508.26).

(3) Procedures, developed pursuant to Federal

laws other than NEPA, that require a specific type of

review, coordination, or consultation between

planning agencies and agencies with custodial responsibilities for certain EQ-related factors. Such

procedures include, but are not limited to, the "Section 7 Consultation Process" pursuant to the Endangered Species Act of 1973, as amended (Pub.

L 93-205; 16 U.S.C. 1531, et seq.); the "Section

106 Procedure" pursuant to the National Historic

Preservation Act of 1966, as amended (Pub. L. 89--

655; 16 U.S.C. 470, et seq.); the "Coordination Act

Report" pursuant to the Fish and Wildlife Coordination Act of 1958, as amended (Pub. L. 85-624 16

U.S.C. 661, et seq.); and the "Consistency Determination" pursuant to the Coastal Zone Management

Act of 1972, as amended (Pub. L. 92-583; 16

U.S.C. 1451, et seq.).

3.3.3 Integration of other review, coordination,

and consultation requirements.

(a) To the fullest extent possible, EQ evaluation

and its documentation should be conducted and

prepared concurrently and integrated with the analyses and documentation required by other review; (5) Information collected; and

coordination, and consultation requirements related

to EQ evaluation, as required by the CEQ NEPA

regulations (40 CFR 1500.2(c), 1501.7(a)(6), (c) Information collected prior to initiation of an

1502.2(d), 1502.25, and 1506.2). Such require- EQ evaluation and referenced or incorporated in

ments include, but are not limited so, those related the EQ evaluation should be documented as deto NEPA; the Endangered Species Act of 1973, as scribed in paragraph (b) of this section, to the

amended (Pub. L 93205; 16 U.S.C. 1531, et seq.); extent practical.

the Fish and Wildlife Coordination Act of 1958, as

amended (Pub. L 85-624; 16 U.S.C. 661, et seq.);

and the Coastal Zone Management Act of 1972,

as amended (Pub. L. 92-583; 16 U.S.C. 1451, et

seq.).

(b) These procedures for EQ evaluation are not

intended to duplicate or in any way modify such

other requirements. Rather, the EQ evaluation

process described in these procedures may be

used as the basic analytical framework for

concurrently integrating into water resources

planning the information developed in response to

other requirements. The relationship between the

requirements of NEPA for contents of

environmental impact statements and these

procedures is given in further detail in Appendix B.

3.3.4 Documentation.

(a) EQ evaluation should be documented in

such a way that an independent reviewer can fully

and clearly understand the decisions that were

made and the reasons for making them.

Documentation in water resources project reports,

however, should be limited to that required for the

agency decision making process. Other

documentation should be retained on file and its

availability referenced in the project report.

Documentation should be clear and concise, as

required by the CEQ NEPA regulations (40 CFR

1502.2(a) and (c) and 1502.8).

(b) Information collected by field sampling,

laboratory experiments, interviews, literature

searches, and other means should be

documented to include:

(1) Date and place of information collection;

(2) Name of person(s) who collected the

information;

(3) Techniques and methods used; including assumptions and rationale for selecting techniques

and methods used;

(4) Known or suspected factors that could affect

the accuracy of information collection techniques

and methods, including gaps in relevant

information and scientific uncertainty;

(6) Interpretations of the information.
107

(d) The reasons and bases for actions, decisions, alternative plans is available when needed for

and results required in the EQ evaluation activities decisionmaking, in accordance with 40 CFR

should be documented in an appropriate form. Nar- 1502.22.

rative statements, ranging from short notes to extensive descriptions, are appropriate for most documentation needs. Other formats that may be used

are: maps, including composites and overlays; graduated scales, including time lines; graphs; lists;

tables; scale models; sound recordings; photographs; films; conceptual drawings; and other formats that accurately record information. Appendix A

presents examples of documentation formats that

may be used.

3.3.5 Performance objectives.

Performance objectives are statements of intent

that serve as guides to planners in making decisions

on how to carry out and document EQ evaluation. In

accordance with the intent of the CEQ NEPA

regulations, EQ evaluation and its documentation

should be:

(a) Generally understandable to members of the

public interested in the evaluation (see 40 CFR

1502.8).

(b) Accessible in a form readily available to members of the public interested in the evaluation (see 40

CFR 1506.6(f)).

(c) Traceable so that members of the public interested in knowing the bases and events that led to

decisions can follow these factors through the

process (see 40 CFR 1500.2(b), 1502.18, and

1502.24).

(d) Focused on analysis of significant issues (see

40 CFR 1500.1 (b), 1501.7(a) (2) and (3), and

150,2.2(b)).

(e) Analytic rather than encyclopedic, with information that will be useful to making decisions in advancing the planning process (see 40 CFR 1500.1

(b) and (c), 1500.2 (a) and (b), and 1500.4(f)).

(f) At a level of detail comparable to economic and

technical analyses (see 40 CFR 1501.2(b)) and

necessary for reasonable accuracy of measurements, estimates, and other descriptions needed

in understanding and making decisions about alternative plans (see 40 CFR 1502.15).

(g) Based on scientifically valid and, to the extent

practical, acceptable precepts (see 40 CFR

1502.24).

(h) The means to identity and describe the effects

of alternative plans, rather than to justify decisions

already made (see 40 CFR 1502.2(9)).

(i) Complete and timely, so that information about

effects that is essential to a reasoned choice among

Section IV—EQ Evaluation Process

3.4.1 Orientation.

(a) EQ evaluation in the planning process. (1) This

section describes the EQ evaluation phases and

activities that should be used to identify the significant

beneficial and adverse effects of alternative plans on

significant EQ resources.

 (b) EQ evaluation phases and activities. (1) Evaluation in the planning process (Step 4) consists of

the assessment and appraisal of effects. As described in these procedures, it also includes the

necessary definition and inventorying that are preparatory to assessment and appraisal. These four

general actions—define, inventory, assess,

appraise—are called phases in these procedures.

Each phase is divided into specific actions defined in

terms of operational instructions. These specific

actions are called activities in these procedures. The

phases and their activities that make up the EQ

evaluation process described in these procedures

are graphically illustrated in Figure 3.4.1-1.

Figure 3.4.1-1—EQ Evaluation Process: Phases 

 and Activities

Phases Activities

Define resources

Identify resources

Develop evaluation

Inventory resources

Survey existing conditions

Forecast without-plans

condition

Forecast with-plan condition

Assess effects

Identify effects

Describe effects

Determine significant effects

Appraise effects Appraise significant effects

Judge net EQ effects

(2) Although these phases are presented in a

linear sequence, many interrelationships exist among

the phases and their activities. Planners may have to

repeat phases and activities in stages to complete a

given EQ evaluation.

(c) EQ evaluation stages. (1) The

interrelationships among EQ evaluation phases and

activities, as well as the interrelationships between
108

EQ evaluation and the planning process, usually and detail is a study-specific adaptation of the tiering

necessitate performing and repeating phases and concept described in the CEQ NEPA regulations (40

activities in increasing levels of detail, each level CFR 1502.20 and 1508.28). The level of detail and

commensurate with the evaluation needs of the number of stages will vary with each planning study,

overall planning effort. Such repetitions are called but the following stages, shown graphically in Figure

stages in these procedures. Conducting EQ 3.4.1-2, should be considered for every study.

evaluation in stages of increasing levels of specificity
Inventory

Assess

Appraise

Define

Identify

Develop

Survey

Forecast without

Forecast with

Identify

Describe

Determine

Appraise

Judge

Phase Activity

Inventory

Assess

Appraise

Define

Identify

Develop

Survey

Forecast without

Forecast with

Identify

Describe

Determine

Appraise

Judge

Phase Activity

Inventory

Assess

Appraise

Define

Identify

Develop

Survey

Forecast without

Forecast with

Identify

Describe

Determine

Appraise

Judge

Phase Activity

Inventory

Assess

Appraise

Define

Identify

Develop

Survey

Forecast without

Forecast with

Identify

Describe

Determine

Appraise

Judge

Phase Activity

1. Specify Problems and Opportunities

2. Inventory and Forecast

3. Formulate Alternative Plans

4. Evaluate Alternative Plans

5. Compare Alternative Plans

6. Select Plan

PRELIMINARY IDENTIFY/INVENTORY

STAGE

PRELIMINARY ASSESS/APPRAISE

STAGE

DETAILED IDENTIFY/INVENTORY

STAGE

DETAILED ASSESS/APPRAISE

STAGE

EQ EVALUATION PROCESS PLANNING PROCESS

STEPS

Relationship between Planning Process 

and EQ Evaluation Phases and Stages

Identify EQ resources

Collect available

Identify information needs

Identify EQ resources that are 

likely to be significantly affected 

Develop adequate 

information base 

Asses and appraise 

significant affects 

Judge net EQ effects

109

Figure 3.4.1-2
110

(I) Preliminary definition-and-inventory stage. In assessment-and-appraisal stage should be underaccordance with the requirements of the CEQ

NEPA regulations (40 CFR 1501.2, 1501.7, and 1

507.2(e)), a preliminary definition-and-inventory

stage should be undertaken in easy planning. The

objective of this stage is to identify EQ resources,

develop an evaluation framework, and collect

readily available information. This stage

emphasizes the activities of the Define Resources

Phase to provide an early focus for evaluation and

to reveal information needs. Where information

gaps are found, allocation and initiation of data

collection and forecasting programs should be

undertaken in accordance with the CEQ NEPA

regulations (40 CFR 1501.6 and 1501.7(a) (4)-

(6)).

(ii) Preliminary assessment-and-appraisal stage.

A preliminary assessment-and-appraisal stage

should be undertaken following the preliminary

formulation of alternative plans. The objective of

this stage is to identify resources likely to be

directly, indirectly, or cumulatively affected by one

or more plans. This stage emphasizes the

activities of the Assess Effects Phase, further

focusing information needs on those resources

that would be affected by alternative plans. The

assessment and appraisal of effects at this stage

will help planners understand the enhancement

and degradation potentials of alternative plans,

thereby providing bases for further reformulations

in Steps 3 through 5 of the planning process.

Since a substantial amount of time in most

planning studies is spent in exploring a wide range

of alternative plans, this EQ evaluation stage will

probably be repeated several times in a given

study. While a complete, detailed inventory is

usually not essential at this stage, effects should

be identified in adequate detail so they can be

compared with economic and technical analyses

as required by the CEQ NEPA regulations (40

CFR 1501.2(b)).

(iii) Detailed definition-and-inventory stage. In

accordance with the requirements of the CEQ

NEPA regulations (40 CFR 1502.14(b) and

1507.2(e)), a detailed definition-and-inventory

stage should be undertaken during the formulation

of specific alternative plans. The objective of this

stage is to develop an adequate information base

for a detailed assessment and appraisal of effects.

This stage emphasizes the activities of the

Inventory Resources Phase, including completion

of information collection and forecasting programs.

This stage may often be conducted concurrently

with, or during later repetitions of, the preliminary

assessment-and-appraisal stage.

(iv) Detailed assessment-and-appraisal stage. In

accordance with the requirements of the CEQ

NEPA regulations (40 CFR 1502.14(b)), a detailed

taken following final formulation of specific alternative

plans. The objective of this stage is to identify,

describe, and appraise individual effects, and appraise the net EQ effect of each alternative plan. This

stage emphasizes the activities of the Assess Effects

and Appraise Effects Phases to provide the agency

decisionmaker with reasonable bases for judging net

EQ effects. The results of this appraisal will form the

EQ basis for plan selection in planning process Step

6 (selection).

(2) Repeating phases and activities in stages of

increasing levels of detail will aid in focusing on resources and effects that will play a role in

decisionmaking, rather than on resources unrelated to

or not affected by alternative plans.

(d) Managing evaluation demands. During the

course of EQ evaluation, the number of variables

(such as the number of resources, indicators, forecast

dates, etc.) identified at a given point in the process

will vary. Most activities in these procedures are

designed to limit the number of variables being

considered. It is important that the number of

variables be adequate to fully account for all significant effects. However, increases in the number of

variables will increase demands on study time, funds,

and expertise. Therefore, a proper balance between

adequate analysis and study resources should be

achieved.

3.4.2 Define resources phase.

This phase is performed to identify the EQ resources and attributes that will be evaluated, and to

specify how they will be measured or otherwise described in EQ evaluation. In the first activity, EQ resources and attributes to be evaluated are identified

on the basis of their significance and their likelihood of

being affected by an alternative plan. In the second

activity, an evaluation framework is developed for

measuring or otherwise describing the conditions of

identified EQ resources and attributes in terms of

indicators, units, guidelines, and techniques.

3.4.3 Identify resources activity.

(a) This activity is performed to identify EQ resources and attributes that will be analyzed in later

EQ evaluation activities. This is accomplished by

reviewing the planning process Step 2 information

base to identify EQ resources and attributes that

are—

(1) Significant, based on institutional, public, or

technical recognition; and

(2) Likely to be affected by one or more of the

alternative plans.
111

(b) Many EQ resources will have more than one Table 3.4.3—Sources of institutional recognition:

EQ attribute; these attributes may be interrelated.

For example, a wetland may have both ecological

and aesthetic attributes, and the ecological

attribute may complement the aesthetic attribute.

Only when the full range of a given resource's

significant attributes is identified and evaluated can

the requirements of the NEPA human environment

and planning process Step 4 (evaluation) be met.

(c) Significant EQ resources and attributes that

are institutionally, publicly, or technically

recognized as important to people should be taken

into account in decisionmaking. Focusing on

significant issues is required by the CEQ NEPA

regulations (40 CFR 1500.1(b), 1501.7(a) (2) and

(3), and 1502.2(b)).

(1) Significance based on institutional recognition

means that the importance of an EQ resource or

attribute is acknowledged in the laws, adopted

plans, and other policy statements of public agencies or private groups. Sources of institutional recognition include:

(i) Public laws, executive orders, rules and

regulations, treaties, and other policy statements

of the Federal government. Table 3.4.3 lists the

Federal policies that should be considered in all

studies as basis for identifying institutionally

recognized resources or attributes. Other Federal

policies are to be considered as applicable.

(ii) Plans and constitutions, laws, directives, resolutions, gubernatorial directives, and other policy

statements of States with jurisdiction in the planning area. Examples are State water and air

quality regulations; State historic preservation

plans; State lists of rare, threatened, or

endangered species; and State comprehensive

fish and wildlife management plans.

(iii) Laws, plans, codes, ordinances, and other

policy statements of regional and local public entities with jurisdiction in the planning area. Regional

entities include river basin commissions, councils

of government, and regional planning boards.

Local entities include counties, districts, parishes,

cities, towns, and villages. Examples of these

entities' sources of institutional recognition are

regional open space plans, county lists of historic

sites, and town zoning ordinances.

(iv) Charters, bylaws, and formal policy statements of private groups. Examples are the

National Audubon Society Blue List of Species,

properties of the National Trust for Historic

Preservation, and properties of the Nature

Conservancy.

Federal policies.

(a) Public laws.

(1) American Folklife Preservation Act. Pub. L 94-201; 20 U.S.C.

2101, et seq.

(2) Anadromous Fish Conservation Act, Pub. L. 89-304; 16

U.S.C. 757, et seq.

(3) Antiquities Act of 1906, Pub. L 59-209; 16 U.S.C. 431, et seq.

(4) Archeological and Historic Preservation Act, Pub. L. 93-291; 16

U.S.C. 469, et seq. (Also known as the Reservoir Salvage Act of

1960, as amended; Public Law 93-291, as amended; the MossBennett Act; and the Preservation of Historic and Archeological Data

Act of 1974.)

(5) Bald Eagle Act; 16 U.S.C. 668.

(6) Clean Air Act, as amended, Pub. L. 91-604; 42 U.S.C. 1857h-7,

et seq.

(7) Clean Water Act, Pub. L. 92-500; 33 U.S.C. 1251, et seq. (Also

known as the Federal Water Pollution Control Act; and Public Law

92-500, as amended.)

(8) Coastal Zone Management Act of 1972, as amended, Pub. L.

92-583; 16 U.S.C. 1451, et seq.

(9) Endangered Species Act of 1973, as amended, Pub. L. 93-205;

16 U.S.C. 1531, et seq.

(10) Estuary Protection Act, Pub. L. 90-454; 16 U.S.C. 1221, et

seq.

(11) Federal Environmental Pesticide Control Act, Pub. L. 92-516; 7

U.S.C. 136.

(12) Federal Water Project Recreation Act, as amended, Pub. L. 89-

72; 16 U.S.C. 460-1(12), et seq.

(13) Fish and Wildlife Coordination Act of 1958, as amended, Pub.

L. 85-624; 16 U.S.C. 661, et seq. (Also known as the Coordination

Act.)

(14) Historic Sites of 1935, as amended, Pub. L. 74-292; 16 U.S.C.

461, et seq.

(15) Land and Water Conservation Fund Act, Pub. L. 88-578; 16

U.S.C. 460/-460/-11, et seq.

(16) Marine Mammal Protection Act of 1972, Pub. L. 92-522; 16

U.S.C. 1361, et seq.

(17) Marine Protection, Research and Sanctuaries Act of 1972, Pub.

L. 92-532; 33 U.S.C. 1401, et seq.

(18) Migratory Bird Conservation Act of 1928; 16 U.S.C. 715.

(19) Migratory Bird Treaty Act of 1918; 16 U.S.C. 703, et seq.

(20) National Environmental Policy Act of 1969, as amended, Pub.

L. 91-190; 42 U.S.C. 4321, et seq. (Also known as NEPA; often

incorrectly cited as the National Environmental Protection Act.)

(21) National Historic Preservation Act of 1966, as amended, Pub.

L. 89-655; 16 U.S.C. 470a, et seq.

(22) Native American Religious Freedom Act, Pub. L. 95-341; 42

U.S.C. 1996, et seq.

(23) Resource Conservation and Recovery Act of 1976, Pub. L. 94-

580; 7 U.S.C. 1010, et seq.

(24) River and Harbor Act of 1899, 33 U.S.C. 403, et seq. (Also

known as the Refuse Act of 1899.)

(25) Submerged Lands Act of 1953, Pub. L. 82-3167; 43 U.S.C.

1301, et seq.

(26) Surface Mining Control and Reclamation Act of 1977, Pub. L.

95-89; 30 U.S.C. 1201, et seq.

(27) Toxic Substances Control Act, Pub. L. 94-469; 15 U.S.C. 2601,

et seq.

(28) Watershed Protection and Flood Prevention Act, as

amended, Pub. L. 83-566; 16 U.S.C. 1001, et seq.

(29) Wild and Scenic Rivers Act, as amended, Pub. L. 90-542; 16

U.S.C. 1271, et seq.
112

(b) Executive orders.

(1) Executive Order, 11593, Protection and Enhancement of the

Cultural Environment, May 13, 1979 (36 FR 8921; May 15, 1971).

(2) Executive Order, 11988, Floodplain Management. May 24, 1977

(42 FR 26951; May 25, 1977).

(3) Executive Order, 11990, Protection of Wetlands. May 24, 1977

(42 FR 26961; May 25, 1977).

(4) Executive Order, 11514, Protection and Enhancement of

Environmental Quality, March 5, 1970, as amended by Executive

Order, 11991, May 24, 1977.

(5) Executive Order, 12088, Federal Compliance with Pollution

Control Standards, October 13, 1978.

(c) Other Federal policies.

(1) Council on Environmental Quality Memorandum of August 1,

1980: Analysis of Impacts on Prime or Unique Agricultural Lands in

implementing the National Environmental Policy Act.

(2) Council on Environmental Quality Memorandum of August 10,

1980: Interagency Consultation to Avoid or Mitigate Adverse Effects National Register of Historic Places to conclude that

on Rivers in the Nationwide Inventory.

(3) Migratory Bird Treaties and other international agreements listed

in the Endangered Species Act of 1973, as amended, Section

2(a)(4).

(2) Significance based on public recognition means

that some segment of the general public recognizes

the importance of an EQ resource or attribute. Public

recognition may take the form of controversy,

support, conflict, or opposition and may be

expressed formally (as in official letters) or

informally. Environmentally related customs and

traditions should also be considered. EQ resources

or attributes recognized by the public will often

change over time as public awareness and

perceptions change.

(3) Significance based on technical recognition

means that the importance of an EQ resource or

attribute is based on scientific or technical knowledge

or judgment of critical resource characteristics.

Examples are a graveyard recognized by an

archeologist as being the focal point of a 19th century community; a rock outcropping identified by a

landscape architect as being an important scenic

element based on aesthetic rating criteria; and a

meadow identified by a wildlife biologist as the major

breeding ground for a deer herd.

(4) The significance of many EQ resources and

attributes may be recognized on more than one

basis. For example, a specific bird species may be

institutionally recognized (protected by Federal and

State law), publicly recognized (of interest to a community), and technically recognized (due to its

uniqueness in the environment).

(d) At this early point in the process, a determination of whether or not an EQ resource or attribute

would be likely to be affected is to be based on some

preliminary judgments about causes (in terms of

alternative plans) and effects (in terms of EQ resources and attributes). Such preliminary judgments

are to be based on the following considerations:

(1) Likely to be affected means that an effect on

an EQ resource or attribute is reasonably possible.

(2) The cause of an effect may be one or more

alternative plans or individual measures.

(3) The relationship of the cause to the effect

may be direct, indirect, or cumulative.

(e) Information included in the planning process

Step 2 (inventory and forecast) should be adequate

for the purposes of this activity. A fully definitive body

of evidence is not required to conclude that an EQ

resource or attribute is significant and likely to be

affected. For example, it would not be necessary to

develop all of the information needed to reach a

determination of eligibility for inclusion on the

a specific archeological site has a cultural attribute.

(f) Future conditions may change the types of

EQ resources or attributes or create new ones that

may be significant and likely to be affected; these

should be considered in this activity. For example, a

currently eutrophic lake that is forecast to develop

into a wetland ecosystem in the without-plans

condition should be considered in this activity.

Forecasts developed in later evaluation activities

(see 3.4.7 and 3.4.8) will provide the bases for

identifying such EQ resources and attributes.

(g) Agencies should invite the public to participate in the identification of EQ resources and attributes that are significant and likely to be affected.

Agencies are encouraged to integrate the public's

participation in this activity into the means used to

meet the scoping requirements of the P&G and the

CEQ NEPA regulations (40 CFR 1501.7) to avoid

duplication of public involvement efforts.

(h) Appendix A provides an example documentation format for recording the results of this activity.

3.4.4 Develop evaluation framework activity.

(a) This activity is performed to specify the ways in

which changes in EQ resources and attributes, as

identified in the previous activity, will be measured or

otherwise described. For each EQ attribute, planners

should specify one or more indicators of quantity

and/or quality. Indicators are used to measure or

otherwise describe existing and future conditions and

the effects of alternative plans. For each indicator,

planners should specify a unit (numeric or non-numeric

term in which the indicator is measured or otherwise

described); a guideline (institutional, public, or technical

basis for determining whether an effect on an indicator

is beneficial or adverse); and a technique (procedure

for measuring or otherwise describing the indicator in

terms of its unit). Figure 3.4.4 graphically illustrates the

evaluation framework.
113

Resource #1 Cultural

Ecological

Aesthetic

Indicator #2 Unit #2 Guideline #2 Technique #2

Indicator #1 Unit #1 Guideline #1 Technique #1

Indicator N Unit N Guideline N Technique N

See Appendix A, Table 2 for an example

Figure 3.4.4

Evaluation Framework

RESOURCE ATTRIBUTE INDICATOR UNIT GUIDELINE TECHNIQUE

Indicator #2 Unit #2 Guideline #2 Technique #2

Indicator #1 Unit #1 Guideline #1 Technique #1

Indicator N Unit N Guideline N Technique N

Indicator #2 Unit #2 Guideline #2 Technique #2

Indicator #1 Unit #1 Guideline #1 Technique #1

Indicator N Unit N Guideline N Technique N
114

(b) For each EQ resource attribute, planners (5) Guidelines that are stated in a word or

should specify one or more indicators. The phrase may, in some cases, be translated into a

number of indicators specified should be sufficient

to adequately measure or otherwise describe

changes in the quantity or quality of an EQ

attribute. Since indicators are the primary factors

that will determine the amount and level of detail

of information collection, care must be exercised to

ensure that the number of indicators is not so large

that information requirements are unreasonably

demanding. See 3.2.1 for examples of indicators.

(c) For each indicator, planners should specify a

unit of measurement or description. Units will

usually be readily identifiable from the nature of an

indicator. For example, the indicator "area" could

be described in terms of the unit "acres" or "square

miles." See 3.2.1 for other examples of units.

(d) For each indicator, planners should specify a

guideline.

(1) Guidelines should be based on institutional,

public, or technical recognition. Examples of

institutional guidelines are State air and water

quality standards and the access criterion for

Federally designated wild rivers. Examples of

guidelines based on public recognition are

preservation of a locally valued natural viewscape

and the protection of a regionally popular reach of

white water river. Examples of guidelines based on

technical recognition are a minimum dissolved

oxygen concentration of five parts per million for

brown trout and the preservation of an

archeological site's association with an important

event.

(2) The decision to use a guideline based on

technical or public recognition instead of an

existing institutional guideline, or to use one

institutional guideline instead of another, should be

justified. Examples of this situation are the choice

of a more restrictive suspended solids standard

based on a recent limnological study (technical

recognition) over a less restrictive State suspended

solids standard (institutional recognition); and the

choice of a more restrictive, locally established

noise level standard over a State or federally

established standard.

(3) Planners should recognize recent and anticipated future changes in guidelines based on

changing institutional, public, and technical

concerns. The phased implementation of State

water quality standards developed pursuant to

Pub. L. 92-500 is an example of a change that

could be anticipated.

(4) Planners should also recognize that guidelines may differ for a given indicator among localities and regions. For example, air quality

standards vary among the States and often vary

for areas within a given State.

number.

(i) For example, the guideline "protection of a

popular reach of white water river" could be

restated in terms of the physical dimension of the

reach, such as "two miles," that provides a specific

working definition of "protection''.

(ii) Examples of words that may provide a basis

for a guideline are enhancement, improvement,

preservation, protection, conservation, maintenance, creation, restoration, repair, and rehabilitation.

(6) Guidelines may be expressed as a single

level (example: habitat suitability index of 1.0); as a

range between two levels (example: pH between

6.5 and 8.0 for fish); or as a threshold level (example: total dissolved solids not greater than 500 parts

per million).

(7) In cases where several seemingly conflicting

guidelines have been proposed, planners should attempt to specify a single guideline by determining

the specific reasons why each proposed guideline is

desirable.

(i) For example, the Blue River has an indicator

"water flow," which is described in "cubic feet per

second (cfs)" units; a local agricultural cooperative

that uses the river for irrigation water proposes a

guideline of "X cfs;" a homeowners association that

enjoys the view of the river proposes a guideline of

"Y cfs;" and a fisheries biologist proposes a "Z cfs"

based on the needs of the river's anadromous fish

populations.

(ii) In this example the "Y cfs" guideline would be

appropriate for the rivers visual aesthetic attribute

but would not be used for its ecological or cultural

attributes. Similarly, the "Z cfs" guideline would be

appropriate for the river's fishery ecological attribute. The "X cfs" guideline would not be appropriate for EQ evaluation since it is not related to an EQ

attribute.

(e) For each indicator, planners should specify a

technique for measuring or otherwise describing

current and future conditions of the indicator in

terms of the indicator's specified unit. Table 3.4.4

lists examples of techniques currently used in water

resources planning. Regardless of the technique

used to measure or otherwise describe an indicator

agencies should ensure the professional and scientific integrity of techniques and their resultant analyses, as required by the CEQ NEPA regulations (40

CFR 1502.24).

(f) Although the parts of the evaluation framework are presented in a specific order, planners

may, after first selecting indicators, select units,

guidelines, and techniques in any sequence.
115

Table 3.4.4—Example Techniques

Technique Document reference Availability Current uses Comments

Indicator

measured

Habitat Evaluation U.S. Dept. of the Interior, Fish and Chief, Div. of Habitat quality Nationwide,

Procedures (HEP). Wildlife Service. Habitat Ecological Services, and quantity. Major Corps, BR,

Evaluation Procedures.

Washington, DC 20240, March

1980. ESM 102.

Fish and Wildlife and SCS water

Service, U.S. Dept. of projects.

the Interior,

Washington, DC

20240, (202)343-4764

Team Leader, WELUT, Also applicable to

Project Impact BLM and USFS

Evaluation Team, Div. projects and

of Ecological Services, projects licensed

Fish and Wildlife by FERC and

Service, U.S. Dept. of NRC.

the Interior, Creekside

One, 2625 Redwing

Road, Fort Collins, CO

80526, (303)223-2040

Habitat Evaluation U.S. Army Engineer Div., Lower Chief, Environ. Res. Habitat quality. Lower Mississippi Information/a

System (HES). Miss. Valley. A Tentative Habitat Branch, U.S. Army Valley area. nalysis base

Evaluation System (HES) for Water

Resources Planning. Vicksburg,

MS, July 1979.

Engineer Division, fully

Lower Mississippi developed

Valley, P.O. Box 80, only for the

Vicksburg, MS 39180, lower

(601)634-5000, Mississippi

ex.5849. Valley area.

Instream Flow BoVee, K.D. and T. Cochnaur, Team Leader, WELUT, Minimum, Nationwide. 

Incremental 1977. Development and Instream Flow and sustained, Major Corps, BR

Methodology (IFIM). Evaluation of Weighted Criteria, Aquatic Systems augmented, and and SCS

Probability-of-Use Curves for

Instream Flow Assessments: 

Fisheries. Instream Flow

Information Paper No.3,

FWS/OBS-77/63, 38 pages.

Group, Div. of maximum flows. Projects. Also

Ecological Services, applicable to BLM

Fish and Wildlife and USFS

Service, U.S. Dept. of projects and

the Interior, Creekside projects licensed

One, 2625 Redwing by FERC and

Road, Fort Collins, CO NRC.

80526, (303)223-2040

BoVee, K.D. and R.T. Milhous,

1978. Hydraulic Simulation in

Instream Flow Studies: Theory

and Techniques. Instream Flow

Information Paper No.5,

FWS/OBS-78/33, 131 pages.

Stainaker, C.D., 1979. The Use of

Habitat Structure Preferenda for

Maintenance of Fish Habitat. The

Ecology of Regulated Streams,

Edited by J.U. Ward and J.S.

Starrford, Plenum Publishing

Corp., pp.31-337.

Visual Resource U.S. Dept. of the Interior, Bureau of Bureau of Land Visual contrast.

Contrast Rating. Land Management. BLM Manual Management, U.S.

Section 8431-Visual Resource

Contrast Rating. Washington, DC. 

August 1978.

Dept. of the Interior,

Washington, DC

20240, (202)343-9353

Upland Visual U.S. Dept. of the Interior, Bureau of Bureau of Land Scenic quality.

Resource Inventory Land Management. BLM Manual Management, U.S.

and Evaluation. Section 8411-Upland Visual Dept. of the Interior,

Resource Inventory and

Evaluation. Washington, DC,

August 1978.

Washington, DC

20240, (202)343-9353.
116

Table 3.4.4—Example Techniques—Continued

Technique Document reference Availability Indicator Current uses Comments

measured

Procedure To U.S. Dept. of Agriculture, Soil Soil Conservation Landscape Primarily used for Developed

Establish Priorities Conservation Service. Technical Service, U.S. Dept. of resource SCS studies. for

in Landscape Agriculture, quality. nationwide

Architecture. Washington, DC use.

Release No. 65, Procedure to

Establish Priorities in Landscape

Architecture. Washington, DC,

October 1978.

20250, (202)447-7443.

Visual Management U.S. Dept. of Agriculture, Forest Forest Service, U.S. Scenic variety Primarily used for Developed

System. Service. National Forest Dept. of Agriculture, classes and Forest Service primarily for

Landscape Management, Vol.2,

Chapter 1, The Visual

Management System. 

Washington, DC, April 1974.

Washington, DC sensitivity studies. the

20250, (202)447-7754. levels. northwestern

U.S.; criteria

should be

adapted for

other

regions.

(1) Planners should recognize that indicators, units, attribute. The existing condition is the most recent

guidelines, and techniques are highly interde- measurement or other description of an attribute as

pendent and that the specification of one influences it existed at the latest date of the trend condition.

the specification of the others. For example, if Trend and existing conditions of attributes should be

"dissolved oxygen" and "coliforms" are selected as described in terms of the quantity and quality inindicators of the ecological attribute of a river re- dicators and their related units, as specified in the

source and a State's water quality standards for previous activity.

dissolved oxygen and coliforms are selected as

guidelines, then the units, such as milligrams per

liter (mg/l) for dissolved oxygen and most probable

number (MPN) of coliforms, would follow.

(2) If either a unit, a guideline, or a technique for the identified EQ resource attributes is included.

cannot be specified for an indicator, then the indi- Relevant trend condition information should be colcator should not be used. lected where it is readily available. If existing condi-

(g) Appendix A provides an example documentation format for recording the results of this activity.

3.4.5 Inventory resources phase.

This phase is performed to collect and develop (c) Information collection programs should proinformation, within the previously defined evaluation duce information in accordance with the evaluation

framework, for use in assessing the effects of alter- framework developed in the previous activity, innative plans. In the first activity, the trend and exist- cluding the use of specified techniques to develop

ing conditions of identified EQ resource attributes information for each indicator in terms of its speciare measured or otherwise described. In the fied unit. Information collection programs should

second and third activities, future without-plans and use professionals with expertise relevant to each

with-plan conditions of identified EQ resource attri- EQ resource attribute for developing and analyzing

butes are estimated. information, in accordance with the CEQ NEPA reg3.4.6 Survey existing conditions activity.

(a) This activity is performed to collect information that required information is available when needed

that measures or otherwise describes the trend and for EQ evaluation. The EQ information base should

existing conditions of the identified EQ resource be reviewed during each stage of EQ evaluation to

attributes. The trend condition is the recorded progressively focus it at the proper level of detail

historic measurement or other description of an and completeness necessary for evaluation.

(b) This EQ evaluation activity is an integral part

of the planning process Step 2 (inventory and forecast). It should begin with a review of that information base to determine whether or not information

tion information for an attribute (in terms of its

specified indicators) is not included in Step 2 or, if

such information is invalid or out of date, an information collection program should be developed

and implemented to provide the necessary

information.

ulation requirements related to cooperating agencies (40 CFR 1501.6) and scoping (40 CFR 1

501.7(a)(4) and (6)). Information collection programs should be initiated early enough to ensure
117

(d) Appendix A provides an example documenta- body of information has been developed on the

tion format for recording the results of this activity. known effects of existing water resources projects,

3.4.7 Forecast without-plans conditions

activity.

(a) This activity is performed to develop informa- considered are—

tion that measures or otherwise describes the

future conditions of EQ resource attributes in the

absence of any of the alternative plans under consideration. Without-plans conditions should be esti- (2) Use of scenarios to estimate hypothetical fumated in terms of the same quantity and quality in- tures and the likely sequences of events that might

dicators used in the previous activity. lead to those futures;

(b) This activity is also an integral part of the (3) Use of expert group judgment approaches,

planning process Step 2 (inventory and forecast), such as Delphi and nominal group, in which the

and should begin with a review of that information views of relevant professionals about future condibase to determine whether or not information for tions are systematically elicited and analyzed; and,

the identified EQ resource attributes is included. If

without-plans condition information for an EQ resource (in terms of its specified indicators) is not

included in Step 2 or, if such information is invalid

or out of date, a forecasting program should be (5) Use of analogy and comparative analyses, in

developed and implemented to provide necessary which the effects of actions similar to those expectinformation. The subsection on information ed in the without-plans condition, on the specified

collection programs (3.4.6(c)) is also applicable to indicators, in similar environmental settings are

forecasting programs for without-plans conditions. used to estimate future conditions.

(c) Without-plans conditions are the most prob- (e) Forecasting approaches should be

able conditions based on consideration of the fol- compatible with the measurement and description

lowing: techniques specified in the evaluation framework.

(1) Trend and existing conditions information, as (1) For example, if the Habitat Evaluation

developed in the previous activity;

(2) Other available related forecasts (for example, local land use plans, population projections,

plans of commercial and industrial developers);

(3) Established institutional objectives and constraints and customs and traditions related to the

resource (for example, State historic presentation

plans, management goals for wildlife refuges,

zoning ordinances, local agricultural practices);

(4) Direct, indirect, and cumulative effects of all

reasonably foreseeable actions of people

expected to occur in the absence of any of the

study's alternate plans (for example, effects of a

habitat management program, a water supply

project, or an on farm drainage action);

(5) Direct, indirect, and cumulative effects of natural occurrences, such as natural succession or

the passage of time (for example, an existing

abandoned farmland might be shown to succeed

to a grassland, a shrub land, and finally to a

woodland over the period of analysis; a public

building may be forecast to be of historic interest in

the futures); and

(6) Known effects of comparable past actions on

the same or similar resources. (A considerable

industrial developments, highways, etc.; many of

these include programs to monitor and record ongoing effects).

(d) General forecasting approaches that may be

(1) Adoption of available forecasts developed by

other sources;

(4) Use of extrapolation approaches, such as

trend analysis and simple modeling, which rely on

historic trend information to estimate the future.

Procedure (HEP; U.S. Fish and Wildlife Service,

1980) is used in the previous activity to describe

the existing condition of a particular habitat, the

forecasting approach(es) used to estimate the

without-plans condition of the habitat must produce

information that can be used in the HEP analysis.

(2) In most cases it is not possible to directly

forecast change in an indicator. It will usually be

necessary to forecast changes in factors that influence the indicator. Influencing factors may include

changes in the uses and conditions of related land,

water, and air. For example, given the indicator

"stream water temperature," it may be necessary

to forecast changes in streamside vegetation,

upstream water uses, and other influencing factors

in order to derive the information needed to apply

the technique specified in the evaluation

framework for measuring changes in the indicator

(stream water temperature).

(f) Forecasts should estimate future conditions

over the entire period of analysis; but if this is not

realistic or reasonable, planners should develop a

forecast of the longest possible duration and give

their reasons for not estimating to the end of the

period. Conversely, the period of analysis should

not constrain longer-term forecasts if they can be
118

realistically and reasonably made and if they are 3.4.9 Assess effects phase.

needed to describe irreversible or irretrievable

commitments of resources or the relationship of

short term uses of man's environment to long-term

productivity, as required by NEPA and the CEQ

NEPA regulations (40 CFR 1502.16).

(g) A without-plans condition should be expressed for several specified future dates, hereinafter called forecast dates. A sufficient number of

forecast dates should be selected to permit adequate description of future changes in the

indicator. However, the number of forecast dates

should not be so large that an unreasonable 3.4.10 Identify effects activity.

information burden is created. A proper balance

between adequate description and information

demands should be achieved. Without-plans

conditions should not be expressed as an average

or median over the period of analysis if such

expressions would obscure future changes in an

indicator.

(h) A without-plans condition should be the most

probable future condition for an indicator.

(i) Appendix A provides an example documentation format for recording the results of this activity.

3.4.8 Forecast with-plan conditions activity.

(a) This activity is performed to develop information that measures or otherwise describes the

future conditions of EQ resource attributes under

each of the alternative plans being considered.

With-plan conditions should be estimated for each

alternative plan in terms of the same quantity and

quality indicators used in the previous activity.

(b) The bases for estimating with-plan conditions

include those used in forecasting without-plans

conditions: Trend and existing conditions, related

forecasts, institutional objectives and constraints

effects of other actions, the effects of natural occurrences, and the known effects of comparable

past actions (see 3.4.7(c)).

(c) Approaches that should be considered for

forecasting with plan conditions include those used

in forecasting without-plans conditions: adoption,

scenario writing, expert judgment techniques, extrapolation techniques, and analogy and comparative analyses. (See 3.4.7 (d) and (e)).

(d) The subsection on information collection programs (3.4.6(c)) and forecasting without-plans

conditions over the entire period of analysis

(3.4.7(f)) are also applicable to with-plan

conditions. With plan conditions should be

estimated for the same forecast dates used for the

without-plan conditions (see 3.4.7(g)).

(e) Appendix A provides an example documentation format for recording the results of this activity.

This phase is performed to identify and describe

effects of alternative plans on EQ resource attributes. In the first activity, without-plans conditions

and with-plan conditions are compared to identify

differences between them. In the second activity

identified differences (effects are described in

terms of duration, location, and magnitude. In the

third activity, the significance of these effects is determined.

(a) This activity is performed to identify differences between the without-plans and with-plan estimates for each indicator. An effect is shown to

occur whenever without-plans and with-plan estimates of an indicator are different at one or more

of the forecast dates.

(b) If all of the specified indicators for a particular

EQ attribute of a resource are shown to be unaffected by each of the alternative plans (that is,

each indicator's without-plans and with-plan estimates are the same for all forecast dates), the unaffected attribute should be eliminated from EQ

evaluation. The attribute should be reintroduced

into EQ evaluation if it is likely to be affected by a

new alternative plan.

(c) Appendix A provides an example documentation format for recording the results of this activity.

3.4.11 Describe effects activity.

(a) This activity is performed to describe each

effect identified in the previous activity. Effects

should be described in terms of their duration, location, and magnitude.

(b) Duration is the time at which, or over which,

an effect is expected to occur. It should be described for the forecast dates and may be summarized in terms of a time period beginning at a specific time, such as "20 years beginning in 1990."

Duration will usually be continued to a span of time

within the period of analysis, but some effects,

such as the loss of a distinctive land-form, may

exceed the period of analysis (see 3.4.7(f) and

3.4.7(d)).

(c) Location is the place at which an effect is expected to occur. It should be described in terms of

an identifiable geographic location, such as "between river miles 57 and 63." The location of an

effect should be described as specifically as possible without revealing the location of sensitive resources such as archaeological sites and

endangered species habitats that could be

jeopardized by wide distribution of the information.
119

(d) Magnitude is the size of the difference be- recognition of an effect is local concern over the

tween an indicator's without-plans and with-plan

estimates for a particular forecast date. If an

indicator is measured in cardinal units (that is, the

units can be added, subtracted, multiplied, and

divided), magnitude should be expressed as the

numeric difference between the without-plans and

with-plan estimates for each forecast date. If an

indicator's unit is based on some other type of

numeric scale or is descriptive (such as an ordinal

scale of "great diversity, moderate diversity, low

diversity,") magnitude should be expressed in

either a numeric or descriptive form suitable for

accurately describing the difference for each

forecast date. (e) If none of the effects on a particular EQ attri-

(e) Other characteristics of effects may be described if the description is relevant and useful to

decisionmaking. Such characteristics could include

reversibility, retrievability, and the relationship to

long-term productivity. (f) Appendix A provides an example documen-

(f) Appendix A provides an example documentation format for recording the results of this activity.

3.4.12 Determine significant effects activity.

(a) This activity is performed to identify which of

the previously described effects are significant; that

is, that are institutionally, publicly, or technically

recognized as important to people, and should

therefore be taken into account in decisionmaking.

Focusing on significant issues is required by the

CEQ NEPA regulations (40 CFR 1500.1(b),

1501.7(a)(2) and (3), and 1 502.2(b)).

(b) Significance based on institutional recognition

means that the importance of the effect is

acknowledged in the laws, adopted plans, and

other policy statements of public agencies and

private groups. See 3.4.3(c)(1) for examples of

sources of institutional recognition. Institutional

recognition of an effect is often explicit in the form

of specific criteria for determining whether an

effect is significant. Examples are the criteria in

the CEQ NEPA regulation (40 CFR 1508.27),

Executive Order 11990 concerning the protection

of wetlands, and the regulations of the Advisory

Council on Historic Preservation covering the

protection of historic and cultural properties (36

CFR Part 800).

(c) Significance based on public recognition

means that some segment of the general public

recognizes the importance of the effect. Public

recognition may take the form of controversy,

support, conflict, or opposition; it may be

expressed formally (as in official letters) or

informally. Environmentally related customs and

traditions should also be considered in determining

sources of public recognition. An example of public

potential decline of a trout fishery caused by an

alternative plan.

(d) Significance based on technical recognition

means that the importance of an effect is based on

technical or scientific criteria related to critical resource characteristics. Examples are maintenance

of permanent low flow in a previously intermittent

stream that leads to a year-round fishery, and reduction in the number of a certain type of

archeological site that contains information related

to a particular historic period to the extent that

currently numerous sites would become scarce.

bute is significant, the attribute should be eliminated from EQ evaluation. The attribute should be

reintroduced into EQ evaluation if it is likely to be

affected by a new alternative plan.

tation format for recording the results of this activity. Attributes and resources that are not significantly affected should be documented as required by

the CEQ NEPA regulations (40 CFR 1501.7(a)(3)).

3.4.13 Appraise effects phase.

This phase is performed to identify the

desirability of significant effects on EQ resources,

individually and collectively, for each alternative

plan. In thefirst activity, significant effects on

indicators and EQ attributes should be appraised

as either "beneficial" or "adverse." In the second

activity, each alternative plan's overall net effect on

EQ should bejudged as "net beneficial," "net

adverse," or "no net effect."

3.4.14 Appraise significant effects activity.

(a) This activity is performed to appraise each alternative plan's individual significant effects on

each significant EQ resource attribute as either

beneficial or adverse. The activity should be performed in two steps. In the first step, the desirability

of effects on indicators is appraised according to

guidelines. In the second step, the effects on EQ

attributes are appraised.

(b) First, the effects on indicators should be appraised as either beneficial or adverse according

to the following criteria:

(1) An effect is beneficial if, for a given indicator,

the with-plan condition more closely approaches

or attains the indicator's guideline than its

without-plans condition. For example, the Julian

City archaeological site has been identified as an

EQ resource with an indicator "sense of

association with a significant event" for its cultural
120

attribute. The indicators guideline has been proaches or attains the indicator's guideline than

specified as "presentation of the site's sense of

association." If, for a given forecast date, the site's

without-plans condition shows that the association

would be lost as a result of planned residential

development, but its with-plan condition for Plan X

shows that the association would be preserved as

a result of Federal land acquisition included in the

plan, the effect of Plan X would be classified as

beneficial. See Figure 3.4.14-1 for a graphic

illustration of this example.

 (2) An effect is adverse if, for a given indicator,

the without-plans condition more closely apits with-plan condition. For example, the Gradey

Swamp habitat has been identified as an EQ resource with an indicator "habitat suitability" for its

ecological attribute. The indicator's guideline has

been specified as "habitat suitability index of 1.0."

An adverse effect would occur if, for a given forecast date, the habitat's without-plans condition

showed a habitat suitability index of 0.7 and its

with-plan condition for Plan Y showed a habitat

suitability index of 0.5. See Figure 3.4.14-2 for a

graphic illustration of this example.
Figure 3.4.14-1

Example of Beneficial Effect

Time in Years

Guideline With Plan “X”

Without Plans

Beneficial

Effect

High

Moderate

Low

Lost

Without Plans

Time in Years

With Plan “X”

1.0

0.8

0.6

0.4

0.2

0.0

Guideline

Adverse Effect

Guideline

Time in Years

With Plan “Z”

500

400

300

200

100

0

Without Plans Adverse

Effect

Beneficial Effect

Figure 3.4.14-3

Example of Beneficial & Adverse Effects

Figure 3.4.14-2

Example of Adverse Effect

121
122

(3) If the relationship between an indicator's with- be adversely affected by human activities, such as

out-plans and with-plan condition changes over the recreation, attracted to the area Conversely, an

period of analysis so that an effect would be bene- improvement in the productivity of a habit would not

ficial part of the time and adverse at other times, the necessarily be beneficial unless an adequate

different desirabilities should be shown as identified amount of habitat would be available.

for each of the forecast dates. For example, a levee

to be constructed as a part of Plan Z would initially

destroy 200 acres of streamside riparian habitat.

However, with the habitat management program

included in the plan, the habitat would be restored

and an additional 100 acres would be changed to

become riparian habitat. See Figure 3.4.14-3 for a

graphic illustration of this example.

(c) Second, the effects on each EQ attribute should

be appraised as either beneficial or adverse based

on the judgment of professionals with expertise

relevant to each attribute.

(1) The following should be considered in judging

the desirability of an effect on an EQ attribute:

(i) The duration, location, magnitude, and other

relevant characteristics of effects on the attribute's

indicators as previously identified (see 3.4.11).

(ii) The appraisal of effects on the attribute's indicators (beneficial or adverse), as identified in the

previous step (see paragraph (b) of this section).

(iii) The relationships among the attribute's quantity

and quality characteristics, as expressed in effects

on the attribute's indicators. For example, the

acreage (quantity) of a particular habitat may be

beneficially increased with an alternative plan, but

the habitat's productivity (quality) could

(iv) Whether effects on the indicators, the attribute, or the resource would fulfill or violate a public

law, executive order, or other source of institutional

recognition. See 3.4.3(c)(1) for examples of sources

of institutional recognition.

(v) Whether effects on the indicators, the attribute, or the resource would be supported or otherwise viewed as beneficial by the public, or would be

opposed or otherwise viewed as adverse by the

public.

(vi) Whether effects on the indicators, the attribute, or the resource would be critical based on

scientific or technical knowledge or judgment.

(vii) Other considerations that may have a

material bearing on decisionmaking. Such other

considerations should be clearly described.

(2) Agencies may use various approaches, such

as weighting, scaling or ranking, to consider these

factors in judging effects on EQ attributes. Approaches used should be documented.

(d) Appendix A provides example documentation

formats for recording the results of this activity. A

table should be prepared in accordance with the

format illustrated in Table 3.4.14 for each candidate

plan and provided to the agency decisionmaker for

judgment of net EQ effects.

Table 3.4.14—Significant EQ Effects

[Alternative plan “X”]

Significant resources Effects on EQ attributes: Notes

Ecological, Cultural, and Aesthetic

Resource No. 1. For each attribute of a resource, enter Briefly enter any other information that may be

Resource No. 2.

Resource No. 3.

Resource N.

“beneficial” or “adverse”, and briefly state the relevant to the judgment of net EQ effect of

rationale for each entry. For example: the plan, such as notes concerning mitigation,

“Adverse, effect would violate State water incomplete or unavailable information, etc.

quality standards”, and “Beneficial, effect

would stabilize ecosystem trophic

relationships”.

3.4.15 Judge net EQ effects activity. EQ resources outweigh the plan's combined

(a) This activity is performed to describe the net

(overall) EQ effect of each alternative plan. Net

effect should be described as “net beneficial EQ

effect," "net adverse EQ effect," or "no net EQ

effect" according to the following criteria:

(1) A net beneficial EQ effect occurs when, in the

judgment of the agency decisionmaker, an

alternative plan's combined beneficial effects on

adverse effects on EQ resources.

(2) A net adverse EQ effect occurs when, in the

judgment of the agency decisionmaker, an

alternative plan's combined adverse effects on EQ

resources outweigh the plan's combined beneficial

effects on EQ resources.

(3) No net EQ effect occurs when, in the judgment of the agency decisionmaker, an alternative
123

plan's combined beneficial effects on EQ Reasons for the change should be properly

resources equal the plans combined adverse documented.

effects on EQ resources.

(b) The agency decisionmaker is responsible for decisionmakers by presenting information bearing

judging which of these types of net EQ effects best on the judgment of net EQ effect in a manner that

reflects the desirability of an alternative plan's aids the judgment process. As a minimum, the

overall effect on environmental quality. This tables used to document the previous activity, as

judgment should be based on a thorough illustrated in Table 3.4.14, should be provided to

consideration of significant effects on significant the decisionmaker prior to his or her judgment of

EQ resources. In making a judgment of net EQ net EQ effect.

effect, the agency decisionmaker is acting on

behalf of the public and should therefore consider

public views related to the judgment. The

decisionmaker may change a judgment on the net

EQ effect of an alternative plan if the change is a

reevaluation of existing information or if relevant

new information is brought to his or her attention.

(c) Planners should assist agency -

(d) The net EQ effect of each alternative plan

should be expressed in a clear and complete

narrative statement that identifies the type of net

EQ effect expected and, as specifically as

practical, the reasons that provided the basis for

the judgment.
124

This page is intentionally left blank.
125

Appendix A—Example Documentation Formats

Note.—This appendix is provided for background (b) Table examples. In addition to format guidance,

information.

(a) Introduction. (1) This appendix provides

examples of tables that can be used to

record the results of EQ evaluation activities.

The tables and the activities are as follows:

(i) Table 1—identify resources activity (3.4.3).

(ii) Table 2—Develop evaluation framework activity 

(3.4.4).

(iii) Table 3—Survey existing conditions activity

(3.4.6).

(iv) Table 4—forecast without-plans conditions

activity 

(3.4.7).

(v) Table 5— forecast with-plan conditions activity 

(3.4.8).

(vi) Table 6 Identify effects activity (3.4.10).

(vii) Table 7—Describe effects activity (3.4.11).

(viii) Table 8—Determine significant effects activity 

(3.4.12).

(ix) Table 9—Appraise significant effects activity

(3.4.14(b)), appraisal of effects on indicators.

(x) Table 10—Appraise significant effects activity

(3.4.14(c)), appraisal of effects on attributes.

(2) The tables are intended for use as working 

documents; if developed for a given EQ 

evaluation, they could be included as an 

appendix to an agency's planning document or 

EIS (see 40 CFR 1502.10(k) and 1502.18).

(3) See 3.4.9(d) for a discussion of other 

documentation formats that may be used to 

record the results of EQ evaluation.

this appendix presents examples of how the results

of EQ evaluation activities could be recorded in the

table format. The examples are presented as an

aid to follow through the EQ evaluation process.

The examples are based on the following

hypothetical water resources planning situation:

(1) An alternative plan, designated Plan A, was

formulated for the Pine Valley area to address the

following problems and opportunities:

(i) Periodic flooding of a portion of the town of Pine

Valley due to overtopping of the natural stream

banks of Pine Creek.

(ii) The existing stream channel is eroding badly,

endangering an Indian winter camp site (Pine

Valley Village).

(iii) Pine Valley is noted for its natural beauty, and

many people visit the area to view the valley and its

surroundings.

(iv) Pine Valley is a major deer fawning area for the

Pine Mountain deer herd.

(2) Plan A, which consists of a two-mile long levee,

was formulated to protect the town from flooding,

and the Indian village site from being destroyed by

stream bank erosion. However, construction of the

levee would require removal of stream side riparian

vegetation along the right bank of Pine Creek. This

vegetation comprises most of the fawning area for

the Pine Mountain deer herd.

(3) Figure 1 presents a map of this planning setting.
126
127

Appendix A—Table 1. Identification of EQ Resources to be Evaluated.

Resources (yes/no) (yes/no) Notes

EQ Attributes Significance Likely To Resource

Be To Be

Affected Evaluated

Ecological Cultural Aesthetic Institutional Public Technical

Recognition Recognition Recognition

R Deer fawning — — — — Major yes yes 1

 Pine Valley Meadow area Fawning

— Indian Winter — Included in — Mt. Deer yes yes

— — View of — Public yes yes

Camp State List of Herd

Meadow & Acknowledged

Winter Camp Desirability of —

(Site) Meadow &

Historic Sites —

Winter Camp

Area for Pine

R Trout — — — — 40% of yes yes 2

 Pine Creek (river Spawning Suitable

miles 169-171) Habitat Spawning

Gravels

Located in

This Reach

of Pine

Creek

R — — View Site For — — — no no 3

 Pine Valley Overlook Pine Valley

Area

R — — — — Acknowledged — yes no To Be 4

 Town Of Pine Creek As A Problem Evaluated

(area of flooding) That Needs in NED

Resolution
128

Appendix A—Table 2. Evaluation Framework.

Resources Attributes Indicators Units Guidelines Notes

EQ Techniques

Names Documentation References

R1 Ecological Terrestrial Habitat Habitat Units Not less than 19 HEP Habitat Evaluation Procedures

Pine Valley (quality & quantity Habitat Units (FWS-E6M 102)

Meadow aspects) State Annual Deer

Deer Fawns Number of per year Hard)

Fawns

75 or more Fawns Census (Pine v. See Bibliography #1

Cultural Area of Site Acres Preservation of Map Plammeter See Bibliography #2

Representativeness Importance Preservation Importance See Bibliography #3

Research Value Preservation Technique See Bibliography #4

Ranking (High Ranking) Ranking

Importance (High Ranking) Importance

Ranking Ranking

Entire Site

Technique

Aesthetic Landscape Priority Landscape H Ranking PEPLA Procedures to Establish Priorities

Priority Ranking in Landscape Architecture (SCSTR

9

#CF)

R2

Pine Creek

(etc)
129

Appendix A—Table 3. Trend and Existing Conditions.

Resources EQ Attributes Indicators Condition

Trend Conditions

Existing

(Units/Date) Notes Trend Trend Trend

(Units/Date) (Units/Date) (Units/Date)

R1 Ecological Habitat 22 (1950) 20 (1970) 19 (1975) 19 (1980) Trend Conditions Estimated

Pine Valley From 1950, 1970 & 1978

Meadow Surveys (Photos)

Fawns 50 (1950) 50 (1970) 60 (1975) 65 (1980)

Information From Annual Census

(Pine Mt. Deer Hard)

Cultural Area of Site 6 ac. (1942) 6 ac. (1950) 6 ac. (1970)

Represent- unknown unknown unknown

ativeness

Research unknown unknown High

Value

6 ac. (1970) Indian Winter Camp Discovered in

High

High

1942

Aesthetic Landscape unknown unknown H Ranking (1978)

Priority

8 H Ranking (1980) 8

R2

Pine Creek
130

Appendix A—Table 4. Without-Plans Conditions

Resources EQ Date Date Date 1 Date 2 Date 3 Locational tation

Attributes Indicators (1990) (1995) (2005) (2025) (2045) Changes Names References

Without-Plans Conditions Forecast Techniques

Notes

Notes

Start End

Implemen Implemen

tation tation Forecast Forecast Forecast DocumenR1 Ecological Habitat 22 24 27 29 30 None Extrapo- See Local Wildlife

Pine lation Bibliography group is vaery

Valley #5 active in

Meadow Fawns 68 69 75 78 80 None Extrapo- Wildlife

lation See Management

Bibliography Program

#6

Cultural Area of 6.9 ac. 6.6 ac. 5.3 ac. 3.0 ac. 2.9 ac. Less along Extrapo- See

Site Eastern Side lation Bibliography

Represent- Camp due to Scenarios

ativeness Erosion Loss See

Research Artifacts & Part lation #8

Value of Site

High High High High High of Winter #7

High High Moderate Low Low of Some Extrapo- Bibliography

See

Bibliography

#9

Aesthetic Landscape H H H H M None Scenarios Pine County

Priority Planning

8 8 7 6 7

Dept. Report -

Future

Landscapes

for Pine Valley

1978-2028,

Vol 2

R2 Pine

Creek
131

Appendix A—Table 5. With-Plan Conditions for PlanA .

Resources Attributes Indicators (1990) (1995) (2005) (2025) (2045) Changes Names References

EQ tation Date tation Date Date 1 Date 2 Date 3 Locational Documentation Notes

With-Plan Conditions Forecast Techniques

Start End

Implemen- Implemen- Forecast Forecast Forecast

R1 Ecological Habitat 19 8 10 14 19 None Model See Riparian

Pine Valley Bibliography Vegetation

Meadow #10 Slowly Returned

Deer 65 20 32 47 65 None Model After

Fawns See Construction

Bibliography

#11

Cultural Area of 5.9 ac. 5.9 ac. 5.9 ac. 5.9 ac. 5.9 ac. Model See

Site Bibliography

Represent- See

ativeness Bibliography

Research

Value See

High High High High High Scenario

High High High High High Scenario #13

0.1 ac. of

Camp Site &

Artifacts Lost

Due to

Erosion

None

None

#12

Bibliography

#14

Aesthetic Landscape H L L M M None Scenario See

Priority Bibliography

8 4 4 5 6

#15

R2

Pine Creek
132

Appendix A—Table 6. Identification of Effects For PlanA .

Resources E Attributes Indicators (1990) tation Date (1995) (2005) (2025) (2045) Effect (yes/no) Notes

Difference Between Without-Plans and With-Plan Conditions (yes/no)

Start Implemen- Forecast Forecast Forecast

tation Date End Implemen- Date 1 Date 2 Date 3

R1 Ecological Habitat yes yes yes yes yes yes

Pine Valley

Meadow Deer Fawns yes yes yes yes yes yes

Cultural Area of Site no yes yes yes yes yes

Representativeness no no no no no no

Research Value no no no yes yes yes

Aesthetic Landscape Priority no yes yes yes yes yes

R2

Pine Creek
133

Appendix A—Table 7. Descriptions of Effects For Plan A .

Resources E Attributes Indicators (1990) (1995) (2005) (2025) (2045) Duration Location Characteristics Notes

Effect Characteristics

Magnitude

tation Date tation Date Date 1 Date 2 Date 3 Other Effects

Start End

Implemen- Implemen- Forecast Forecast Forecast

R1 Ecological Habitat -3 -16 -17 -15 -11 55 years + — —

Pine Valley Long Term

Meadow Deer -3 -49 -43 -31 -15 (starting

Fawns 1990)

Cultural Area of 0 +0.3 +0.6 +1.4 +2.9 — — —

Site

Represent- No change No change No No No 20 years +

ativeness change change change Long Term

Research No change No change No Slight Great

Value change Increase Increase

(start 2025)

Aesthetic Landscape No change Great Moderate Slight Slight 45 years + — The levee would

Priority Decrease Decrease Decrease Decrease Long Term detract from the

(starting natural look of

1995) the meadow

even after

revegetation

R2

Pine Creek
134

Appendix A—Table 8. Determinations of Effects Significance For PlanA .

Resources E Attributes Indicators Recognition Recognition Recognition (yes/no)

Significant

Institutional Public Technical Significant Effect Notes

R1 Ecological Habitat yes

Pine Valley 40 CFR Pine Creek Wildlife State & Federal

Meadow Deer Fawns 1508.27(b) (3) Club States the Wildlife Biologists yes

(Ecologically Deer Population Recognize That

Critical Areas) will Decrease the Project Will

Decrease Habitat

Below Threshold

Levels

Cultural Area of Site yes

Representative- 1508.27(b) (8) & Preservation Characteristics no

ness (10) (Loss of Officer Supports Saved

Research Value and Loss of

40 CFR State Historic Site & Associated

Historic Resource Protecting the Site yes

Historic Site)

Aesthetic Landscape Priority None Community None yes

Groups Support

Saving the Area

from Erosion, but

want Plantings

made on the Levee

to Compensate

For loss of

Aesthetic Values

R2

Pine Creek
135

Appendix A—Table 9. Appraisals of Effects (Indicators) For PlanA .

Resources E Attributes Indicators (1990) (1995) 1 (2005) 2 (2025) 3 (2045)

Appraisals (beneficial/adverse)

tation Date tation Date Forecast Date Forecast Date Forecast Date Notes

Start End

Implemen- ImplemenR1 Ecological Habitat Adverse Adverse Adverse Adverse Adverse

Pine Valley

Meadow Deer Fawns Adverse Adverse Adverse Adverse Adverse

Cultural Area of Site No change Beneficial Beneficial Beneficial Beneficial

Representat- No change No change No change No change No change

iveness

Research Value No change No change No change Beneficial Beneficial

Aesthetic Landscape No change Adverse Adverse Adverse Adverse

Priority

R2

Pine Creek
136

Appendix A—Table 10. Appraisals of Effects (EQ Attributes) for PlanA .

Resources Attributes Table 7) Factors 8) 8) 8) Factors table)

E location; see Table 9) Quality (see Table (see Table (see Table Other EQ Effects Notes

Appraisal Considerations Appraisal

Description Appraisal Judgment

(magnitude, (Beneficial/Adv Institutional Public Technical (also enter

duration, erse; see Quantity/ Factors Factors Factors in significant

R1 Ecological Major Loss of Adverse For All Quantity & Destruction Opposed by Habitat & — Adverse- Mitigation

Pine Valley Fawning Area Indicators Quality of of Critical Pine Creek Population Major Loss of Recommended

Meadow Habitat & Ecological Wildlife Club will Drop Deer

Deer Areas Below Fawning Area

Population Threshold

Decreased Levels

Cultural Site Saved Beneficial The State State Area, — BeneficialFrom Loss Due Because Long Quantity of Historic Site Historic Represent- Site Saved

to Erosion Term Losses the Site Saved Preservation ativeness & From

Which Would From Erosion (ac.) is Officer Research Potential

Have Been Are Prevented Saved the Supports Value Saved Loss Due to

Irretrievable Quality is Plan A Erosion

Saved

Aesthetic Site Marred By A Long Term Views Are None Community None — AdverseConstruction of Adverse Effect Degraded Groups Because

Levee, but on Aesthetics Want View of

Major Erosion Occurs, But Restrictions Meadow As A

Is Curtailed Decreases As Placed on Whole is

Vegetation the Project Marred

Covers Levee

R2 Pine

Creek
Appendix B—Relationships Between NEPA Requirements for EIS Contents and These

Procedures

NEPA regulations requirements for EIS contents. Related activities in these procedures.

(40 CFR 1502.10-1502.18)

(a) Cover sheet. (40 CFR 1502.10(a) and 1502.11) ..................... None.

(b) Summary. (40 CFR 1502.10(b) and 1502.12) .......................

 (1) Major conclusions ........................................... Judge net EQ effects activity.

 (2) Areas of controversy ......................................... Significance of EQ resources and attributes.

Determine significant effects activity.

Appraisal of effects on EQ attributes.

 (3) Issues to be resolved ........................................ Significance of EQ resources and attributes.

Determine significant effects activity.

Appraisal of effects on EQ attributes.

(c) Table of contents. (40 CFR 1502.10(c)) ........................... None.

(d) Purpose of and need for action. (40 CFR 1502.10(d) and None.

1502.13).

(e) Alternatives including proposed action. (40 CFR 1502.10(e) and 1502.14).

 (1) Present effects in comparative form ............................. None.

 (2) Explore and evaluate alternatives ............................... Section III, General evaluation requirements.

Section IV, EQ evaluation process.

 (3) Substantial treatment to each alternative considered in detail .......... Detailed definition-and-inventory stage.

Detailed assessment-and-appraisal stage.

 (4) Include alternatives beyond agency jurisdiction .................... None.

 (5) Include no action ........................................... Forecast without-plans conditions activity.

 (6) Identify preferred alternative(s) ................................. None.

 (7) Include mitigation measures ................................... None.

(f) Affected environment. (40 CFR 1502.10(f) and 1502.15) .............. Inventory resources phase.

(g) Environmental consequences. (40 CFR 1502.10(g) and1502.16).

 (1) Effects of alternatives ........................................ Assess effects phase.

Appraise effects phase.

 (2) Unavoidable adverse effects ................................... Appraise effects phase.

 (3) Relationship between local short-term uses of man’s Duration.

environment and maintenance and enhancement of long- Location.

term productivity.

 (4) Irreversible and irretrievable commitments of resources .............. Duration.

 (5) Direct effects .............................................. Forecast without-plans conditions activity.

Forecast with-plan conditions activity.

 (6) Indirect effects ............................................. Forecast without-plans conditions activity.

Forecast with-plan conditions activity.

 (7) Conflicts between the recommended plan (or candidate Institutional recognition.

plans) and land use objectives.

 (8) Energy requirements ........................................ None.

 (9) Natural or depletable resource requirements ...................... Section IV, EQ evaluation process.

 (10) Urban quality, historic and cultural resources ..................... Section IV, EQ evaluation process.

 (11) Mitigation means ........................................... None.

(h) List of preparers. (40 CFR 1502.10(h) and 1502.17) .................. Interdisciplinary planning.

(i) List of agencies, organizations, and individuals to whom copies of the Public involvement.

statement are sent. (40 CFR 1502.10(i)).

(j) Index. (40 CFR 1502.10(j)) ......................................

 

None.

(k) Appendices. (40 CFR 1502.10(k) and 1502.18) ..................... Documentation.

Appendix A, Example documentation formats.