GAO

United States General Accounting Office

Report to Congressional Requesters

July 2000 ARMY CORPS OF

ENGINEERS

An Assessment of the

Draft Environmental

Impact Statement of

the Lower Snake River

Dams

GAO/RCED-00-186

Page 1 GAO/RCED-00-186 Snake River Dam EIS

Contents

Appendixes Appendix I: Description of the Corps’ Analysis for Electricity

Costs, Transportation Costs, and Air Quality 30

Appendix II: Scope and Methodology 35

Appendix III: GAO Contacts and Staff Acknowledgments 37

Tables Table 1: Alternatives Considered Under the Corps’ Snake River EIS 10

Table 2: Annual Electricity System Costs of Breaching the Four

Lower Snake River Dams 18

Table 3: Examples of Concerns Identified in the Corps’

Transportation Analysis 23

Table 4: Additional Emissions From Dam Breaching 24

Figures Figure 1: Map of Columbia Basin and Lower Snake River Dams 7

Figure 2: Lower Granite Dam, Snake River 8

Figure 3: Lower Snake River Barge 21

Abbreviations

BPA Bonneville Power Administration

EPA Environmental Protection Agency

EIS Environmental Impact Statement

ESA Endangered Species Act

GAO General Accounting Office

NEPA National Environmental Policy Act

NMFS National Marine Fisheries Service
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United States General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-284386 Letr

July 24, 2000

The Honorable Slade Gorton

Chairman, Subcommittee on Interior

and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Gordon Smith

Chairman, Subcommittee on Water and Power

Committee on Energy and Natural Resources

United States Senate

Hydropower dams on the Columbia River and its main tributary, the Snake

River, provide electric power, inland navigation, irrigation, flood control,

and recreation to the Pacific Northwest region. The Columbia and Snake

rivers and their tributaries are also home to salmon and steelhead that each

year migrate from the Pacific Ocean to spawn in fresh water before dying.

As juveniles, their young later swim back downstream to the ocean, before

eventually repeating the cycle. These salmon were once abundant but have

dwindled from up to 16 million a century ago to less than 1 million today.

Federal agencies—the Corps of Engineers, Forest Service, Fish and

Wildlife Service, Bureau of Reclamation, and Bureau of Land

Management—and electricity ratepayers, through the Bonneville Power

Administration, are spending about $400 million annually in the region to

reverse this decline. The decline has been attributed to many causes,

among them overfishing, destruction of habitat, the introduction of

hatchery-bred fish, and the presence of hydropower dams. The dams

restrict the passage of salmon returning to spawn and may be especially

harmful to juvenile salmon as they migrate downstream.

The precipitous decline of salmon has caused the National Marine

Fisheries Service (within the Department of Commerce), the agency

charged with protecting marine species, to list four different species of

salmon and steelhead native to the Snake River as endangered or

threatened under the Endangered Species Act (ESA). That act requires

federal agencies whose actions affect the survival of endangered or

threatened (listed) species to manage their activities to avert the species’

extinction. In response, the U.S. Army Corps of Engineers, which operates

four hydropower dams on the Lower Snake River, began a feasibility study
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in 1995 of how to improve migration conditions for juvenile salmon. The

Corps is evaluating four alternatives, one of which involves breaching four

dams (removing the earthen portion of the dams and allowing the river to

course around the remaining concrete structures). The other alternatives

are to (1) maintain current operations, (2) increase the transportation of

juvenile salmon around the dams, or (3) make improvements to the dams’

systems for collecting juvenile salmon and barging or trucking them past

the dams. Because substantial changes in the dams’ operations could have

significant environmental consequences, the Corps must also adhere to the

National Environmental Policy Act (NEPA) and prepare an environmental

impact statement—or EIS—as part of the feasibility study.1 NEPA’s

guidelines provide a roadmap for decision-making in cases where major

federal actions may have environmental consequences, such as significant

changes in dam operations. Breaching the dams is the alternative that

would have the greatest impact on the region and is highly contentious. It

could help salmon, but it would also eliminate a source of hydroelectric

power and a waterway for barge transportation to ports 140 miles

upstream.

In December 1999, the Corps released its draft EIS assessing the biological,

environmental, economic, and social consequences of breaching the four

dams, as well as three other alternatives. The draft EIS made no

recommendations about which alternative to adopt, as directed by the

Assistant Secretary of the Army, who wanted the region to consider the

issues addressed in the draft EIS in light of other regional recovery efforts.

The Corps is now considering thousands of public comments; the final EIS

is not expected until 2001 and will include a recommendation. If breaching

were recommended, the Congress would have to authorize and fund the

dams’ deconstruction. Concerned whether the Corps’ EIS adequately

considered the economic and environmental effects of breaching the dams,

you asked us to determine the following:

• the extent to which the Corps followed applicable procedures and

guidelines in preparing the draft EIS and

• the reasonableness of the methodology the Corps used to analyze and

present the effects of breaching, specifically with respect to electricity

costs, transportation costs, and air quality.

1 Hereafter, for ease of presentation, the Corps’ study and draft report, Lower Snake River

Juvenile Salmon Migration Feasibility Report/Environmental Impact Statement, will be

referred to as the EIS.
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As agreed with your offices, we reviewed the content, analysis, and

conclusions of the Corps’ draft EIS for the effects on electricity,

transportation, and air quality. We did not review other aspects of the draft

EIS, such as the impact of breaching on salmon recovery, water quality, or

recreation effects and, therefore, we cannot comment on the adequacy of

the entire draft EIS or which alternative the Corps should eventually

recommend. To determine the reasonableness of the Corps’ analysis and

presentation of the effect of breaching on electricity costs, transportation

costs, and air quality, we reviewed the draft EIS and appendixes, underlying

technical reports and analysis, expert reviews, and public comments. We

also met with the principal analysts and other participants in the EIS

process, other stakeholders, and outside experts to obtain their views.

Results in Brief The Corps generally adhered to the procedural requirements of the

National Environmental Policy Act, the Endangered Species Act, and other

relevant guidelines in preparing the EIS. As required by NEPA, the Corps

coordinated with other federal agencies and affected stakeholders,

obtained comments from other agencies and the public, and reported on

the environmental impacts of proposed alternatives. Similarly, the Corps

followed the procedural requirements of ESA, which required the Corps to

consult with the National Marine Fisheries Service and the Fish and

Wildlife Service. The scope of the Corps’ draft EIS is comprehensive, in that

it considers a range of effects, including those on the environment, the

economy, and wildlife. While the Corps’ actions in developing the EIS

appear consistent with procedural requirements, the substance of the

agency’s analyses and conclusions has been challenged. For example, the

Environmental Protection Agency has disagreed strongly with the

adequacy of the Corps’ analyses for both air and water quality.

In our view, the Corps’ analysis and presentation of the effects of breaching

on electricity costs is reasonable; however, we could not determine the

reasonableness of the Corps’ estimated effects on transportation costs and

air quality. The net economic effect on electricity costs, estimated to be

$245 million a year, has been reviewed by various stakeholders and subject

matter experts, as well as by us, and has been found to be reasonable. In

the case of transportation costs, however, some concerns regarding the

Corps’ assumptions make the reasonableness of the transportation

estimate uncertain. For example, the Corps estimated that as much as $532

million in infrastructure would be needed for road, rail, and storage

facilities if barge shipments were discontinued on the Snake River.

However, the Corps assumed that these infrastructure improvements
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would be made without affecting the transportation cost estimate. The

Corps did not sufficiently analyze the validity of this assumption or

measure the sensitivity of the transportation estimate to this assumption.

Likewise, the reasonableness of the Corps’ analysis and presentation is

questionable because of an incomplete analysis of air quality effects,

including the Corps’ failure to consider air quality effects from breaching

on certain local populations, and of the effect of exposing potentially

contaminated river sediments. Corps officials said they did not believe the

level of emissions would pose a significant impact and lacked enough time

or money to study the matter in more detail. The Corps is currently

considering public and agency comments on the draft EIS before revising

it.

Background The entire Columbia River Basin, including the Snake River Basin, drains

over 259,000 square miles of the Pacific Northwest and includes over 150

dams—31 operated by the federal government. The 1,040-mile Snake River

is a major tributary of the Columbia River, the fourth longest river in North

America. The Snake River runs from Yellowstone Park in Wyoming across

southern Idaho to its confluence with the Columbia River in Pasco,

Washington; its basin drains 109,000 square miles. The Corps of Engineers

operates four dams along a 140-mile stretch of the Snake River in

southeastern Washington. The four dams—Ice Harbor, Lower Monumental,

Little Goose, and Lower Granite—were placed in service between 1961 and

1975 to provide hydropower, irrigation, recreation, fish and wildlife, and

upriver navigation as far as Lewiston, Idaho (see fig. 1).
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Figure 1: Map of Columbia Basin and Lower Snake River Dams

The four Lower Snake River dams are very similar. In total, they produce

about 1,250 average megawatts per year, which is about 5 percent of the

Columbia R.

Columbia R

Snake R.

Columbia and

Snake Rivers

Ice 

Harbor

Lower

Monumental

WA

OR

Pasco ID

Lewiston

Little

Goose

Lower

Granite

Columbia R.

Snake R.

Snake R.

Columbia R.

Portland

Seattle
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total energy generated in the Pacific Northwest. The dams do not provide

flood control and provide only limited irrigation. Each of the four dams is

about 100 feet high and between 2,655 and 3,791 feet wide. Each consists of

an earthen embankment that would be removed, and a concrete structure

consisting of the locks, spillway, and powerhouse that would be

mothballed, if the dam is breached (see fig. 2). The Corps has estimated the

total construction cost to breach the four dams to be about $900 million. All

four have fish ladders for upriver migration for salmon returning to spawn

and a bypass system for the downriver migration of juvenile salmon.

Figure 2: Lower Granite Dam, Snake River

Source: Corps of Engineers.

Earthen 

Embankment Spillway

Locks

Powerhouse
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The historic decline of salmon in the Columbia River Basin led to the listing

of Snake River sockeye salmon in 1991 by the National Marine Fisheries

Service (NMFS) as endangered under the ESA.2 The following year, NMFS

listed Snake River spring/summer Chinook salmon and fall Chinook salmon

as threatened.3 As a result of these listings, NMFS issued rulings (called

biological opinions) in 1993 and 1994 that the federal dams in the Columbia

River Basin did not jeopardize the salmon species’ continued existence.

The Idaho Department of Fish and Game challenged the 1993 biological

opinion and, in 1994, a federal court found aspects of the opinions to be

“arbitrary and capricious”.4 After restudying the matter, NMFS issued a new

opinion in 1995 that the dams were likely to jeopardize salmon. As a result,

the Corps began a consultation process with NMFS to identify the options,

including breaching, that should be considered.

In December 1999, after 4 years and $22 million in study costs, the Corps

released the draft EIS, which evaluates alternatives for improving juvenile

salmon’s passage through the Corps’ four Lower Snake River dams. These

four alternatives, winnowed from many other alternatives considered and

rejected during earlier studies, range from maintaining current operations

(base case) to breaching the four dams (see table 1).

2 The ESA defines endangered as any species that is in danger of extinction throughout all or

a significant portion of its range and threatened as any species that is likely to become an

endangered species within the foreseeable future throughout all or a significant portion of

its range.

3 In 1994, the NMFS proposed changing the Snake River Chinook salmon’s status from

threatened to endangered, but in 1998 that proposal was it withdrew that proposal. In 1997,

Snake River Steelhead were also listed as threatened. The Steelheads lifecycle is similar to

salmon’s.

4 Idaho Department of Fish and Game v. National Marine Fisheries Service, 850 F. Supp. 886

(D. Or. 1994).
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Table 1: Alternatives Considered Under the Corps’ Snake River EIS

a

These values represent net changes in the value of the national output of goods and services as

compared to the base case alternative 1 and are presented in 1998 dollars as average annual

amounts over the period 2005 to 2104 discounted at 6.875 percent.

The Corps’ final recommendation for the Snake River EIS will be part of a

comprehensive response to reverse the decline of salmon throughout the

Columbia River Basin. NMFS has also listed eight other salmon and

steelhead stocks in the Columbia River Basin, fish that do not have to pass

through the Snake River dams. Therefore, the Corps and other agencies

with an interest in salmon recovery are seeking to develop a coordinated

and comprehensive response for the entire Columbia River Basin. NMFS is

expected to release its 2000 biological opinion for the operation of all

federal dams in the Columbia River Basin later this year. The Corps’

eventual decision regarding the Snake River EIS has also become the focus

of media attention, and organized campaigns both for and against dam

breaching have generated considerable interest in the issue.

Development of Corps’

Draft EIS Followed

Procedural Requirements

and Guidelines

The Corps of Engineers generally followed procedural requirements and

guidelines in developing its draft EIS. Procedural requirements for the

development of an EIS are contained in NEPA and accompanying

regulations. NEPA provides a framework for decision-making in cases

where major federal actions may have environmental consequences. In

addition, in accordance with the ESA, the Corps consulted with NMFS and

Dollars in millions

Alternative Description

Annual net

economic

effecta

1. Existing

conditions

Maintain the existing hydrosystem operations. None

2. Maximum

transport of

juvenile salmon

Maintain the existing hydrosystem operations with

maximum transportation of juvenile salmon around

the dams but without improving systems that collect

the juvenile salmon for barging or trucking them

past the dams.

$14.1

3. Major system

improvements

Improve the existing systems for collecting juvenile

salmon for transportation by barge or truck

downstream past the dams.

$4.8

4. Dam

breaching

Remove the dams’ earthen embankments to draw

down the four Lower Snake River reservoirs to

create a free-flowing 140-mile stretch of river.

($246.5)
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the Fish and Wildlife Service in developing biological information on the

impact of the dams on salmon survival. While the Corps adhered to these

broad requirements and guidelines in preparing its draft EIS, the substance

of its analyses and conclusions, specifically regarding water and local air

quality, has been challenged by the Environmental Protection Agency

(EPA) and others.

Corps’ Procedures in Line

With NEPA’s Broad

Guidance

Under NEPA regulations, federal agencies are required to compile and

develop accurate scientific information on a range of alternatives, obtain

expert advice from other agencies, and allow public comment on the

alternatives before making decisions with environmental consequences.

NEPA lays out a general process for achieving these goals but leaves

agencies with considerable latitude in deciding exactly how to develop an

EIS.

While NEPA does not dictate the scope of an EIS, the scope of the Corps’

draft EIS is substantial. The geographic scope of the draft EIS generally

focuses on the 140-mile long stretch of the Lower Snake River between

Lewiston, Idaho, and the Tri-Cities area (Pasco, Richland, and Kennewick)

in southeastern Washington. Within this area, the draft EIS examines the

impact of each of the four alternatives across a comprehensive range of

possible effects, including

• migratory and resident fish (biological analysis of salmon and

steelhead);

• electric power generation and facilities;

• transportation via navigation, railroads, and highways ;

• air quality;

• water quality and hydrology;

• geology and soils;

• vegetation, wildlife, and protected species;

• cultural resources;

• Native American Indian harvest and land use;

• water uses by agriculture, municipalities, and industry ;

• land ownership and uses;

• recreation and tourism;

• regional demographics, employment, communities, and low-income and

minority populations;

• aesthetics, such as landscape characteristics; and

• cumulative effects.
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The Corps’ procedures for preparing the draft EIS were consistent with

NEPA and the agency’s implementing guidance. In accordance with NEPA’s

requirements, the Corps has involved other federal agencies, affected

stakeholders, and the general public. The following represents examples of

actions taken:

• Involvement of other federal agencies. The Corps, as lead agency,

formally involved the Bonneville Power Authority (BPA), EPA, and the

Bureau of Reclamation as “cooperating agencies,” because they have

legal jurisdiction over some aspect of the draft EIS. These agencies

helped the Corps scope and develop the draft EIS. Other federal

agencies—notably NMFS, which prepared the biological analysis of

salmon impacts, and the U.S. Fish and Wildlife Service, which assessed

the impact on other species—also contributed to sections of the EIS or

commented on them.

• Consultation with affected Indian tribes. The Corps identified 14

tribes potentially affected by its proposed actions and discussed the EIS

process with them. The Corps also contracted with a tribal

representative to assess tribal rights and circumstances for inclusion in

the draft EIS.

• Involvement by other stakeholders and the public. The Corps held

numerous workshops and community forums, developed technical

workgroups, and held a series of 15 public hearings throughout the

Pacific Northwest region. The Corps’ workgroups involved outside

stakeholders possessing diverse views on the alternatives under

consideration. The Corps also made the draft EIS and underlying

information available to the public through the Internet. The Corps has

received more than 200,000 public and agency comments on the draft

EIS, which were the result of the public hearings and organized

campaigns both for and against dam breaching.

• Outside technical review. The Corps invited outside technical review

of the biological, engineering, and economic analyses. The biological

analyses were reviewed by the Independent Scientific Advisory Board, a

body of scientists under the auspices of the Northwest Power Planning

Council (Council). Outside engineers reviewed technical aspects of the

Corps’ engineering study and found the Corps’ analysis, including

assumptions, methods, and procedures, to be appropriate. In addition,

the draft EIS’ economic analysis was reviewed by the Independent

Economic Analysis Board, a group of independent regional economists

also under the auspices of the Council.
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The absence of a recommended alternative in the draft EIS has been a

concern expressed in several comments. NEPA does not require agencies

to specify a preferred alternative in a draft EIS.5 According to the Deputy

Commander of the Corps’ Northwestern Division, the Corps’ Walla Walla

District Office, which is managing the EIS, initially intended to recommend

alternative 3 (major system improvements). When the Northwestern

Division forwarded the draft EIS for headquarters’ review, however, the

Assistant Secretary of the Army for Civil Works ordered the removal of a

preferred alternative. The Assistant Secretary’s letter to the Corps

explained that it was important for all affected parties to consider the

issues and information in the draft EIS within the broader context of

information being developed for other regional recovery efforts. Among

these other recovery efforts is NMFS’ preparation of a new biological

opinion for the Federal Columbia River Power System, to be issued later

this year. It is not unusual that a draft EIS would be issued without a

preferred alternative. For example, the draft EIS prepared by the Corps,

BPA, and Bureau of Reclamation concerning the operation of the federal

power system in the Columbia River Basin was issued in 1995 without a

preferred alternative, in part, because the agencies were waiting for NMFS’

1995 Biological Opinion.6

5 Army regulations in effect since 1980 permit a draft EIS to be issued with no preferred

alternative specified. 32 C.F.R. Parts 650, 651 Appendix D, paragraph 5.

6 Columbia River System Operation Review, Final Environmental Impact Statement, U.S.

Army Corps of Engineers, Nov. 1995.
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Draft EIS Satisfies the

Procedural Requirements of

the ESA and Other Relevant

Guidelines

The Corps’ preparation of the draft EIS also complied with the procedures

outlined in the ESA and with other relevant guidance for considering the

economic effects of the proposed alternatives. The ESA requires federal

agencies whose activities are likely to jeopardize the continued existence

of listed marine species to consult with NMFS to avert the species’

extinction. Agencies do this by preparing a biological assessment of their

activities’ impact on the listed species. NMFS then responds with a

biological opinion that identifies reasonable and prudent alternatives the

agency needs to follow to avoid jeopardizing the listed species or to

minimize the impact of its actions on the species. In general, if an agency

chooses not to implement a reasonable and prudent alternative, it must

seek an exemption from the requirement to avoid jeopardy.7

For Lower Snake River salmon, NMFS’ 1995 Biological Opinion, which

found jeopardy from dam operations, reopened the consultation process

between NMFS and the Corps. The Corps and the NMFS coordinated the

preparation of the draft EIS, and NMFS drafted the EIS’ biological study of

the four alternatives’ effect on marine species. The Corps, in tandem with

BPA and the Bureau of Reclamation, also submitted in December 1999 a

multispecies biological assessment of the Federal Columbia River Power

System, including an assessment of the Lower Snake River dams’ effect on

salmon.

7 Corps legal officials expressed the concern that if the biological opinion recommends dam

breaching as the reasonable and prudent alternative to conserve listed Snake River salmon,

the Corps would not be able to implement that recommendation consistent with its current

statutory authority. Because removing an existing dam would require statutory

authorization and funding, legislative action would be required before that recommended

alternative could be carried out. It is not clear whether an exemption would be required in

such a case.
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To assess the economic effects of the alternatives, the Corps followed the

Water Resources Council’s Economic and Environmental Principles for

Water and Related Land Resources Implementation Studies (1983), which

specifies guidelines for evaluating national and regional economic effects.

The Principles provides a standardized approach for assessing and

presenting the costs and benefits of water projects. The Corps generally

adhered to the requirements of the Principles—for example, presenting

economic effects in terms of changes in the national output of goods and

services, discounted and on an annual basis. The draft EIS also presents

regional economic effects on income, employment, and population, as

recommended by the Principles.

8

Compliance With

Procedural Requirements

Has Not Eliminated

Controversy About the Draft

EIS’ Analysis or

Conclusions

Although the draft EIS followed broad procedural requirements, it has been

challenged by other agencies and affected parties that disagree with the

analysis or conclusions. EPA is the most noteworthy of these critics

because of its responsibilities under NEPA and the Clean Air Act.9 In

comments provided to the Corps in April 2000, EPA rated the draft EIS as

inadequate because the draft EIS did not adequately assess potentially

significant impacts on water and air quality. EPA faulted the Corps’ analysis

of the dams’ effect on water temperature and the amount of dissolved gas

the dams produce.10 EPA also faulted the draft EIS’ failure to provide a

strategy for complying with water quality standards or to estimate the costs

to meet water quality standards under alternatives 1 through 3. In addition,

EPA does not consider the draft EIS’ assessment of the air quality effects of

breaching to be adequate. EPA and the Corps have discussed their

differences in hopes of resolving them, but if the discussions are not

successful, the EIS will be referred to the President’s Council on

Environmental Quality for final resolution.

8 Breaching may also have regional effects on income, employment, and population. The

Corps’ study includes regional economic impact analysis. The Corps’ regional impact

analysis uses the estimated national economic effects to determine regional effects on

spending, income, and employment. We did not assess these regional impacts in our review.

9 Section 309 of the Clean Air Act directs the EPA to review and comment in writing on the

environmental impacts associated with major federal actions. EPA has the authority to refer

an EIS to the Council on Environmental Quality for further review. 40 C.F.R. 1504.1 (1999).

10 The issue of the Corps’ compliance with water quality standards for temperature and

dissolved gas is currently in litigation. National Wildlife Federation v. U.S. Army Corps of

Engineers, No. 99-442 FR (D. Or., Mar. 21, 2000) (cross motions for summary judgement

denied).
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Corps’ Analyses of

Electricity,

Transportation and Air

Quality Vary in Quality

The Corps’ analysis and presentation of the effects of breaching on

electricity costs is reasonable; but its transportation cost estimate and its

air quality analysis are insufficiently developed to determine whether they

are reasonable. Breaching the dams would mean losing hydroelectric

power generated by these dams as well as shipping on the Lower Snake

River. The Corps adhered to guidelines and accepted practices in

developing the electricity cost estimates, and independent reviewers and

outside stakeholders are generally satisfied with the approaches used.

While we identified some concerns with the electricity cost estimates, they

would not have a material effect on the Corps’ estimates. The Corps’

transportation analysis also followed appropriate guidelines but did not

fully consider the effect of some of its assumptions and has not corrected

some known errors. Finally, breaching would also affect air quality by

increasing dust in the air and adding airborne pollutants from substitute

sources of power and transportation. The Corps’ analysis estimated the

total increase in emissions from these sources, but not how they might

affect local populations.

Estimated Effects on

Electricity Costs Are

Reasonable

The Corps’ estimates of the costs associated with losing hydropower from

the four dams are reasonable and are supported by multiple analyses and

outside reviewers. The Corps generally adhered to accepted guidelines,

economic principles, industry practices, data sources, and modeling

techniques. The process was also open to public participation, and

stakeholders representing widely divergent views on the future of the dams

generally were satisfied with both the process and quality of the estimates.

The four dams on the Lower Snake River all generate hydroelectric power

and currently account for about 5 percent of the total annual power

production in the Pacific Northwest.11 Collectively, their average annual

production is enough to power a city of 700,000. The electricity they

produce is marketed by BPA, mainly on a wholesale basis to public and

investor-owned utilities. These utilities, in turn, resell the electricity to

retail customers primarily in western North America.

11 The four dams collectively account for about 7 percent of the Pacific Northwest’s

“installed production capacity”—the maximum sustained amount of power that can be

produced by a plant measured at a moment in time. However, they account for a somewhat

smaller portion of average production.
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Breaching Would Increase

Electricity Costs by an Estimated

$245 Million Annually

Breaching the four dams on the Lower Snake River would raise the net cost

of electric power supplies in the western United States by $245 million

annually (see table 2). According to the draft EIS, this could increase the

average electricity bill for households in the Pacific Northwest by $1.20 to

$6.50 per month, while large users, such as aluminum companies, could see

monthly increases approaching $1 million. These rate increases assume

that BPA is able to recover increased power system costs from its

customers. However, the draft EIS also notes that if the electric industry

becomes more competitive, BPA may not be able to raise rates to recover

higher costs. The largest effect of breaching would be replacing the lost

hydropower production, primarily with new gas-fired power plants. The

draft EIS reported that breaching the four dams would raise the cost of

meeting demand for electricity in the western United States by $217 million

to $260 million annually, depending on future conditions and the method of

estimation, with $238 million per year as a midpoint estimate.12 Breaching

the dams will also require modifying the electric power transmission

system that moves bulk power throughout western North America, adding

an average of $25 million per year to the electricity costs. The replacement

power sources would also have less operating flexibility, which also has an

associated cost. Changing the amount of electricity produced at

hydroelectric plants is relatively easy and inexpensive, making them highly

valued for their ability to provide “peaking” and “ancillary”services.13 The

draft EIS estimates an $8 million loss in value of ancillary services as a

result of breaching the dams. However, these cost increases would be

partially offset by reductions in operating and capital expenses if the dams

were no longer operating. These “avoided costs” are estimated at $26

million per year. Therefore, the net increase in costs after including these

avoided costs is about $245 million annually.

12 The power impact estimates assume that current dam operations (base case) result in

electric power output from the four Lower Snake River dams averaging about 1,250

megawatts per year. However, this assumption does not take into consideration additional

constraints on hydropower operations of the dams resulting from NMFS’ 1998 Biological

Opinion. According to the Northwest Power Planning Council’s analysis, these additional

constraints are likely to reduce power output by about 5 percent. Such a change in power

production from the four dams is not likely to have a significant effect on the power cost

estimates. In addition, NMFS officials told us that the new biological opinion will further

constrain hydropower operations and reduce the power cost estimate.

13 Peaking refers to the ability to provide power at times of relatively high levels of demand.

Ancillary services are defined as those services that are necessary to support the

transmission of power from power plants to customers while maintaining the reliable

operation of the transmission system in accordance with good utility practice.
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Table 2: Annual Electricity System Costs of Breaching the Four Lower Snake River

Dams

a

Total avoided costs are allocated 90 percent to hydropower and 10 percent to transportation, in

keeping with the purposes specified in the dams’ original authorizing statutes.

Estimates Are Supported by

Multiple Analyses

The power system cost estimates are supported by multiple analyses that

yielded similar results. Three different organizations—the Corps, BPA, and

the Council—conducted parts of the analysis, using different approaches to

estimate the impact of breaching the four dams on the cost of electric

power supplies (see app. I).14 The organizations recognized that the

estimates are highly dependent on future conditions, such as changes in

water flows, growth in the demand for electricity, fuel prices, and changes

in the efficiency and costs of power plants. The analyses considered such

effects and reported a range of cost estimates. The major difference in the

approaches are that the Corps and BPA used an approach based on

estimating the costs of meeting electric power demand, while the Council

used an approach based on estimating the forecast market prices for

electricity. However, both the cost approach employed by the Corps and

BPA, and the market value approach employed by the Council are

consistent with the Water Resources Council’s Principles.

Stakeholders and Reviewers

Were Generally Satisfied With

the Electricity Cost Estimates

The Corps’ electricity cost estimate resulted from an open process with

active participation by stakeholders representing a spectrum of views on

the question of the dams. The results of the analysis generally met with the

approval of these stakeholders. The planning and design of the electricity

Dollars in millions

Cost category Annual costs

Replacement power $238

Transmission costs 25

Ancillary value losses 8

Total power system costs $271

Avoided operating and capital costsa (26)

Net power costs $245

14The Corps’ and the Council’s analyses spanned the interconnected western power system,

which comprises all or part of 14 western states, two Canadian provinces, and northern

Mexico, while BPA’s analysis was limited to the Pacific Northwest and California. All three

made forecasts for 100 years, starting with 2005, and used similar assumptions regarding the

future growth in demand for electricity.
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cost estimate was part of an open process, with the active participation of

widely divergent groups, such as environmentalists, Native Americans, and

other advocates of free-flowing rivers, as well as industrial users that are

heavily dependent on inexpensive hydropower from dams. Each of these

groups participated on the team that developed and reviewed the initial

estimates. Representatives of these groups with whom we spoke were

generally satisfied with both the process followed and the quality of the

cost estimates. The Council’s Independent Economic Analysis Board also

reviewed the Corps’ methodology and analysis. The Board found that the

Corps used sophisticated models and accepted methods and that the

results can be relied on as a reasonable representation of the economic

effects.

Identified Concerns Are Not

Material to the Results

There are two concerns with the cost estimation and presentation of the

effect of breaching on power costs, but these are not material to the Corps’

estimate. The primary shortcoming with the power estimate is that it

assumes that the demand for power will not be affected by higher rates

charged for electricity.15 An earlier study developed by the Corps, BPA, and

the Bureau of Reclamation reported that a rate increase necessary to cover

increased costs for replacement power would reduce the demand for

electricity. The resulting drop in demand could reduce the electricity cost

estimates associated with breaching by less than 10 percent because less

replacement power would be needed. However, Corps, BPA, and Council

officials told us that they did not model the relationship between electricity

rates and the demand for electricity because it would have required

considerable cost and effort without having a significant effect on the

results.

The second concern is presentational. The draft EIS does not clearly show

the net estimate of the $245 million discussed above. Avoided costs were

excluded from the draft EIS’ estimate of the increased power system costs

that would result from breaching the dams. Avoided costs are the operation

and maintenance costs, including the cost to collect and transport juvenile

salmon past the dams, and future capital costs associated with the dams

and their powerhouses. These costs would be saved if the dams are no

longer operational. While the draft EIS’ annual estimate of $29 million for

15 The Corps’ draft EIS assumes zero price elasticity of demand. Price elasticity of demand is

the relative change in quantity demanded divided by the relative change in price. In this

case, zero price elasticity of demand means that a rate increase will not change the quantity

demand.
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total avoided costs appears reasonable, this estimate is presented in a

separate section of the EIS and is not reported in relation to the electricity

analysis. According to the Corps’ estimate, about 90 percent of the avoided

costs at these four dams are attributable to electricity generation.

Therefore, if the dams are breached, about $26 million of avoided costs

would be saved.16 By not linking these savings to electricity costs, the draft

EIS conveys a greater effect on electricity costs than may actually occur.

Corps officials said that the overall net cost for all economic effects is more

important than understanding the net power system costs and that is why

they presented avoided costs as a single amount.

Transportation Cost

Estimate Needs Further

Development

The draft EIS’ overall approach to computing the costs of breaching the

dams on the current river transportation system is generally reasonable.

However, the Corps’ analysis and presentation did not fully consider the

effect of changes in some key but uncertain assumptions. Furthermore, the

Corps did not correct for certain errors in its data. We could not determine

whether further investigation of the validity of its assumptions and

correcting the known errors would materially affect the Corps’ final

estimate.

Each of the four dams has a lock system, creating a river navigable to barge

traffic for 140 miles from near Pasco, Washington, to Lewiston, Idaho.17

Barge traffic originating on the Snake River largely carries agricultural

goods to ports in and around Portland, Oregon, for export overseas (see fig.

3). Generally, barging is the least costly mode of transportation for bulk

commodities. From 1987 to 1996, barges transported an average of about 4

million tons annually on the Snake River. About 77 percent of this total was

grain; 18 percent, wood chips and logs; and 5 percent, petroleum and other

products. About 96 percent of all shipments are moving downriver, with

most barges returning empty. If the dams are breached, barge shipments on

the Snake River will end because the river will be too shallow.

Commodities will then have to be shipped via rail or trucked to ports on the

Columbia River.

16 This $26 million is shown in our earlier presentation of the power system’s annual costs

and is the amount that reduces the costs from $271 million per year, as shown in the Corps’

draft EIS, to the net amount of $245 million per year (see table 4).

17 From Lewiston downstream to the Pacific Ocean, the waterway is 465 miles.
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Figure 3: Lower Snake River Barge

Source: Corps of Engineers.

Annual Net Cost Is Estimated to

Be About $21 Million

As computed in the draft EIS, the estimated net increase in shipping costs

for all commodities if the dams are breached is $21 million per year over

100 years, less than 10 percent of the net economic effect of breaching

estimated by the Corps. Shipping costs of $24 million would be offset by

reductions of about $3 million per year, which represents the portion of

avoided costs of operating and maintaining the dams allocated to

transportation. Of the total increase in shipping costs, about $20 million per

year is associated with grain shipments and $4 million per year with

nongrain commodities. According to the draft EIS, this equates to an

average cost increase by 2007 of about $0.17 per bushel of grain shipped

and about $3.78 per ton for other commodities—an increase of 18 and 5

percent, respectively.

Corps’ Transportation Analysis Is

Generally Valid, but Some

Assumptions Are Questionable

To estimate the additional costs of shipping if the dams are breached, the

Corps modeled the cost to ship grain both under current conditions and

without barge shipments on the Lower Snake River. This required the

Corps to estimate the future growth in grain and other shipments, model

transportation patterns with or without the dams, and estimate shipping

costs under the current approach and under the least-cost alternative if
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barging is no longer available. (See app. I for more details on the Corps

modeling approach.) Except for its treatment of uncertainty, the Corps’

approach generally conforms to the Water Resources Council’s Principles

for estimating economic effects.

Several reviewers and stakeholders question the Corps’ assumption that

making the infrastructure improvements necessary to replace barge

transportation would not add to the transportation cost estimate. The draft

EIS estimates that the infrastructure improvements—including such things

as new grain elevators farther downstream on the Columbia River, highway

improvements, new rail cars, and track improvements—needed to replace

barge transportation will cost between $207 million and $532 million.

However, the draft EIS assumes that these infrastructure improvements

can be absorbed by the transportation sector without affecting their longrun costs. Several stakeholders contend, however, that making these

improvements will increase transportation costs, perhaps significantly. In

addition, in reviewing the draft EIS, the Washington State Department of

Transportation commented that the infrastructure estimates used by the

Corps are incomplete because all necessary highway improvements have

not been identified. The Independent Economic Analysis Board, a group of

independent regional economists that reviewed the Corps’ economic

analysis, generally supported the Corps’ overall methodology but

commented that the analysis had not been adequately tested for the impact

of increased infrastructure costs. The Board stated that making

infrastructure investments could increase the cost of breaching but also

suggested that some offsetting cost savings may result from better railroad

utilization and technological improvements. The Board concluded that,

because of this uncertainty, the Corps should analyze the data to see how

sensitive the model results are to the changes in the cost of infrastructure

improvements.

Another uncertainty arises from the Corps’ assumption that estimated

shipping costs provide a better estimate of actual costs than do published

shipping rates. The Water Resources Council’s Principles recommends

using published rates to estimate transportation costs unless these rates

are not competitively established. Corps officials stated that published

rates were not used because barge operators have limited competition and

can charge higher than competitive rates. Barge representatives told us

that their rates are competitive and have been used in other studies of

Columbia and Snake River shipping. The Corps did not test the sensitivity

of its transportation cost estimate to using published rates instead of

estimated costs.
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Other Concerns About the Corps’

Estimates

In addition to the uncertainty created by certain assumptions, other

concerns affect the Corps’ analysis and presentation of transportation

costs. The effect of these concerns on the Corps’ transportation estimate is

not fully known. Table 3 lists three other concerns with the current

estimate and the potential impact of those concerns.

Table 3: Examples of Concerns Identified in the Corps’ Transportation Analysis

In addition to the concerns discussed above, the Corps’ draft EIS does not

present a net transportation estimate. Instead, as with the hydropower

estimate, the $3 million estimate of savings in the current cost of operation

and maintenance of the locks is presented in a separate section of the draft

EIS.

Estimated Effects on Air

Quality Are Indeterminate

The Corps’ air quality analysis is indeterminate because it did not assess

how local air quality or human health would be affected if the dams are

breached and did not consider the effects of all relevant pollutants. EPA

considers the draft EIS to be inadequate, in part, because of its incomplete

air quality analysis. EPA is charged under NEPA and the Clean Air Act with

reviewing and commenting on all environmental impacts of federal

activities. EPA also regulates air quality standards established under the

Area of concern Description Expected effect on estimate

Shipping forecasts Projected shipping volume may be overstated. The Corps

developed its estimate of shipping volume for grain and other

commodities on the basis of the historical average for 1987 to

1996. The Corps is projecting continued shipping growth up

through 2017—an overall increase of 26 percent from the

historic average. However, the draft EIS acknowledges that

1997 shipping volumes, the most recent year analyzed, are

20 percent less than in 1996.

If projected quantities to be shipped are

overstated, then the effect of breaching on

shipping costs is overestimated.

Model bias The Corps adjusted its model results to eliminate instances

where the model estimates that shipping without barges is

less costly than shipping with barges. The Independent

Economic Analysis Board stated that the Corps should not

have made these adjustments.

The Corps reports that these model adjustments

add $800,000 annually to the transportation cost

estimate as a result of breaching.

Uncorrected errors The Corps’ model contains some errors in the costs of

handling and shipping grain for some locations. The results

have not been recalculated with the errors corrected.

Because these errors are fairly consistent

between current conditions and breaching, the

difference between the two scenarios is not likely

to change significantly if the model results are

recalculated. However, they substantially increase

the total shipping revenues.
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Clean Air Act.18 If EPA’s concerns are not satisfactorily addressed, it can

refer the EIS to the Council on Environmental Quality for further review.

The draft EIS’ air quality analysis estimated the gross increase in air

emissions resulting from replacement power generation, increased truck

and rail transportation, and airborne dust for the entire region. The Corps

concluded that the combination of these air quality components would not

have a significant regional effect. However, the Corps did not examine

certain pollutants, such as chemicals in the reservoir sediments. The Corps

also assumed the emissions that were studied would be equally distributed

across the region, instead of being concentrated in specific locations,

possibly impairing local air quality and human health. To identify these

more localized effects, EPA has requested that the Corps complete a more

thorough analysis.

Corps Estimated Increase in

Emissions of Selected Pollutants

The Corps’ draft EIS reported that breaching the dams would have some

effects on air quality during the breaching process, as well as from changes

in the river level and transportation and power generation practices after

the dams are breached. For example, as shown in table 4, the draft EIS

reports that replacement power generation would increase emissions of

carbon monoxide and carbon dioxide, while deconstruction and the

exposed river sediment would contribute to an increase in particulate

matter.

Table 4: Additional Emissions From Dam Breaching

a

Particulate matter refers to solid and liquid particles in the air. Sources include burning and airborne

dust. Particulate matter is very small and, if breathed into the lungs, causes health problems.

18 EPA has established fixed standards for particulate matter, ozone, nitrogen dioxide, sulfur

dioxide, carbon monoxide, and lead. In addition, another 188 hazardous air pollutants

known or suspected to cause cancer or other serious health effects are controlled.

Tons per year

Source

Carbon

monoxide Carbon dioxide

Nitrogen

dioxide

Particulate

mattera Sulfur dioxide

Volatile organic

compoundsb

Demolition 304

Transportation (15) (20) 9 (71) 90

Windblown dust 6,292

Power generation 4,134 4,186,804 174 196 1,813 2

Total change 4,119 4,186,804 154 6,801 1,742 92
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b

Volatile organic compounds are chemicals containing hydrogen and carbon that are produced by

burning fossil fuels. In the presence of sunlight, volatile organic compounds react to form ground-level

ozone, a component of smog.

Source: Corps of Engineers Environmental Impact Statement, Table 5.2-6.

The Corps’ air quality assessment estimated emissions from four potential

sources. First, the Corps used emission equations from EPA to estimate the

amount of dust produced by deconstruction. Second, the Corps computed

average emissions for the trucks and trains that would replace barge

transportation. Third, the Corps estimated windblown dust from the

exposed sediments using wind data and an EPA methodology for predicting

the amount of particulate matter resulting from wind erosion. And, fourth,

the Corps estimated the emissions from replacement electricity, primarily

from new gas-fired power plants. Emissions from each of these sources

were then totaled across the region (see app. I).

Air Quality Assessment Is

Incomplete

The Corps’ air quality assessment was incomplete because it did not

consider the impact of breaching on local air quality and human health, and

because it omitted from study certain pollutants, such as chemical

contaminants in reservoir sediments, that would be exposed as a result of

breaching. In some cases, the Corps compared the changes in emissions

across a wide geographic area but did not consider concentrated local

impacts. For example, the draft EIS estimated that the loss of barge

transportation would lead to a decrease in total emissions from carbon

monoxide, nitrogen dioxide, and sulfur dioxide. However, this summary

view masks increased emissions from grain-hauling trucks likely to occur

in certain areas of eastern Washington State. According to the draft EIS, the

elimination of barging is expected to result in an additional 223 trucks per

day and their accompanying emissions in the Tri-Cities area.

The Corps’ air quality analysis did not adequately identify the following

effects on local communities from each of the pollution source areas if the

dams are breached and did not study certain pollutants that would be

released:

• Deconstruction. Airborne emissions from deconstruction were not

calculated for specific locations that are near the dams and thus most

likely to be affected. In addition, the Corps did not consider vehicle

engine, tire, and brake emissions from construction equipment. EPA

stated that modeling or some alternative techniques are needed to

determine the effects of these emissions.

• Loss of barge transportation. Emissions from increased use of trucks

and trains instead of barges were not adequately assessed for specific
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localities. Such an analysis should also look at the potential effect on

human health. EPA has also commented that vehicle emission modeling

is needed to adequately assess the effect of changes in vehicle

movements on specific locations. In addition, EPA and BPA commented

that the draft EIS should present a range of potential emissions rather

than merely averaging the results of two different studies.

• Exposed sediments. Estimates of windblown dust emissions from

exposed reservoir sediments did not include estimates of chemical

contaminants that have accumulated in sediments and that could

become airborne when the sediments are exposed. The Corps’ draft EIS

reported that reservoir sediments contain heavy metals and DDT, but

dispersion modeling would be necessary to determine whether they

pose a threat to human health.19 For example, the effect of these

windblown particles on downwind communities, such as Clarkston,

Washington, or Lewiston, Idaho, is not known. Both EPA and BPA have

recommended that the Corps analyze the potential effect of these

airborne sediments.

19 According to the Corps’ 1995 Columbia River System Operation Review EIS, chemical

concentrations were found in Lower Snake River reservoir sediments that, if they became

airborne, could exceed state standards.
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• Replacement power production. Estimates of increased air emissions

from replacement power did not consider the effect on nearby

communities. This type of analysis is typically done by modeling the

dispersion of emissions around a power plant. EPA stated that this

modeling should have been done to assess compliance with state and

local air standards and plans. Corps officials told us that they did not do

additional analysis because they were unsure where, and if, additional

plants would be constructed. However, the draft EIS lists the most likely

number and location of plants to meet power demand and transmission

reliability needs, as well as the locations of power plants with submitted

or approved permit applications. The Corps could have used this

information to estimate the effect on local communities. EPA also

commented that the effect of replacement power emissions on global

warming was not adequately addressed. In addition, the draft EIS did

not examine the potential for alternative energy sources—such as wind

and solar—and conservation as a means to avoid increased emissions

from replacement power. Conservation groups have concluded that it is

possible to replace lost hydropower with conservation and alternative

energy, under certain scenarios, without higher power costs.20

The Corps Limited Its Air Quality

Analysis

Difficulties with the Corps’ air quality analysis can be attributed, in part, to

getting a late start on the analysis. Initially, the Corps did not include an air

quality assessment within the scope of the EIS. Corps officials stated that

they did not believe it was a significant issue for this EIS and planned to

incorporate an earlier air quality assessment from a 1995 system operating

review.21 This 1995 study identified the potential toxicity of river sediment

but did not report significant increases in air pollutants from replacement

power emissions if the dams are breached. However, in April 1998,

following discussions with BPA and others, the Corps, using input from

EPA as a cooperating agency, initiated a new air quality segment as part of

the Corps’ scope of work.

20 An April 2000 study by the Northwest Energy Coalition, Going With the Flow: Replacing

Energy From the Four Snake River Dams, concluded that power lost from breaching the

dams could be replaced through conservation and nonpolluting power generation, such as

solar and wind power. The study recognizes that this strategy would require government

intervention and higher nonpower costs. BPA is working to estimate the cost of such a

strategy, but this estimate will not be available until later this year.

21 The Corps’ 1995 System Operating Review EIS assessed the various impacts, including air

quality, from various changes in the way federal dams are operated in the Columbia River

Basin.
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The Corps did not complete significant portions of its original air quality

scope of work, which included an assessment of the direct and cumulative

effects on air quality of the four alternatives studied. The Corps’ original

scope of work also detailed plans to evaluate how each of the four

alternatives would affect state plans for limiting air pollutants. In 1998, the

Corps contracted for a work plan for the air quality assessment based on

the scope of work prepared by EPA. Corps officials advised us that, during

negotiations with the contractor on the proposed work plan, it became

apparent that the existing budget and study time frames would not allow

the original scope of work to be carried out. Several of the tasks included in

the scope of work could not be done for the cost or time allotted. In order

to meet budget and time constraints, the Corps reduced the work plan.

Modeling the effect of replacement power on air quality, including health

effects, was deleted, as was modeling of dust emissions from the exposed

riverbed. While the work plan did include modeling of the increase in

vehicle emissions from the loss of barge transportation, the contractor

never completed any vehicle emission modeling. The contractor stated that

the amount of money provided by the Corps was not sufficient to support

any type of modeling of the effects on air quality. The Corps is considering

EPA and others’ comments and has not determined whether additional

analysis is needed.

Agency Comments We provided the U.S. Army Corps of Engineers with a draft of this report

for review and comment. While the Corps did not indicate whether it

agreed or disagreed with the overall message of our report, it did comment

that the scope of our review was limited and that we should have assessed

the importance of our concerns in relation to the Corps’ decision process

and the “value-added” of having the Corps correct its analysis. However,

precisely because the scope of our review was limited, we could not

estimate the value of resolving problems with the Corps’ estimates. For this

reason, our report does not make any recommendations regarding whether

the Corps should address the concerns discussed in this report. Instead, the

Corps must determine whether improving the reasonableness of its

estimates in these and other areas warrants the additional time and

expense required. In addition to this general comment, the Corps provided

technical comments, which we incorporated as appropriate.

We are sending copies of this report to appropriate House and Senate

Committees and Subcommittees; the Honorable William S. Cohen,

Secretary of Defense; Lt. Gen. Joe N. Ballard, Chief of Engineers and
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Commander, U.S. Army Corps of Engineers; and other interested parties.

We will also make copies available to others upon request.

If you or your staff have any questions about this report, please call me at

(202) 512-3841. Key contributors to this report are listed in appendix III.

Jim Wells

Director, Energy, Resources,

and Science Issues
Page 30 GAO/RCED-00-186 Snake River Dam EIS

Appendix I

Description of the Corps’ Analysis for Apendxies

Electricity Costs, Transportation Costs, and

Air Quality ApendxiI

The U.S. Army Corps of Engineers used different methodologies and

analyses for each of the three impact areas—electricity, transportation, and

air quality—that we assessed. The following are short descriptions of these

different approaches and the participants who contributed to them.

Corps of Engineers’

Electricity Analysis

The Corps’ estimate of the net economic development costs from the loss

of hydropower produced by the four Lower Snake River dams includes

three components—replacement power, improvements to transmission

systems, and ancillary services.

• Estimation of replacement power costs. The Corps, Bonneville

Power Administration (BPA), and the Northwest Power Planning

Council (Council) each used its own procedures to estimate the cost of

meeting electric power demand with and without the four dams. BPA

and the Corps each used its own hydrology and hydropower models,

which simulate on a month-by-month basis the entire Columbia River

Basin with respect to river flows, dam operations, and hydroelectric

production. The models use mathematical programming techniques that

take into account not only the hydrologic conditions of the basin, but

also the various goals of flood control, navigation, hydropower

production, fish protection, and recreation. The two models are

conceptually very similar. Next, the Corps and BPA used power supply

models to translate the difference in hydropower production with and

without the four dams into power system costs. The resulting cost and

market valuation estimates were similar: The Corp’s estimate was $252

million per year, while BPA’s medium-case scenario was $255 million per

year. The Council’s analysis was based on the Corps’ and BPA’s

estimates of how much hydropower would be lost by breaching the four

dams. However, instead of calculating the cost of replacing the power,

Council’s analysis placed an economic value on the estimated

hydropower losses, using forecast wholesale market prices for power.

Using this analysis, the Council estimated the value of the lost

hydropower from the four dams at about $225 million annually.1

• Estimation of transmission system costs. To determine the potential

effects of breaching on the reliability of the electric power transmission

1 The forecast market prices were obtained from a 1998 analysis done by the Power

Planning Council using an electric power pricing model called Aurora. This analysis was a

major modeling effort that received the approval of various groups with diverse views on

hydropower in the Pacific Northwest.
Appendix I

Description of the Corps’ Analysis for

Electricity Costs, Transportation Costs, and

Air Quality

Page 31 GAO/RCED-00-186 Snake River Dam EIS

system in the Pacific Northwest, BPA used electric transmission models

and extensive information about generation, transmission, and load

(demand) throughout western North America. Using 1998-99 conditions

as a baseline, BPA’s analysts developed modeling simulations that

identified the locations and types of adverse transmission impacts

stemming from the loss of the four dams. Using a discount rate of 6.875

percent, BPA estimated the annual costs on the transmission system to

be between $22 million and $28 million. These costs included various

mitigation measures that might be taken to deal with the transmission

problems, such as upgrading the intertie between transmission systems

in the Northwest and Southwest, building a new transmission line, and

constructing new generating capacity.

• Estimation of ancillary services costs. To determine the impact of

breaching on ancillary services, BPA used actual transaction prices and

made certain assumptions regarding the frequency and level of utilizing

the Lower Snake River dams for the provision of such services.

Deregulation in the power industry has made it possible to create a

separate market for ancillary services that previously were part of the

“bundled” service that power suppliers provided at no charge.2 Starting

in 1998, BPA began to unbundle ancillary services and sell them

separately. Breaching would affect two types of ancillary services. First,

it would decrease reserves required for the federal power system, which

would cost $7,183,000 annually to replace.3 Second, breaching would

diminish automatic generation control, which allows for small but very

frequent changes in electric power generation to balance supply and

demand. BPA estimated lost generation control services at an average

annual value of $465,000. The total of decreased reserves and automatic

generation control is $7,648,000 annually.

Corps of Engineers’

Transportation Cost

Analysis

To estimate the net economic development costs from breaching the four

Snake River dams and the attendant loss of barge shipping, the Corps used

a three-stage analytical approach. First, the Corps forecast future

shipments. Second, using these forecasts, the Corps modeled the

movement of these shipments, first assuming river transportation is

2 “Bundled” service refers to the grouping of separate services into one product “bundle”

that a supplier provides uniformly to a class of customers.

3 To ensure reliable service to customers, electric power suppliers maintain emergency

power production capacity. Reserve capacity is needed to replace unexpected power

generation losses or to meet unexpectedly high demand.
Appendix I

Description of the Corps’ Analysis for

Electricity Costs, Transportation Costs, and

Air Quality

Page 32 GAO/RCED-00-186 Snake River Dam EIS

available, and second under a least-cost alternative assuming river

transportation is not available. Finally, the Corps estimated shipping costs

under both scenarios and computed the difference.

• Forecasting growth in shipments. The Corps relied on its Institute

for Water Resources to assist in developing commodity growth

estimates. This Institute was used for earlier Columbia River studies and

has forecast shipping on other waterways. These forecasts were based

on forecasts originally developed for another study, The Columbia River

Channel Deepening Feasibility Study. To forecast commodity growth,

the Institute separated the shipments into five distinct groupings—grain,

wood products, petroleum, paper and pulp, and other commodities. For

grains, the Institute estimated that about 23 percent of the Lower

Columbia River area export grains are shipped on the Snake River and

assumed that this proportion would stay constant in the future. Using

the average of Columbia River grain shipments for 1987 through 1996,

the Institute projected Snake River grain shipments through 2017 and

assumed level shipments thereafter. For the nongrain commodities, the

Corps used information from the earlier study to reflect projected

changes in the quantities of commodities shipped. For example, wood

chips and logs are assumed to remain constant while petroleum

products are tied to projected population increases. Overall, the Corps

estimated a total increase in shipments of 26 percent, to 5 million tons

by 2017.

• Modeling transportation patterns. One of the key elements in

determining transportation costs is identifying origins and destinations

of product movements. For grain (primarily wheat and barley), the

Corps used an established model to determine the current path by

which grain is trucked to the river and barged to the export port in the

Portland, Oregon, area. The Corps then modeled the least-cost

alternative routing. For some grain, the alternative involved a longer

drive to ports on the Columbia River for barge transport to Portland. For

other grain, the alternative involved transfer to railroad hopper cars and

shipment by rail to the export port. For nongrain commodities, the

Corps used the same approach, but only modeled the path from the

origin to the destination port under current conditions and under the

least-cost alternative.

• Estimating cost effects. Using the modeled shipping pattern

information, the Corps estimated the cost of shipping under current

conditions and if the dams are breached. For each shipment, the Corps

estimated the shipping cost on the basis of the estimated cost to the

carrier (barge, railroad, or truck). For example, for a shipment of grain
Appendix I

Description of the Corps’ Analysis for

Electricity Costs, Transportation Costs, and

Air Quality

Page 33 GAO/RCED-00-186 Snake River Dam EIS

via truck and barge, the Corps estimated the per-ton costs of the trucker

and barge operator to move that grain. In its approach, the Corps

assumed that the (1) unit costs for rail and truck operators would not

change if competition from barge operators ceases and (2) necessary

infrastructure investments in rail lines and highways will be made. The

Corps then compared the total costs of shipping under current

conditions and the least-cost alternative without river navigation. The

incremental cost of breaching, before considering avoided costs, totaled

$24 million annually.

Corps of Engineers’ Air

Quality Analysis

The Corps’ air quality assessment estimated emissions from four sources if

the Lower Snake River dams are breached.

• Airborne emissions from deconstruction. The estimated 2-year

deconstruction of the four Lower Snake River dams would produce

airborne dust. The primary source would be material-handling activities,

such as bulldozing, hauling, dumping, and grading. The deconstruction

dust emission estimates were based on construction-related dust

emission factors from EPA. These factors were then used to estimate

particulate emissions from each dam on the basis of the volume of

material to be moved, road lengths, hours of operation, and average

weight of the haul trucks. The effects of dust emissions were not

quantified.

• Air emissions from the loss of barge transportation. If the four

Lower Snake River dams are breached, grain and goods that are

currently transported by barge would have to be trucked to rail cars or

to river ports downstream. The Corps estimated emissions by averaging

the results of two different approaches that converted transportation

data for grain into vehicle emissions using EPA emission factors and

extrapolated that data for other commodities.

• Windblown dust emissions from exposed reservoir sediments.

Eastern Washington is relatively arid and subject to considerable

windblown dust. The study concluded that until vegetation cover

becomes established, the dust emissions from the dry reservoirs would

be between 0.4 and 13 percent of the total emissions from eastern

Washington agricultural areas during individual windstorms. Emissions

were estimated using an EPA methodology for predicting the amount of

particulate matter because of wind erosion. The analysis used 1984

through 1991 wind data for selected cities in the region.

• Increased air emissions from replacement power generation.

Breaching the four Lower Snake River dams would require 1,550
Appendix I

Description of the Corps’ Analysis for

Electricity Costs, Transportation Costs, and

Air Quality

Page 34 GAO/RCED-00-186 Snake River Dam EIS

megawatts of replacement power generation. The Corps assumed that

the replacement power would come primarily from new thermal power

plants, most likely gas-fired. These plants would produce such

pollutants as carbon dioxide, nitrogen dioxide, and sulfur dioxide.

Amounts for these substances were estimated on the basis of the BPA

model used to estimate electricity costs and then extrapolated to other

pollutants, such as carbon monoxide, using EPA emission factors.
Page 35 GAO/RCED-00-186 Snake River Dam EIS

Appendix II

Scope and Methodology ApendxiI

To assess the extent to which the Corps followed requirements and

accepted practices in preparing the draft environmental impact statement

(EIS), we reviewed the draft EIS in comparison to individual requirements

of the National Environmental Policy Act, the Endangered Species Act, the

Water Resources Council’s Economic and Environmental Principles for

Water and Related Land Resources Implementation Studies (1983), and

Corps and Department of Army implementing guidance for the preparation

of an EIS. To the extent we found variances, we discussed these with Corps

officials, other agencies, and outside experts. We also reviewed the scope

and content of the Corps’ draft EIS, including the Corps’ assessment of

compliance with applicable federal environmental statutes and regulations.

We also spoke with interested stakeholders, both pro-dam and

conservation groups; other agencies; and outside experts. Finally, we

attended public hearings, reviewed hearing transcripts, and reviewed

public and agency comments submitted to the Corps.

To determine the reasonableness of the Corps’ analysis and presentation of

the effect of breaching on electricity costs, we reviewed and assessed the

Corps’ draft EIS and technical background reports and spoke with outside

experts and interested stakeholders. In addition to current and earlier

drafts of the EIS and relevant appendixes, we reviewed and analyzed

numerous technical reports and studies that underlay the Corps’ analysis.

We examined the depth and quality of the reports’ analyses and the

consistency of the reported results across the studies. These reports

include the Hydro Impact Team’s Technical Report on Hydropower Costs

and Benefits, the Northwest Power Planning Council’s Analysis of the

Bonneville Power Administration’s Potential Future Costs and Revenues,

and BPA’s Transmission Impacts of Breaching the Lower Snake and John

Day Dams. We conducted interviews with the principal analysts

responsible for the cost estimation from three public agencies, the Corps,

BPA and the Council. We also interviewed stakeholders representing

diverse views on the Lower Snake River dams, and various independent

reviewers and hydropower experts. We also reviewed the detailed

comments of the Independent Economic Analysis Board regarding the EIS

and discussed them with several members of the Board. Through these

efforts, we developed an understanding of the various modeling exercises

that the Corps, BPA, and the Council used for estimating increases in

power system costs in the western United States because of the breaching

of the four Lower Snake River dams or changes in their current operations.

Finally, we assessed the extent to which the data and estimation models

employed had been reviewed by internal or external reviewers or used for

other operational or planning purposes.
Appendix II

Scope and Methodology

Page 36 GAO/RCED-00-186 Snake River Dam EIS

To determine the reasonableness of the Corps’ analysis and presentation of

the effect of breaching on transportation costs, we reviewed and assessed

the Corps’ draft EIS and technical background reports and spoke with

outside experts and interested stakeholders. In addition to current and

earlier drafts of the EIS and relevant appendixes, we reviewed and

analyzed studies that underlay the Corps’ analysis, including studies by

Corps consultants. To understand the Corps’ analysis and conclusions, we

assessed underlying studies prepared for a Washington State Legislature

Transportation Committee, the Eastern Washington Intermodal

Transportation Study, a study by the Port of Portland, and documents

prepared by various stakeholders, such as American Rivers and the Pacific

Northwest Waterways Association. We also reviewed the Corps’

transportation model for its completeness and accuracy, especially as

compared to the Water Resources Council’s Principles. We interviewed

officials from the Corps in Portland, and Walla Walla, Washington, and in

Northern Virginia who had contributed to the analysis and the consultant

with primary responsibility for the transportation section of the draft EIS.

To understand the limitations of the Corps’ analysis, we looked at the

assumptions, inconsistencies, and uncertainties identified by the Corps and

others. We assessed the extent to which the data and estimation models

employed had been reviewed by internal or external reviewers or were

consistent with other transportation modeling efforts. Finally, we reviewed

the comments of various stakeholders submitted to the Corps and

discussed the implication of their comments with the appropriate Corps

officials.

To determine the reasonableness of the Corps’ analysis and presentation of

the effect of breaching on air quality, we reviewed and assessed the draft

EIS and its underlying documents. We compared the Corps’ early work

plans with the scope of work later negotiated with the Corps’ contractors

and with the draft EIS. We also reviewed existing air quality standards and

requirements and assessed the extent to which the Corps analyzed and

reported the impact of breaching on these standards and requirements. We

also met with, and obtained documentation from BPA, the Corps, EPA and

the Corps’ prime and subcontractors for the air quality work. Finally, we

reviewed and evaluated agency and public comments received by the

Corps.

We performed our work in accordance with generally accepted government

auditing standards from December 1999 through June 2000.
Page 37 GAO/RCED-00-186 Snake River Dam EIS

Appendix III

GAO Contacts and Staff Acknowledgments ApendxiI

GAO Contacts Derek Stewart, (202) 512-3841

Bill Swick, (503) 235-8500

Acknowledgments In addition to those named above, Chris Abraham, Paul Aussendorf,

Margaret Armen, Philip Farah, William Hanson, Mehrzad Nadji, Tim

Schindler, and Stan Stenersen made key contributions to this report.

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