Dam Rehabilitation Economics

1. Dam Rehabilitation Economics

2. Define the Project’s Purpose and Need Sponsors are likely to present a full range of needs --Eliminate liability --Downrate the project --Make needed repairs and upgrade as required by law --Complete watershed re-evaluation

3. Alternatives Based on Purpose and Need • NEPA requires a No-Action alternative

4. No-Action Alternative Can Take Different Shapes • Abandonment--Threat to human life and property? • Repair what must be repaired • Repair and legally-required upgrades • Legally-required upgrades • Decommission

5. Action Alternatives • Responsive to sponsor’s purpose and need • Comply with NRCS direction • Comply with NEPA

6. Consider Efficiency in Developing Alternatives • “Reasonable alternatives not within the jurisdiction of USDA should be included.” NWSM 504.38 (c) • “Include reasonable alternatives not within the jurisdiction of the lead agency.” 40 CFR 1502.14 (c)

7. Abandonment a Helpful No-Action Alternative? • Describe the deleterious effects of No-Action • Better inform the public, politicians and decisionmakers as to the hazards associated with taking No-Action

8. Selecting the No-Action Alternative? • Why go to all the expense and effort to select the No-Action? Why not just abandon the process? • Analysis documents the hazards for those in the breach inundation zone • Analysis documents how much it would cost to solve the problem--helpful for those seeking a legislative remedy

9. Two Examples with/without Average Annual $$ of dam failure • The current draft rules require NRCS to provide a probability of Dam Failure, but that may not be always possible. • If there is a probability of dam failure, you may be able to calculate average annual damages. If you don’t have that probability, you can’t.

10. Example Watershed Benefits with Estimate Dam Failure

11. Example Watershed Summary with Estimate Dam Failure

12. Example Watershed Summary with Estimate Dam Failure • The Rehab alternative is the NED plan, and probably the selected plan. • Proceed with the analysis as with any other PL-566 plan.

13. Example Watershed Benefits without Estimates of Dam Failure

14. Example Watershed Summary without Estimate Dam Failure

15. NED(?) Analysis of four alternatives without Dam Failure Costs • The No-Action alternative is considered not feasible on social, engineering and legal grounds • Analysis documents the hazards for those in the breach inundation zone • Analysis documents how much it would cost to solve the problem--helpful for those seeking a legislative remedy

16. Example Watershed Summary without Estimate Dam Failure • We have no NED plan according to NREH. • The No-Action is not a feasible alternative from social, legal, and engineering grounds. • The ‘Rehab’ alternative is the ‘most’ economically feasible alternative. • Does the ‘Rehab’ alternative need an exception from the Chief?

17. Economists Role • The Economist’s Role is to evaluate all costs and benefits that can be converted to economic effects. • There are economic effects, like a breach routing, where we can estimate the damages if the dam breaches, but we may not be able to estimate the probability of that occurrence. • In that case, we should list the effects of a dam breach in the Social Effects, but not include the dam breach in the average annual calculations.

18. Define the Purpose and Need Develop a good No-Action Alternative Develop Alternatives Responsive to the Purpose and Need Consider Economics in Developing Alternatives Summary