We conduct a benefit-cost analysis of a relicensing agreement for two hydroelectric dams in Michigan. The agreement changed daily conditions from peaking to run-of-river flows. We consider three categories of costs and benefits: producer costs of adapting electricity production to the new time profile of hydroelectric output; benefits
of reductions in air pollution and greenhouse gas emissions; and benefits of improved recreational fishing. The best estimates suggest that the aggregate benefits are more than twice as large as the producer costs. The conceptual and empirical methods provide a template for investigating the effects of an environmental constraint on hydroelectric dams. (JEL Q43, Q57)

We conduct a benefit-cost analysis of a relicensing agreement for two hydroelectric dams in Michigan. The agreement changed daily conditions from peaking to run-of-river flows. We consider three categories of costs and benefits: producer costs of adapting electricity production to the new time profile of hydroelectric output; benefits of reductions in air pollution and greenhouse gas emissions; and benefits of improved recreational fishing. The best estimates suggest that the aggregate benefits are more than twice as large as the producer costs. The conceptual and empirical methods provide a template for investigating the effects of an environmental constraint on hydroelectric dams.

This report presents the results of an economic study of the Clyde River performed by the University of Vermont (UVM) and the National Wildlife Federation (NWF). The purpose of this study was to determine the economic value that households across Vermont attribute to removal of the Newport No. 11 Diversion Dam an its generator and restoration of landlocked Atlantic salmon and other fish to the Clyde River. A first study, published on May 17, 1996, looked at the economic value of removal for households in Orleans County only. The Orleans County report was released before the completion of this statewide report in order to provide the Vermont natural Resource Council (VNRC) some analysis on the value of removing the Newport No. 11 Diversion Dam and the powerstation as soon as the information became available. This is the final and complete report containing both the Orleans County and statewide analyses.