An economic approach to giving "equal consideration" to environmental values in FERC hydropower relicensing
The economic value of water that flows over a scenic waterfall was measured using the contingent valuation method. Allowing both the value per day and trips to vary with flow resulted in values per cubic feet per second (cfs) of flow ranging from $1000 for the first 100 cfs to $300 for additional flow at 550cfs. Accounting for the value of foregone hydropower, the economically optimum flow just considering aesthetics of the falls was about 235-240 cfs during the main recreation season. Monthly analysis during the recreation season suggested that optimum flows varied from 165-175 cfs during the early and later recreation season to 500-600 cfs during the four prime recreation months. These flows were three to ten times greater than current minimum flows. Recommendations are made that the Federal Energy Regulatory Commission should use non-market valuation techniques such as contingent valuation surveys to ensure that environmental values are given equal consideration with power values in dam licensing and relicensing decisions.