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Dam Removal Costs Analyzed by Staff BPA Journal, April 2007

BPA estimates Northwest electricity ratepayers could pay between $400 million to $550 million a year to replace the power capabilities of the four lower Snake River dams if those dams were removed.

BPA's analysis of the value of the power capabilities of the lower Snake River dams stands in contrast to a report released in November by environmental and sport fishing groups. The earlier "Revenue Stream" report concluded that ratepayers and taxpayers would be economically better off without the lower Snake River dams over a 10-year period.

When power numbers that reflect the actual costs are used in the calculation, however, net benefits claimed in the report become a net cost of $1.5 billion to $3.8 billion over 10 years.

"Revenue Stream" understated the replacement energy costs and did not address costs associated with replacing the capacity capabilities of the dams. The four lower Snake River dams have the ability to generate up to three times their typical output for short periods when consumer demands for electricity are very high.

The lower Snake River dams also provide operating flexibility that is necessary to meet the constant fluctuations that occur in electricity use. In addition, the dams are helpful to fill in behind intermittent sources of power such as wind and provide the region with electricity reserves that help maintain overall system reliability.

An analysis of the power costs of removing the dams is at www.bpa.gov/Corporate/BPANews/Perspective/2007/Snake_River_Dams/.