Montana's Libby Dam Project:

More Study Needed Before Adding Generators and a Reregulating Dam

EMD-80-25: Published: Nov 20, 1979. Publicly Released: Nov 28, 1979.

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The Army Corps of Engineers has proposed modifications to the Libby Dam in Montana to increase its generating capacity. The increased capacity would not produce more electricity than the existing facility, but would help meet high-demand daytime needs. The project has been the subject of controversy for several years. The Corps has contended that it is necessary to meet the peak power needs of the area. However, others have questioned whether the project would be economically and environmentally sound.

In making the benefit-cost analysis of the proposed Libby Dam project, the Corps used methods which no longer apply in the Pacific Northwest. Use of this methodology resulted in an overestimation of the benefits of the project. The Corps planned to undertake a new analysis using more precise data and production cost model concepts. State officials and others felt that river fluctuation limits should be reduced for safety reasons and to lessen the effects on the fish population. Such a reduction would impair the operating flexibility of the main dam and decrease the power benefits at the reregulating dam. No studies or other evidence have shown the need to reduce the fluctuation limits, and the fishery below the dam was apparently flourishing. The Corps did not fully analyze five alternatives to the proposed project. These alternatives included: (1) combustion turbines similar to aircraft engines for driving electric generators; (2) cogeneration using heat from industrial operations to power the generators; (3) power exchanges using the intertie that stretches from California to Washington; (4) load management which smooths out the peaks in electricity use by means of remote control switches, thermostats and circuit breakers in homes and businesses; and (5) peak pricing options involving increased power prices during periods of heaviest demand.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Army should direct the Chief of Engineers to recompute and report to Congress the costs and benefits for the project, using the production cost model approach, taking care to select the authorized discount rate, valid power values, and all applicable costs.

    Agency Affected: Department of Defense: Department of the Army

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy, as part of the proposed study, should direct the Administrator of the Bonneville Power Administration (BPA) to conduct a comprehensive analysis of peaking alternatives in the region, including the proposed project. This study should measure the incremental effect of each alternative on the combined hydro-thermal system, and it should be the basis for prioritizing alternatives for implementation. In the longer term, BPA should routinely prepare and update the analysis of peaking alternatives. If options such as conservation, load management, and peak pricing prove to be economically feasible, BPA should develop and implement equitable methods to encourage utilities and electricity customers to adopt them.

    Agency Affected: Department of Energy


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