Valuing recreational water releases on the North Fork of the Feather River: a travel cost study

The purpose of hydroelectric plants located on rivers is to utilize the instream water to generate electricity. Frequently, however, the water used in hydroelectricity production is diverted from other instream uses, like recreation. The competing uses of the water resources forms a tradeoff when one resource use is selected over another. In turn, the tradeoff generates an opportunity cost. Both tradeoff and opportunity cost values can be assessed using any number of cost-benefit analysis methods. In this cost-benefit study of water use on the North Fork of the Feather River located in Northern California, the economic value of the recreational water releases from Rock Creek and Cresta Dams was assessed using the zonal travel cost method, in which the value of the river’s recreational services was estimated based on visitors’ travel costs. The zonal travel cost method was chosen for this study due to time and financial constraints, although it is one of many methods used to perform a cost-benefit analysis study. The value of the recreational site was then compared to the opportunity cost to forego hydroelectricity generation, in order to determine whether the benefits of the releases equaled or outweighed the lost hydroelectricity generation. The results of this study appear to be consistent with previous studies, particularly the cost-benefit analysis study conducted by Resource Decisions for Pacific Gas and Electric (PG&E) during the dams’ relicensing process in 1999. It must be noted that while this study and the study performed by Resource Decisions reached similar conclusions, two different valuation methods were used. Resource Decisions performed a benefit transfer study prior to the implementation of the recreational water releases, which the value data was obtained from other rivers and transferred over to represent the value of whitewater boating recreation on the North Fork of the Feather River. In this study, actual observations were obtained from NFFR boating recreationists during the recreational water releases in 2002, 2003, and 2004 to perform a travel cost study. The results from both of the analyses suggest that the benefits of the recreational releases did not outweigh the value of the lost hydroelectricity generation. It was not possible, however, to capture the full value of recreational alternative use on the North Fork of the Feather, therefore, biasing in favor of hydroelectricity generation.