an important local industry-have gone out of business, and the county's agricultural economy has been declining. In Aroostook County, agricultural conditions are uncertain, and the lumber industry is subject to wide fluctuation.

A national sampling conducted by the Department of Labor in 1959 shows that an annual income of approximately $6,000 is required to maintain a modest but adequate level of living for a typical family of four. In Washington County, 34 percent of the families have incomes of less than $3,000 annually, and in Aroostook County over 30 percent of the families have incomes of less than $3,000. In Washington County, nearly 17 percent of the family units receive some form of public assistance, and in Aroostook County nearly 12 percent of the family units receive public assistance. Using this yardstick, one-third of the people in the area live in poverty, as contrasted with a national projection of one-fifth.

By providing substantial on-site employment, the Passamaquoddy-Dickey project will do much to alleviate human misery. The area redevelopment values, however, go much further than employment opportunity. The Department of the Interior's experience in 60 years of water resource development has conclusively demonstrated that for each dollar of Federal investment an additional $2 of private business is stimulated. Furthermore, a rejuvenated economy normally follows completion of water resource projects.

More important, perhaps, for longer term is the new ray of hope which will be instilled in the people of the area-men, women, and children who have lived with a mounting sense of despair for years. The psychological exit from poverty provided by Quoddy-Dickey, as well as its material benefits, will again offer the selfreliant people of the area a new opportunity to advance themselves to the limits of their capabilities.

E. EFFECT ON FISHERIES

The International Joint Commission's report of April 1961 described in detail the effect of the two-pool tidal powerplant operated on the basis of producing continuous power and evaluated the damages to fishing under the project's operation. The general conclusion of the previous report was as follows:

"On the basis of the extensive studies of the Fisheries Board, the Commission finds that by providing for relocation and modification of existing fisheries facilities and by including appropriate remedial measures in the design of the tidal power structures, construction and operation of the tidal power project would have very little effect on the important sardine industry in the region and only a minor effect on other fisheries."

In answer to the question as to how the changes in the present proposal might affect the fisheries of the Passamaquoddy area, a working party of United States and Canadian fishery scientists was formed at a meeting in Ottawa, Canada, December 4 to 5, 1963, and asked to study the problem. This group, composed of Drs. J. L. Hart and L. Chenard of Canada, and Messrs. D. L. McKernan and L. W. Scattergood of the United States, report the following:

"Changes in the fisheries.-Although the Interior plan will produce minor differences in oceanographic conditions compared to the IJC proposed, and the overall influence may be slightly less favorable, it is concluded that previous predictions contained in the IJC report concerning the effect of the project on the fisheries of the area are generally valid."

This report was forwarded to the Canadian and United States Governments. The report to the Secretary of the Interior was dated April 21, 1964.

CHAPTER VII. COST ESTIMATES

This chapter summarizes the estimates of cost, as of January 1964, prepared by the Corps of Engineers for the Passamaquoddy tidal power project and the hydroelectric powerplants on the upper St. John River at Dickey, Maine, and Lincoln School. It also summarizes the estimates of cost for the transmission system prepared by the Bureau of Reclamation.

The layout and design of the tidal project is the same as proposed by the International Joint Commission with the exception of the powerplant. Four sizes of powerplants are considered; namely, 30, 50, 70, and 100 units of 10,000 kilowatts each. Thirty or 50 units would be located in powerhouse No. 1 and the additional units to make up the 70 or 100 units would be located in powerhouse No. 2.

The proposed dam at Dickey, along with the reregulating dam at Lincoln School, are new layouts and designs.

The transmission system estimate includes the lines and substation necessary to market the power generated from the project in the United States. Depending upon agreements with Canada for sharing of power, the transmission system could be modified to include other lines interconnecting the United States and Canadian systems. Estimate of cost, tidal power project

Dickey and Lincoln School projects-Operation, maintenance, and replacement

Passamaquoddy powerplant: Added cost for inclusion of reversible turbine

features

Investment (50 units, including interest during construction__.

Amortization, annual..

Operation, maintenance, and replacements_

Annual costs---

$12, 880, 000

407, 650

62, 350

470, 000

CHAPTER VIII. ECONOMIC AND FINANCIAL ANALYSIS

The economic justification and financial feasibility of the potential project have been analyzed using current evaluation procedures. A 100-year period of analysis and a 3-percent Federal interest rate were used in the economic studies. In accordance with the provisions of Senate Document No. 97, recreation and area redevelopment were included as project purposes.

A. PROJECT FORMULATION

The optimum development for the Passamaquoddy-Dickey project under current evaluation criteria was determined to consist of the following project segments:

(1) Dickey Dam, Reservoir, and powerplant with eight generating units having a total installed capacity of 760 megawatts;

(2) Lincoln School regulating reservoir and powerplant with two generating units of 17 megawatts each;

(3) Passamaquoddy tidal basin facilities and powerplant with fifty 10-megawatt generating units; and

(4) Transmission facilities required to distribute project-produced power and energy to load centers in Maine and Massachusetts.

The proposed Dickey development represents maximum utilization of the Saint John River in Maine consistent with preservation of the wild river characteristics of the Allagash. The proposed development of Passamaquoddy represents only an initial step toward development of the full power potential. Construction of Passamaquoddy as proposed in this report envisions the construction of the second powerplant when future conditions warrant such development. Well-established project formulation procedures were followed in determining the optimum economic development of the project. The objective of these procedures is to insure that the benefits for each added segment of the project bear a favorable relationship to the cost for including the segment. Futhermore, the project is formulated at a level of development that will result in maximization of project benefits over costs.

Comparison of project benefits and costs for various size power installations at Dickey indicates that the installation of eight generating units is amply justified. Additional units were not considered because physical limitations preclude the installation of more than eight units.

Lincoln School Regulating Reservoir and Powerplant were included in all plans analyzed for Dickey because these facilities are essential operational features needed to avoid impairment of power generation at downstream plants in Canada. Comparison of benefits and costs for 2-unit, 4-unit, 6-unit, and 8-unit power installations at Dickey is shown in table 8-1. On the basis of this analysis, the 8-unit power development at Dickey plus the Lincoln School Regulating Reservoir and Powerplant were adopted as the initiating point in the development of the plan formulation studies.

TABLE 8-1.-Project formulation, Dickey analyzed without Passamaquoddy

Passamaquoddy was then analyzed as an increment to the Dickey unit development. The result of this analysis is shown in table 8-2. It will be noted that Passamaquoddy with a power instalation of 500 megawatts constitutes a justifiable increment to the project. Power installations of 700 megawatts and 1,000 megawatts were also considered but it was concluded that these should be reappraised at some future time when the power demand grows and further experience is gained by the utility systems in meeting peaking power requirements. Since the initial 500-megawatts powerplant does not preclude later additions in the second powerplant, considerations of the full development can readily be deferred.

Internal pumped storage features were included in the proposed plan of development for Passamaquoddy because the analysis of incremental benefits and costs associated with these features revealed that for a relatively small expenditure, project benefits would be enhanced greatly.

Information was obtained on the cost of developing equivalent supplies of energy and capacity by alternate means. The estimated cost of producing power by the proposed Dickey-Passamaquoddy project is significantly lower than modern conventional steamplants under private financing. Nevertheless, it would be possible to produce the equivalent power at less cost in federally financed conventional steamplants. However, the two types of developments would not be at all comparable in terms of the effects on water resource development, flood control, recreation, and area redevelopment.

Passamaquoddy, in particular, constitutes a unique resource potential. Construction of steamplants would still leave this unique resource undeveloped and the highly significant impact of recreation and area redevelopment on the economy of the State of Maine would be foregone. Therefore, it can be concluded the interests of the United States would not be served nearly as well by the construction of federally financed steamplants in New England.

The basic objective in the formulation of plans is to provide the best use, or combination of uses, of water and related land resources to meet all foreseeable short- and long-term needs. National and economic development and the development of each region within the country are essential to the maintenance of national strength and the achievement of a satisfactory level of living. Water and related land resource development and management are essential to these aims. The well-being of all people shall be the overriding determinant in con