Economic efficiency criteria for evaluating adversary hydro relicensing applications

The criteria established by the Federal Energy Regulatory Commission (FERC), particularly the criterion of economic efficiency, in the Merwin hydroelectric relicensing case are the framework for this analysis of the primary empirical considerations involved in awarding licenses. The results suggest that marginal generation costs and average generation costs (prices) of competing applicants, the size of each system, and the relationship between the output of the facility and the effective size of each system are characteristics of electric power systems that the FERC can use to assign a license according to its highest value use. These results also suggest that a muni preference for relicensing or for initial licensing is undesirable and inefficient. Computer printouts from the analysis appear in the appendix. 1 figure, 1 table.