Highlights: introduction | issue identification | dam and river ecosystem basics | legal aspects | economic considerations | decision-making process | conclusions

Economic considerations

The various economic impacts of repairing or removing a dam are important to consider during your decision-making process. In this summary, the possible cost and benefit considerations are presented and explained for the repair and removal options. For strategies about how to estimate and compare these economic considerations, please consult the Economic Considerations module of the complete guide. Many items discussed here apply to all situations and should be investigated further. Some items discussed here are not relevant in every case and need not be considered; certain categories of economic considerations have not been included at all because they are so uncommon.

Some short-term economic considerations are easy to understand; some longer-term considerations are more challenging to assess. Consider, for example, the cost of hiring a construction company to do the repair or demolition work compared with the estimated cost of impacts on local property values. Other considerations that are complicated to estimate are those that have no definite dollar value, such as the importance to a community of preserving the lake created by the dam.

Repairing or removing a dam will take time and money, and either decision will have long-term financial and community impacts. Good planning can minimize the unpleasant prospects of unexpected costs and disappointing project results.
 

Construction costs

Construction costs are relevant to the repair and removal options. In the case of repair, a number of different design and construction options will need to be tailored to your specific needs and requirements. For instance, perhaps you plan on dredging the lake as part of your repair project, or perhaps your construction specifications call for fish passages. Regardless, the construction costs of repairing a dam will hinge on size and the state of disrepair of your dam.

Dam removal may also include the removal of complementary structures, such as concrete wings that reach upstream, spillways, powerhouses, and raceways. In some cases, contaminated sediments may be discovered in the newly exposed lake bottom and need to be remediated before the dam is removed. Finally, there can be costs associated with restoration of the newly exposed impoundment. Estimating the costs of construction under the repair or removal options will necessarily include hiring a consultant and/or engineer.
 

Operation and maintenance costs

If a dam is to be repaired, the owner must consider the cost of maintaining the dam. This cost will include operating costs, inspections of the dam structure (along with Wisconsin Department of Natural Resources inspections), and any necessary repairs. General upkeep costs may include dredging if the impoundment fills with sediment over time. Removing a dam eliminates nearly all operation and maintenance costs; however, if the newly exposed land from a dam removal is developed into a park or other public land, operation and maintenance costs should be considered.
 

Safety and other liability risks

Dam owners generally carry large liability insurance policies to cover the possibilities of recreation accidents or a dam’s structural failure and the flood that would result. By removing a dam, this insurance cost is eliminated. Floodplain zoning depends on the presence of a dam and the decision to repair or remove a dam has implications for this zoning. Flood insurance premiums on downstream properties are affected by this zoning and should be considered with either the repair or removal of the dam.
 

Property value

Repairing the dam will likely have no effect on the value of properties near the dam and impoundment because the status quo will be maintained. However, a repaired dam will require maintenance, which the community will have to pay for. If the dam is removed, the change from lakefront to riverfront aesthetics may affect the value of properties near the current impoundment. In many communities the removal of a dam has had little impact on property values.
 

Recreational value

Rivers and impoundments provide a variety of recreational opportunities. Many impoundments are used for fishing and boating activities. Removing a dam presents opportunities to utilize newly uncovered land for parks and the restored river for water activities such as canoeing. It is important to weigh the recreation made available by the impoundment with the recreation that would be afforded by a free-flowing river and adjacent land for your community members. Tourism and businesses that depend on recreation associated with an impoundment or that could take advantage of the restored river system should be considered. These businesses may be affected by the decision to either repair or remove the dam.
 

Aesthetic value

Rivers and impoundments afford appealing, but different, aesthetic qualities. Members of your community may place a high value on the scenery of your impoundment; others may have a preference for a free-flowing river. Strategies to estimate your community’s value of aesthetics can be found in the Economic Considerations module of the guide.
 

Ecological value

Free-flowing rivers and impoundments have ecological values associated with the plants and animals found in and around them. These values are separate from recreational values provided by wildlife, such as hunting and fishing. Both systems support plant and fish populations and may have wetlands associated with them.

Next section: The decision-making process

URL: http://www.ies.wisc.edu/research/wrm00/highecon.htm