Costs and Benefits of the Glen Canyon Dam: A new study examines the impacts of halting electrical generation

A new study conducted by the economic research group Power Consulting suggests that the overall costs of operating the Glen Canyon Dam on the Colorado River in Northern Arizona may outweigh the benefits of increased electricity production.

The Glen Canyon Dam, completed in 1963 as part of the Colorado River Storage Project, was built to store and deliver water to the arid regions of the Lower Colorado River Basin, as well as providing electricity to surrounding regions and other selected contractors.  The dam also created Lake Powell, the second largest fresh water reservoir in the United States, which serves as a major tourist destination driving economic growth in the region.

Despite the benefits of the Glen Canyon Dam, a number of ecological and economic issues have risen along with the dams towering concrete walls.  In addition to maintenance and other fixed costs associated with the dam, damage to downstream ecosystems and fish habitats has occured.  Millions of pounds of silt that flowed downstream before the dam’s construction is now captured in Lake Powell, which has led to the erosion of riparian zones along the banks of the Colorado River and a drop in water temperature that has negatively affected downstream fisheries.

Conservationists have proposed a variety of solutions to fix these problems, which range from diverting water through the Colorado River to Lake Mead downstream to the complete decommissioning and removal of the dam.  Colorado River system managers disagree with these measurers and argue that they would be in violation of the Colorado River Compact, as well as lowering or eliminating electrical generation coming from the dam, which would increase utility prices.

The study by Power Consulting, which was peer reviewed by a panel of independent economists, examined the economic impacts on ratepayers in the region if power generation at Glen Canyon Dam was to entirely cease.  The study concluded that the loss of electricity generated by the dam would raise utility costs a total of $16.31 million. However, since the costs would be spread across 3.2 million customers, the individual impacts in most cases would be small, averaging an increase of $0.08 per month for residential customers and $0.59 per month for commercial users. 

The study also concluded that a discontinuation of dam operations could also have offsetting benefits, including a reduction in operating and maintenance costs, increased power generation at Hoover Dam, and a reduction in lost water soaking into the banks or evaporating from the surface of Lake Powell, as well as a reduction in other environmental externalities that result from the dams continued operation. 

According to the study’s lead researcher, Tom Power, the diversification and expansion of energy sources in the region since the dams inception, alongside increased generation capabilities by other facilities, could offset any reductions in power generation associated with decommissioning the dam and limit impacts on consumers.